le1. VIETNAMESE EXPORTS: The total export turnover of Vietnam has been witnessing rapid growth in recent years.

The export turnover of goods increased from US$5.4 billion in 1990 to over US$5.4 billion in 1995, US$14.5 billion in 2000 and US$32.5 billion in 2005. The figure was US$39.8 billion in 2006, and it is likely to reach US$47.5 billion in 2007. The ratio of export turnover to GDP also increased rapidly from 30.8% in 1990 to 46.5% in 2000, 61.3% in 2005, to 65% in 2006 and 67% in 2007, high levels in the region and in the world (4th among ASEAN countries, 5th in Asia and 8th in region). Export turnover per capita rose from US$36.4 in 1990 to US$75 in 1995, US$186.8 in 2000, and US$391 in 2005. The figure was US$473.2 in 2006 and is likely to reach US$557 in 2007. The acceleration of Vietnams exports can be explained by many factors, including the considerable expansion of export markets. There are four salient points in Vietnams export markets as follows. First, the number of countries and territories that import Vietnamese goods has increased rapidly in the last ten years. Before the doi moi (renovation process), Vietnam mainly had trade relations with the countries in the communist bloc. Since doi moi and the Foreign Investment Law, Vietnams export markets have been expanded. However, Vietnams exports only grew considerably after the US lifted its embargo against Vietnam in 1995, and Vietnam joined ASEAN; they further benefited from the Vietnam-US Bilateral Trade Agreement (signed in 2000) and Vietnams WTO membership (early 2007). Second, among 200 countries and territories that import goods from Vietnam, 28 countries have annual import turnover of over $100mil, and 16 countries over $500mil. Seven countries import more than $1bil worth of products from Vietnam. The US leads the list, followed by Japan, China, Australia, Singapore, Germany, Malaysia and the UK. Experts have advised Vietnamese exporters not to put all eggs into one basket and pay attention to expanding export markets instead of relying on a few markets. Third, several of the said markets could import much more from Vietnam, including traditional markets (former socialist nations) and new markets (Latin America, African countries, Australian (except Australia). Fourth, among the 200 countries and territories that have trade relations with Vietnam, Vietnam always has a trade surplus position with 159 countries, including the US, Australia, the UK, the Philippines, Germany and Belgium. Meanwhile, Vietnam always has trade deficit with 47 countries and territories, including Taiwan, Republic of Korea, China, Singapore, Thailand, Hong Kong, Switzerland, India and

Kuwait. The trade gap mostly occurs with nearby markets, not markets of source technologies, while the trade surplus occurs mainly with faraway markets, the source technology markets.

2. VIETNAMS INTERNATIONAL TRADE AND WTO Vietnams international trade WHAT IS WTO? The WTO stands for the World Trade Organization, an organization that intends to supervise and liberalize trade between nations. The organization officially commenced on January 1, 1995 under the Marrakech Agreement, replacing the General Agreement on Tariffs and Trade (GATT), which commenced in 1948. The organization deals with regulation of trade between participating countries; it provides a framework for negotiating and formalizing trade agreements, and a dispute resolution process aimed at enforcing participants' adherence to WTO agreements which are signed by representatives of member governments and ratified by their parliaments. Most of the issues that the WTO focuses on derive from previous trade negotiations, especially from the Uruguay Round (1986-1994) Vietnamese participation in the WTO- opportunities and challenges: Opportunities: 1. Participation in WTO would be a momentous turning point marking a complete reform of the Vietnam economy, causing a complete integration of the countrys economy into the international business community: At time of joining WTO, in order to have a fundamental foundation for marketoriented economy development, Vietnamese government must build and complete a legal system that is subject to WTO regulations. In fact, more than 150 legal texts were promulgated and changed. In addition, 300 under-legal texts, which explained this number of legal texts and helped them to function in the right way, have been reacted. The change of Vietnam legal system would have a great contribution to create a fairer business environment among all economic sectors. In the fact, in a long time, private sectors were not considered a type of Vietnam economic sectors and limited. However, to be able to compete in the integrated world, our perception about our economies must be changed. Along with it, our government has paid more attention to improving the development conditions of private sectors, causing the change in our

