16/02/2025

MODULE
Logistics and International Freight Forwarding

Lecturer: Assoc.Prof. Dr. Nguyen Thi Binh

Department of Logistics and Supply Chain Management
Foreign Trade University
Tel: 036 977 03307
Email: [email protected]

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LEARNING OBJECTIVES
After studying this part, the stuents will be able to:
* Knowledge

1) Understand fundamental concepts of logistics and role of transport

in logistics
2) Understand the use of transportation documents (Ocean Bill of
Lading, Air Way Bill, Multimodal Transport Documents…)
3) Understand different modes of transportation
4) Know how to negotiate and sign a transport contract and deal with
any disputes/conflicts arisen from the contract
5) Understand the legal systems in international transportation and
carrier’s liability

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* Skills

6) Skills of reasoning, finding and solving issues in the logistics business

7) Thinking and problem-solving skills in the logistics and international
freight sector
8) Skills to research and explore knowledge in the logistics and
international freight sector
* Attitute

9) The moral qualities of the individual (the training of consciousness is

ready to cope with difficulties and risks, persevering, flexible, confident,
hardworking, enthusiastic, integrity, criticism, creativity ...)
10) Moral qualities and attitudes to society (socially responsible and law-
abiding, supportive and protective of the right, creative and innovative)

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Reading Materials
(1) Textbook
▪ Hoang Van Chau (2009), Logistics và vận tải quốc tế, Transport Publishing
House
(2) Compulsory Readings
▪ Donald F. Wood, Anthony P. Barone, Paul R. Murphy, Daniel L. Wardlow,
International Logistics,New York: Amacom, 2002
▪ Radnoti, Dr. George, Profit Strategies for Air Transportation, McGraw - Hill
▪ [Michael G. H. Bell, Yasunori Lida, Transportations Network analysis,
Chichester, Wiley, 1997
▪ Paul R. Murphy, Donald F. Wood, Contemporary logistics, New Jersey:
Pearson, 2008
▪ Vietnam Maritime Code 2015
▪ Vietnam Civil aviation Law 2006

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COURSE STRUCTURE

TIME ALLOCATION
NO CONTENTS
(Hours on the class)
1 Chapter 1: Introduction to logistics and 6
SCM
2 Chapter 2: Shipping 9
3 Chapter 3: Airfreight forwarding 4
4 Chapter 4: Container transportation 2
5 Chapter 5: Multimodal transportation 3
6 Mid-term exam +Revision 6
Total 30

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Course Assessment
▪ Attendance and participation in class: 10%
▪ Group presentation/Mid-term exam: 30%
▪ Final exam (oral test): 60%

Assessment Criteria
▪ Generic Criteria: Good attitude, thirst for knowledge, and well behaviour
▪ Group presentation:
▪ Determine the problem clear, reasonable
▪ Logical analysis
▪ Use a rich reference material
▪ Language is clear, quoted correctly and easy-to-understand
▪ Creative in the presentation

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CHAPTER 1: INTRODUCTION OF LOGISTICS AND

SUPPLY CHAIN MANAGEMENT

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1. LOGISTICS

1.1 HISTORY
▪ The term “logistics” was the first in use not in commercial activities but within
the facet of military science:

▪ Logistics is defined as ‘the procurement, maintenance and

transportation of military materials, facilities and personnel”.

▪ In Vietnam's history, the first two people who

successfully applied Logistics in military operations
were:

▪ The King Quang Trung - Nguyen Hue in his

speedy march to the North to destroy the Qing
army (1789)
▪ General Vo Nguyen Giap in Dien Bien Phu
campaign (1954)

▪ Campaign for liberation of the South to unify

the country (1975)

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1.2. CONCEPT

Logistics is the . . .
“process of planning, implementing, and controlling the efficient,
effective flow and storage of goods, services, and related information
from point of origin to point of consumption for the purpose of
conforming to customer requirements”
Council of Logistics Management

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In Vietnam, the Commercial Law in 2005, logistics

…as commercial activities whereby traders organize the performance of
one of many jobs including forwarding, transport, warehousing, yard
storage of cargoes, completion of custom procedure and other formalities
and paper work, provision of consultancy to customer, service of
packaging, marketing, delivery of goods, and other services related to
goods according to agreement with customers.

→ For this aspect, logistics is obviously defined within a number of specific

activities

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1.3. KEY COMPONENTS OF LOGISTICS

▪ Core activities
➢ Take place in every supply channel
➢ They contribute the most to the total cost of logistics
➢ They are essential to the effective coordination and completion of the logistics
task

▪ Customer service (typically defined by marketing)

▪ Transportation
▪ Inventory management
▪ Information flows and order processing

Source: Ballou H. Ronald, Business Logistics/Supply Chain Management, 5 Edition

th

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▪ Supporting activities
➢ Support activities vary from company to company

▪ Warehousing (Space determination, stock layout, configuration, stock

placement)
▪ Materials handling ( equipment selection & replacement policies, order-
picking procedures, stock storage & retrieval)
▪ Purchasing (supply source selection, purchase timing, purchase quantities)
▪ Protective packaging (designed for handling, storage, protection from
loss/damage)
▪ Cooperate with production/operations (specify aggregate quantities,
sequence & time production output, schedule supplies)
▪ Information maintenance (info collection, storage & manipulation, data
analysis, control procedures)

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Summary on key components of logistics

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1.4. CLASSIFICATION OF LOGISTICS

▪ Ability of an organization to perform logistics activities
▪ In-house Logistics – Logistics activities are performed by technical facilities
means of transport, loading and unloading, warehouses, factories ...) and
available human resources of the enterprise.
▪ Outsourced Logistics – Logistics activities are done by hiring other enterprices
to do the work

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CLASSIFICATION OF LOGISTICS (cont.)

▪ Based on stages of supply, production and consumption

▪ Inbound logistics
▪ Outbound logistics
▪ Reverese logistics

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▪ Purchasing logistics

▪ Production logistics

▪ Distribution logistics

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CLASSIFICATION OF LOGISTICS (cont.)

▪ Degree of specialization of logistics enterprises

▪ 1PL – First party Logistics: A company or an individual who doesn’t outsource
transport and logistic activities to the third person
▪ 2PL – Second party Logistics: It owns means of transportation. They have their
own ships, trucks, airlines. They also provide their services on lease
▪ 3PL–Third party Logistics: It provides outsourced logistics services to companies.
These services can make up part or sometimes all of their supply chain management
functions, including Inventory storage and management; Picking and packing; Freight
forwarding; Shipping/distribution; Customs brokerage; Contract management…
▪ 4PL–Fourth party Logistics: It works with multiple resources, including 3PLs, to
manage planning and technology for a client’s logistics system
▪ 5PL–Fiveth party Logistics: It manages and coordinates the activities of 3PLs and
4PLs through information solutions related to supply and demand in e-commerce
delivery market

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CLASSIFICATION OF LOGISTICS (cont.)

▪ Commodity industry

▪ FMCG Logistics
▪ Automotive Logistics
▪ Checmical Logistics
▪ Electronic Logistics
▪ Petroleum Logistics
▪ Military Logistics

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FMCG Logistics

▪ Likehood of the customer coming back is very high

▪ Interest on each product is low
▪ Producers purchase raw materials from suppliers for
large-scale production
▪ Short consumption time
▪ Low unit price
▪ Manufacturer does not work directly with each final
users. FMCG is taken to final customer through retail
outlets

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1.5. LOGISTICS DECISION-MAKING

▪ Level of decisions in logistics

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1.6. THE IMPORTANCE OF LOGISTICS

At business level:
▪ Logistics plays an important role and is a key factor in helping businesses optimize operations,
enhance competitiveness, and improve customer satisfaction. More specifically:
▪ Cost Optimization: Efficient management of transportation, warehousing, and
inventory helps businesses reduce unnecessary costs
▪ Enhancing Operational Efficiency: Logistics synchronizes activities from production
to delivery, ensuring a seamless flow of materials and products
▪ Improving Customer Service: An efficient logistics system ensures on-time and
accurate delivery, meeting customer expectations.It also enhances return
management and post-sale services.
▪ Enhancing Competitiveness: Businesses with a robust logistics system can offer
faster services at more competitive costs, gaining better market positioning
▪ Effective Supply Chain Management: Logistics is an essential part of the supply
chain, facilitating strong connections between partners, suppliers, and customers

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1.6. THE IMPORTANCE OF LOGISTICS

At national level:
▪ Logistics activities are not only crucial for businesses but also play a key role in the economic
and social development of a nation. More specifically:
▪ Promoting Economic Development: Efficient logistics facilitate the rapid flow of
goods, optimize supply chains, and reduce transportation costs, contributing to
enhancing national competitiveness
▪ Enhancing Regional Connectivity and International Integration: Developing
modern transportation and warehousing networks strengthens connections between
domestic economic regions and links the nation to international markets
▪ Creating Employment Opportunities: Developing modern transportation and
warehousing networks strengthens connections between domestic economic regions
and links the nation to international markets.
▪ Ensuring National Security and Defense: A strong logistics system plays a crucial
role in ensuring the supply of necessary materials and equipment for national defense

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2. WHAT IS A SUPPLY CHAIN?