economic regime, from state economy to market oriented economy which is suitable to WTO regulations. Another thing that we need to consider is the change of administrative mechanism with aim to build and promote simple and effective one. This could also reduce the intervening measures from government. Besides creating a simple mechanism, in order to implement our commitments, our mechanism must be transparent and publicized. Thats why in recent research of Planning and Investment Ministry, more than a half of foreign investors said that they are no longer worried about our ambiguous administrative procedures. In conclusion, participation in WTO is not a goal, but a mean for reforming our economic regime, from state economy to market-oriented economy, providing a momentum for sustainable development. 2. Joining WTO would provide Vietnamese enterprises favorable conditions to expand their markets in a few items. As I said before, to implement our commitments, Vietnam government must be aware of the importance of change of our legal system. Our legal framework must have been uniform, sufficient, and suitable to common international laws. In addition, according to the first principle of WTO trading system, all economic sectors were treated equally, and enjoyed the same favorable development conditions. They also strive to working based on the market-oriented economic regime as well. As a result, in recent year, al great deal of local firm, especially in private sector, made their longterm investment and development plans suitably. Joining WTO also provides a great opportunity for penetrating foreign market, as all WTO members could be treated equally. Thanks to the clarified, simple and transparent legal system, the ability to foresee and access some kind of necessary information would be increased positively for Vietnamese businesses. Local firms can find the suitable way of development. It is clear that when participating in the WTO, some kind of subsidies and other kinds of business privileges, such as special consumption tax and energy consumption fee must be eliminated. In this case, Vietnam government must increase contribution toward infrastructure development through a great flow of foreign and state investment. In fact, during the 3-year period from 2007 until now, our infrastructure, especially for doing business was better than those in the past. In short, along with the change of policies, the change in infrastructure and trade policies provide a necessary and fundamental foundation for Vietnamese enterprises to develop sustainably. 3. Vietnam is still a favorable destination of foreign investment:

Firstly, in recent report publicized, Vietnam is still considered an attractive destination of foreign investment, as our legal framework were more and more suitable to WTO regulations and common international law in particular. Clearly, along with the change of legal system, the opening of financial market, for example, banking and stock market, made a great contribution to attract a recent flow of investment. In fact, compared to those figured in the past, the recent flow of foreign investment is twice. Second, in the long time, foreign investors were worried about their investment in Vietnam, as their development conditions were not the same as those of local firms. However, In recent year, especially from 2005, according to NT treatment, when some business privileges would be limited, , just like local firms , foreign investors would not only favor the same conditions for short and long-term development, but be regulated by the same Investment Act, Business Act At the time of joining WTO, Vietnam enjoys the results (more than 50 years of) of the eight multilateral negotiations relating to tax reductions of the World Trade Organization immediately and unconditionally. So, local firms can have an opportunity to buy materials, goods and equipment with the same quality in the cheaper price. Low cost of input materials and equipment help goods made in Vietnam more competitive, as most of our exported goods are still dependent on imported materials. Furthermore, to able to survive in fierce competition, not only technology innovation, but the optimal uses of resources for doing business, such as, materials, and capital, should be considered, so providing a fundamental foundation for development and increasing our competitive advantages in the world economy. In addition, thanks to the innovation in administrative mechanism, many administrative costs and under-table costs, such as, lobbying and bribing, can be reduced. Last but not least, the renewing infrastructure which was improved a lot through a great deal of investment can have a contribution to a decrease in the cost of doing business. 4. Exported goods and services can be easier to penetrate foreign markets: According to the first principle- equality and non-discrimination, in time of joining WTO, Vietnamese goods and services would be equal to that of other WTO members. Vietnamese goods and services must be treated equally from those countries they imported from. In this case, some bilateral agreements such as lowest import tax of certain goods of a country can put into practice with all WTO members. Incentive measures for domestic goods and services should be eliminated. In addition, the developed countries must reduce their contribution toward their less competitive products through lowering tariff barriers and especially eliminating non-tariff barriers, as Vietnam is officially WTO members, and every measure which puts into Vietnam must be suitable to WTO trading system.

Let take garment and textile industry for example. For textile and garment, by 2005, when the ATC is no longer effective and WTO members remove quota to each other, if Vietnam have not become an official member, it remains subject to quota imposed by WTO member countries, including the US, EU, and Japan the most important markets for Vietnam. If by then, Vietnam has successfully completed its bid to the WTO, though free of quota, our textile products will have to compete with countries with similar advantage in labor like China. Vietnamese businesses now do not have to worry about export quotas in the US market. Import tariffs on Vietnamese garment and textile products exported to WTO members will be imposed following the NTR status. Domestic businesses will then have better conditions to penetrate deeply into foreign markets and increase their export turnover when, many negative influences of an unfair competition, such as some privileges of domestics goods, and especially some non-tariff barriers must be limited Furthermore, Vietnamese enterprises no longer find it difficult to find out the information about trade policies of other countries, as according to WTO regulations, all WTO members trade policies must be publicized and transparent. To sum up, during the 3-year period from Vietnam joined WTO, not only protection measures, but some other countries incentive for their own goods and services would be limited and eliminated, providing great opportunities for local firms to expand their market, keep their share in the world economy as well. 5. Domestic customers can gain some benefits, as Vietnam became an official WTO member: After joining WTO, Vietnam must open its market to all WTO members. Measure of quantity limiting would be forbidden. Carrying out the second obligation, Vietnam must undertake ceiling tariffs or to tie down import tax of many goods. Tax privileges which local businesses are enjoying, but seem to be un-sufficient with international practice, must be greatly reduced or totally abandoned. This can make a contribution to attract a lot of imported high-quality goods and services from other WTO members. In addition, to be able to survive in the highly competitive world market, our enterprises must improve and develop their capacities, ranging from production to processing, so causing the increase in the quality of products. Thats why Vietnamese consumers nowadays have great opportunities to buy a variety of goods with high-quality level in the cheaper price Another thing that we need to consider is the increase in our quality of life. Obviously, during 3 years from 2007 until now, there has been a rise in the number of high-quality services in Vietnam, such as, education, medical treatment, and travel, through a flow of investment, as the agreement of market opening would allow foreign services and services providers to enter our market easier. In addition, we have more right to access the information and approach the new means of entertainment, causing the increase in the satisfaction level of our local customers. Go abreast with above benefit, the increase in international trade indirectly leads to growth of demand in the national markets, thus making the demand for labor rises. This also causes the income

rises which have an obvious effect on our quality of life. In fact, compared with the income in past, the income now goes up almost three-fold. Above is all positive impacts on our whole economy. However, every sector would have its own opportunities for development. In the next chapter, we will consider some opportunities for three main sectors: agricultural, industry, and services sector. Challenges: Everything, just like a coin, has two sides, and participation in WTO is not an exception. The theory is that the integration brings more advantages than disadvantages, when Vietnam espoused world-wide. However, such losses are not minimal and people must be aware of those losses, especially in non-industrial countries, such as Vietnam where businesses are not competitive in world markets. Thats why in this part, we try to analysis what such losses are. 1. Vietnam economy is more dependent on the globalization process: After being a official WTO member, Vietnam legal system was strictly subject to the principle of WTO trading system. In addition, every trade measures or policies are controlled and supervised by the WTO secretariat. So, the fluctuation in monetary and political policies in the world can have negative influences into Vietnam economy. The 2008 crisis can be an obvious illustration. In this year, the real estate bubbles in US financial market have heavily negative influences on Vietnam financial market. As a result, many small and disperse firms in Vietnam cannot survive and overcome this difficulties. About 20 percent of small- and medium-sized enterprises have gone bankrupt because of an inability to access funds. A further 60 percent of companies have also faced a host of difficulties, especially in finding a balance between supply and demand due to a hike in input costs and a shortage of capital. 2. Fierce competition: Joining WTO force Vietnam government to lower their tariff barrier and to eliminate non-tariff measures, causing the decrease in protection measures and export subsidies. Along with some incentive measures for foreign investment, this also leads to the invasion of foreign goods and services into Vietnam. Realizing that, local firms must accept fierce and direct competition with imported goods, as well as local and service providers. It is time for improving our own advantages, as without them, you will lose in this competition 3. Business environment will be more complex: To able to compete in the integrated world, Vietnamese enterprises would understand the other countries policies, especially taxation policy and apply it effectively. Taking an opportunities and being apt with tendency of tax reduction are still an objective required for all Vietnamese firms. In addition, knowing information