Example: OMO Supply Chain

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2.1. WHAT IS A SUPPLY CHAIN?

▪ A supply chain consists of all parties involved, directly or

indirectly, in fulfilling a customer request.
▪ The manufacturer and suppliers
▪ Transporters, warehouses, retailers, and even customers themselves

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2.2. OBJECTIVES OF A SUPPLY CHAIN?

▪ Maximize the overall value generated by a supply chain

Supply Chain Surplus = Customer Value – Supply Chain Cost

▪ Supply chain success should be measured in

terms of supply chain profitability and not

▪ in terms of the profits at an individual stage.

(Maximize total supply chain surplus)

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2.3. CHARACTERISTICS OF A SUPPLY CHAIN

(i) Stakeholdered Involved

Manufactu Retailer Customer

Supplier Wholesaler
rer

What are indirected parties involving in a supply chain?

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(ii) Flows in a supply chain

Information Ví dụ:
▪ Vinmart: provides the product,
Product as well as pricing and
Customer
availability information, to the
customer
Funds ▪ The customer transfers funds to
Vinmart
Supply chain ▪ Vinmart conveys point-of-sales
data as well as replenishment
orders to the warehouse or
distributor, who transfers the
replenishment order via trucks
back to the store

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▪ Decision phases in a supply chain

▪ Made for the long-term
Supply chain ▪ Configuration of the supply chain
▪ Resource allocation, function and capacity of production and
strategy/design
warehousing facilities
▪ The products to be manufactured or stored, the modes of
transportation to be made available along different shipping legs

▪ Time frame from a quarter to a year

▪ Maximize the supply chain surplus through a forecast for the
Supply chain coming year of demand, costs and prices; which markets will be
planning supplied from which locations, the inventory policies to be
followed, timing and size of marketing and price promotions

▪ Time horizon by weekly or daily

Supply chain ▪ Made decisions regarding individual customer orders including
operation inventory allocation or production to individual orders, set a
date to fill the order, generate pick lists at a warehouse,
transport mode used for shipment…

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3. LOGISTICS SYSTEM IN VIETNAM

Country Brief (2022)

▪ Population: 97.5 ▪ GDP :406.5 billion

millions, among the 20 US$
most populous countries
in the world
▪ GDP per capita:
▪ The median age : 30.8 4.162 USD
(stage-structured
population of gold)
▪ Unemployment:
2.05%
▪ Province & cities: 63

▪ Capital: Hanoi
▪ Inflation: 3%

▪ Largest city: HCM City

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▪ Freight modal share

▪ By tonnage (%,ton)
▪ Road and IWT are two dominant modes
of freight transport

▪ Railway plays a very limited role in the

development of freight transport system
in Vietnam

▪ By trip length (%,km)

▪ Truck completely dominates for

short distance (less than 100km)

▪ IWT mostly works for 100 to 200km

Source: VITRANSS 2

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▪ 6 strategic freight
transport corridors in
Vietnam

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Growth rate of logistics service industry

Number of Domestic The ratio of Contribution

In 2019 enterprises transport logistics of logistics
Growth Rate goods outsourcing service to
12-14% about
4000 increased by service at GDP
9.8% 68% 3.5%

Logistics service and freight volumes increase faster than GDP growth rate during 2008-2018

13% 12.60%

8.9%

6.01%

GDP Logistics Total tons Containerised

serice transported port tonnage

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Logistics performance index

▪ World Bank Logistics Performance Index (LPI) and Ranking, 2018

Overall LPI score Ranking Source: https://data.worldbank.org/income-level/lower-middle-

income and https://lpi.worldbank.org/international/global

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Logistics cost

▪ Comparison of logistics cost as a percentage of GDP of Vietnam

with other countries

X2

Source: Armstrong and Associates

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Challenging Issues of Freight Transport and Logistics Sector

▪ High reliance on trucking as a mode compared to less

expensive rail or IWT for longer distance

▪ Logistics operations in Vietnam, to the extend, are

costly relative to key regional peers like China,
Malaysia, and Thailand

▪ Lack of multi-modal freight transport network as a total

system and frequency traffic jam to the main port

▪ Lack of adequate logistics parks alongside major

highways and ports

▪ Cumbersome government regulation

▪ Inconsistent interpretation, implementation, and

enforcement of government regulations across
provinces and among government officials
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