about other firms from other countries will be another requirement for surviving in the highly competitive world market. 4. New export barrier will be more sophisticated and complex. When tariff barrier were reduced, Vietnamese enterprises must be aware of the new protection measures: Technical barrier to trade: some requirements of labeling, food security and environment. Barriers related to the property right. The anti-dumping measures, subsidies-limiting measures. 5. Some cost of doing business can be increasing, such as: o o Cost of property right, and brand-building Cost of improving the competitive advantage.

o Cost of building quality management standards: ISO-9000, ISO 14000, HACCP, GMP, SA-8000 o Cost of attracting, retaining and training human resources.

o Cost of advertising as well as keeping and expanding their share in world economy. 6. Lastly, Vietnam government must be aware or the threat of some conflicts appeared: o o o interests o Conflict between domestic protection and integration. Conflict between ethnic and foreign culture. Conflict between general development requirements and personal

Conflict between the national benefit and the international benefit.

In addition, participation in WTO also leads to widen income gap between the rich and the poor.

Above are all six dilemmas that Vietnam government and Vietnam enterprises need to consider while they penetrate to foreign market. However, realizing that, although industry and services sectors would face a little challenges, especially focusing on how to keep their share in the fierce competitive market, agriculture sector will face up to a great deal of problems, when cutting their subsidies. According to new report which is publicized by An Giang University, during 3 years from 2007, farmers and agricultural produces must deal with and overcome some difficulties below: Despite all the potential benefits listed here, Vietnam will no doubt face strong international competition, which may result in more damage to our farmers if there is no immediate determination by the Government to remove existing constraints. Presently, most Vietnamese farm products are more expensive than foreign products, but the quality is lower. For example, premium quality Thai rice is a low yielding traditional variety that is produced in natural, rain-fed conditions without much fertilizer or pesticide. Hence, the production cost of Thai rice is below 0.5 t/ha. In contrast, Vietnamese rice is usually of the high-yielding, short-duration variety. Farmers have to pump out water to spread out seeds and later pump in water to irrigate. In addition, they have to apply large amounts of fertilizer, then they have to use pesticide to protect from various pests. Towards the end, they have to continuously pump out water to prevent submergence of the crop. All these operations add more costs to the production, which is usually no less than 2.5 t/ha. Other crops have a similar fate. In 2000, Vietnam will import 92 percent of its milk powder, 85 percent of its cotton, 75 percent of its paper pulp, and more than 300,000 tons of corn and soybeans to meet the demands of the domestic food processing industries. In other words, according to the Minister of Agriculture and Rural Development, it is much cheaper to import these agricultural products than to bear the high production costs of locally produced raw materials. The Government needs to invest more in research and development in order to remove these constraints and lower the production costs of our farm products. Furthermore, due to fragmented production by individual farming households, whose land holdings average less than one hectare apiece, it will be impossible to respond to foreign buyers with large shiploads at any given time. The government has to improve agricultural policy so the industry can benefit from economies of scale in the production of exports (i.e., we need more attractive regulations for agricultural cooperatives and private farmlands). As better crop varieties are bred, especially by foreign or joint venture seed companies, the intellectual property rights provisions in the agricultural clause of the WTO will prevent poor farmers from freely multiplying the seeds of the patented crop varieties and animal breeds. As a result, poor farmers may not be able to take advantage of new technologies.

Foreign agribusiness companies will come in and compete with the local, more inefficient companies, which may eventually be pushed out of production. For example, almost all Vietnamese animal feed companies went bankrupt when the Thai company, The CP Group, and the American company Cargill, established feed mills in Vietnam. Another example is that 80 percent of the cooking oil used in Vietnam has to be imported because local industries are too inefficient in converting copra, peanut, etc. into oil. Of course, livestock growers can also buy cheaper and more efficient feeds than before. The public cannot continue to support inefficient companies, whether they are state or privately owned. Our proposal to maximize the opportunities and limit the challenges: After having become a member of the WTO, Vietnam has to face to many challenges beside opportunities. For the stable development of Vietnam economy, we have some following proposals: 1/ To perfect the economic policy system: - We have to reform economic policy and law system so that they are adequate with the WTO provisions. To comply with WTO rules, the most important prerequisite for economic policy instruments is to avoid trade distortions. We have to ensure the equal treatment (ownership neutrality) between private, state-owned and foreign invested enterprises. - Enforcing the reform in financial and banking sectors. Perfect the management system in real estate and market. Reform the accountancy and corporate finance in order to satisfy international standards. - Having new policies which are suitable to WTO provisions to support new industries, new products. Eliminate, at the same time, all forms of subsidies or export support which violated the WTO rules. - Build and perfect the law of market competition, anti-dumping, anti-subsidies, so that Vietnam can construct a transparent, competitive market. Standardize the technical criteria in order to protect the domestic consumers. - Integrate the fiscal and monetary policies, use flexibly the economic instrument such as interest rate, currency exchange rate, line of credit to control our macroeconomy. Upgrade the quality of economic forecast to exactly define and control the demand supply relationship, market price . 2/ Simplify the administrative procedures: - Eliminate the bureaucracy, reduce the time and the cost needed for settle an enterprise. - Popularize all policies and administrative system. - Improve the administrative procedure through internet. Reform the administrative will reduce the corruption, create an efficient competitive market, decline the cost for enterprise. Efficient and transparent administrative and juridical implementation procedures will improve significantly the reliability of Vietnam business environment. 3/ Improve the quality of human resources:

People said that human resource is one of the strength of Vietnam economy. Young labor take a part of 70% among Vietnamese labor and this is one of our Vietnamese competitive advantages. In fact, we only have advantages in the sectors which requires a lot of medium or low educated labor. We are still lacking for labor in modern, high-technology sector which requires well-educated labor. That is why we have to improve the ability of Vietnamese workers, especially in high added-value sectors We have to support the research and development (R&D) within companies, universities and research organizations. 4/ Improve the quality of infra-structure: - Build new modern infra-structure such as road, airport, port, or renovate the existent infra-structure to attract more foreign investment. - Develop the infra-structure by mobilizing many sources of capital such as government capital, ODA, capital of foreign enterprise through BOT, BTO, or BT contract. 5/ Increasing the role of business associations In a market economy, business associations and other intermediate institutions play a vital role in policy networks between government and industry representatives. Effective communication channels are needed for developing a vision for Vietnams industrial strategy and its future place in international markets that is shared by all stakeholders in Vietnams economic modernization, private industry, state owned enterprises, foreign investors and the government. If today many firms still do not make use of the potential role of business associations as information channels, a better publicity and further political independence seems to be needed so that intermediary institutions can play an effective role in shaping industrial policy in Vietnam. The government could support the development of independent intermediary institutions, particularly for export promotion activities, helping domestic firms to discover new export markets and informing foreign buyers about the potential of the Vietnamese enterprises and the domestic market. 6/ Increasing the competitiveness of Vietnamese enterprises - Vietnamese private businesses have to invest more time and effort in exploring foreign markets and developing new marketing activities and R&D to develop products suitable to the quality requirements of export markets - Have to be adequate with the fact that all of support and protection from government will be cut after Vietnam had become a member of WTO. - Invest in new technologies and R&D to be able to meet the technical standards and quality requirements of the foreign enterprises. - Bring added value to the existing production, in order to increase competitiveness. - Find new potential market and foreign partners, in order to reach the economics of scale and integrate more effectively in world market 3. TRANSPORTING COMPANIES IN VIETNAM

4. VIETNAMS TRANSPORTATION AND FORWARDING SERVICE Vietnams transportation Shipping market and trade The rapid growth of the Vietnam economy and its increased integration into the global trading system has seen Vietnams external trade volumes accelerate during the last five years. In this period, exports to Europe and the United States (US) have been growing at a faster rate than Asian volumes. However, the Intra-Asia trade continues to dominate the shipping market in Vietnam representing an estimated 37 percent of total throughput volume in the country. Due to the lack of deep water port facilities in the country, Vietnam can only be served by smaller feeder ships of less than 25,000 deadweight tonnes (DWT) (approximately 1,600TEU Twenty-Foot Equivalent Unit for container ships). Ho Chi Minh City, Haiphong, Cai Lan, Quinhon and Danang ports have regular weekly container services by all leading shipping companies. Presently, the Vietnam shipping industry is dominated by international carriers who are able to provide global coverage and a wide range of services. The local carriers are largely focused on domestic and regional shipping services within South East Asia. As a result of the terms for accession to the WTO, Vietnam has allowed foreign shipping companies to establish joint ventures with majority foreign ownership. A number of foreign shipping lines have also been granted licenses to operate fully owned companies in Vietnam. This includes APL a subsidiary of Singapores Neptune Orient Lines (NOL). APL is one of the top three international carriers in Vietnam with a leading market position in Vietnams trades with the US, Europe and the Middle East. The company also provides regular shipping services to and from the rest of Asia, Australia and South America. Port Sector Vietnams 3,260km coastline has 126 ports; of which 24 handle ocean cargo. The management of ports is done by Vinamarine (Vietnam National Maritime Bureau), a unit of the Ministry of Transport and Communications (MOTC). Vinalines, another unit of MOTC, is the owner and operator of the largest fleet of commercial ships in Vietnam. Over the last 10 years, containerised throughput within the country has been growing at about 19 percent per annum. However, Vietnams port sector is facing a number of critical challenges, including the lack of deep water ports that can receive larger ships; old and inefficient port facilities; and suboptimal landside infrastructure. Ho Chi Minh City, through which more than 70 percent of Vietnams container throughput passes, is a critical gateway for both imports and exports. However, potential congestion issues are expected to arise in its ports within the next five years as port capacity expansion plans lag behind the projected growth in container volumes. Foreign port operators are increasingly seeking to develop and manage new facilities in Vietnam, with several licenses approved in 2006. The majority are focused on developing alternative ports near Ho Chi Minh City. Efforts are also in progress to

develop an international transshipment port at Van Phong Bay (near Nha Trang) and at Cai Lan in Quang Ninh province in the north. Air, Road and Rail Transportation The transportation sector has had a positive impact on Vietnams economic emergence. However, challenges such as capacity constraints and high accident rates due to rapid urbanisation must be addressed. The sector also lacks coordinated policy planning, sufficient budget and suffers from various regulatory and procedural deficiencies. Like the seaports, Vietnams airports are also facing severe capacity constraints. The countrys 21 airports, including three international facilities - Noi Bai in the north (Hanoi), Danang in the central region and Tan Son Nhat in the south (Ho Chi Minh City), are operated by the Civil Aviation Administration of Vietnam (CAAV). To meet the growing passenger and freight traffic needs, the Government has plans to develop a total of 18 domestic and six international airports by 2015, at an estimated cost of US$7.2 billion. Of Vietnams 222,179km of roads, only 19 percent are paved. Among all the transportation segments, the roads receive 80 to 90 percent of Government funding. However, multiple levels of jurisdiction involved in financing and implementing road reforms make the administration of this sector highly complex. The rail network in Vietnam is regulated by the Vietnam Railway Administration and operated by the Vietnam Railway Corporation. Both are government bodies. Currently, railways are the least utilised mode for transporting cargo within the country, mainly due to poor service quality and high costs. Despite plans to connect to the proposed Trans-Asian railway network and a new express railway project, transportation by rail is not set to play a crucial role in the near future. Reality of forwarding service of Vietnam: Forwarding in Vietnam has been formed long. Before Liberation Day, in South Vietnam, there are many delivery companies which mostly do tax declaration in road transportation, in which has some agents of foreign logistics firms. In the North, since 1960, the import and export enterprises have been responsible for transporting goods, so the import and export enterprises established logistics office, import and export branch, delivery station at the railway stations. In this period, forwarding was not intensive activities, working and simple produce. After Liberation Day, to focus on managing transportation, Foreign Trade Ministry ( now it is Commerce Ministry) took delivery organizations in a relationship from North to South. The Vietnam National Foreign Trade Forwarding and Warehousing Corporation (Vietrans) was born. During the subsidy period, forwarding service was limited and Vietrans was the only agency which was allowed to delivery import and export goods authorized by enterprises. Since the 6th National Party Congress in 1986, our country has been moving to market economy which are regulated by state, trade was expanded, so forwarding developed rapidly, the Vietrans didnt monopolize. The forwarding was expanded, number of forwarding company increased and professional skills was improved quickly. Many forwarding companies of Vietnam joined in International Federation of Freight Forwarders Associations (FIATA). Up to January 31st, 1998, there were 13 forwarding companies of Vietnam recognized as associate members of FIATA. Up to May 7th , 2000, there were 30 forwarding companies. Total, there were 43 forwarding companies recognized as associate members of FIATA.

Compared with other countries in the world, nowadays, forwarding is a nascent industry. In fact, in our country , there isnt organization which manages licensing, inspective and supervisory activities for delivery service, so many economic sectors participated in forwarding and service is widespread in the market. Besides, according to subjective judgments associated with gathering information from import export enterprises, forwarding in Vietnam still exists some pity - Firstly, although forwarding service is diversified quantity but quality of service is not high. Currently, at the ports, there still exist status of goods blocked because the set of documents for goods is in error, forwarding agent dont arrange delivery schedule scientific, means of transportation dont arrive on time and loading capacity can not meet requirements... For example, at the main ports invested with modern equipments, the average loading capacity is 3500 tons/ m berths per year; at the other small ports, loading capacity reached 2000 tons/m berths per year. Meanwhile, the average loading capacity at the other ports in the area such as Singapore port, Indonesia portreached 5000 tons/m berths per year. Loading capacity at the ports in Vietnam is only 60% of other ports in the region. - Secondly, our countrys maritime industry is developing fast but it still exists such as fleet of ship has small quantity and dont balance types of ship ( Until 31st December, 2007, feet of ship has 1.199 ships with total capacity 2.937.327 GT and gross tonnage 4.384.880 DWT, in which, mostly is Grain Cargo ship, General Cargo ship); capacity of ports is limited, there is no international transshipment port; container ships carrying goods to Vietnam port are feeder vessels so transportation costs is high; price of maritime services is not competitive. - Thirdly, in delivery of goods procedure, there are not the tools and information processing, communication, classification, measuring, protection equipment,commodities in the delivery process so delivery time in Vietnams seaports is slow and procedures are cumbersome so it must through many manual processes. - Fourthly, due to limited budget, investment in infrastructure for forwarding industry as well as the training human resources with professional knowdlege can not implement immediately.

5. DIFFERENCES BETWEEN BOOKING SPACE AND VOYAGE CHARTER

Liner Charter Ocean Liner An ocean liner is a ship designed to transport cargos or people, from one seaport to another one, along regular long-distance maritime routes according to a schedule, which is widely established, called line voyage. Features of Ocean Liner Liners are designed to transport small-weight goods, dry goods. Ocean liners are usually well-equipped and strongly built. Liners design is usually more complicated than a normal cruise ship. many holds average capacity: 10.000 20.000 MT average speed: 25 - 30 knots 2.5MT 7MT s crane.

Concept: Liner charter, or being called booking shipping space. The Traders, directly or through a chartering Brokers, requires the Ship Owners/ Carriers to keep a rental of a part of the ship, to transport goods from one port to another one. Features: - The routine which the liner run is known in advance, it's in the rules announced by the carriers, which is called routing. - The time and schedule are published (daily, monthly, or even quarterly). - The liner freight tariff isnt by negotiated, but by calculated by the Owners. - Liner terms is regulated and is printed on Bill of Lading, to issue to the Cargo owners Advantages
Cargo unlimited. The ship owners undertake the cargo loading => simplify the procedure. Considering the conditions of purchasing is easy, because the liner runs on a fixed-schedule (predetermined schedule)

Its convenient for shippers in calculating business efficiency Shippers hold the initiative in booking. Booking procedure is easy and simple. Disadvantages Freight-rate per transported unit (ton or cubic metre) is usually higher than the freight in voyage charter. The traders have to accept all the terms printed on Bill of Lading (not negotiate). This method of affreightment is not flexible in operating the transport if the port of loading or port of discharge is not included in the routine of the liners. VOYAGE CHARTER Concepts TRAMP SHIPPING
fixed schedules fixed routes published ports of call

Concepts VOYAGE CHARTER The voyage charter is a contract for the carriage of a stated quantity and type of cargo, by a named vessel between named ports against an agreed price, called freight The relationship between the Charterer and the Ship-owner is adjusted by a contract called Voyage charter party (C/P), which are signed through negotiation. Negotiations are usually carried out by Charterers and Owners through a Shipbroker . A Voyage charter party contains: Names and addresses of ships owner and charterer,Vessels name and description,Commodities, Ports of loading and discharge, Laydays - cancelling date, Laytime, Freight rate There are normally 3 forms of voyage charter
Single voyage Round voyage

CHARACTERISTICS Cargo
large quantity homogeneous fully loaded

Consecutive voyage (connective voyage)

Ship

- one deck - a lot of holds with wide hatches - large tonnage Terms - regulated in details on the C/P * Freight rate

Pros and cons

PROS: WIDE-SPREAD
High flexibility Cheaper than liner charter The charterer can negotiate freely The speed of conveyance is fast

CONS - The technique of chartering and signing is very complicated - Freight rate fluctuates regularly and very strongly III. COMPARATION AND GUIDE Differences between liner and Standards Route Liner (tu ch) Usual running. Having regular route. Coming to regular ports Regular premium by Liner freight conference (easily and simple to hire a liner) Remain stable for along time. Include the cost of loading and discharge B/L (which was printed by ship owner) Package or small volume commodity Complicated, more than 1 deck, good equipment and high speed Tramp (tu chy rng) Unusual running Its route depends on the shippers requirement It depends on the laws of supply and demand. Unstable Depends on the contract between shipper and ship owner Contract (which was negotiated by shipper and ship owner) Large volume as similar as ships tonnage 1 deck Wide hold mouth to load or discharge modity more easily

Premium

The relationship Commodity Ships construction

Guide for chartering selection

commodity: Small volume, or dry and packaged cargo or were contained in containe =>booking shipping space Large volume or our goods are bulk cargo => voyage charter route and time: If you want the ship run in your route and your time or run from loading port to discharging port directly => voyage charter If you like stable cost and be easy to hire a ship => booking shipping space

6. BILL OF LADING Chapter 1: Bill of Lading: 1. Definition: B/L is a document with transporting goods by ships is issued by a carrier to a shipper to determine the legal relationship between the carrier and shipper. 2. Function of B/L: - Is the carrier's receipt confirming receipt of goods to transport, perform the contract of carriage. - As proof of ownership of goods, allowing the holder of the original bill of lading of receipt goods when the ship landed, the right to sell or transfer the goods indicated on the bill of lading. 3. Effect: - As a basis for import and export tax, make procedures of export or import. - As a document enclosed a commercial invoice which the seller sends the buyer or bank for payment of goods - As vouchers to mortgage, sale, transfer goods - As a basis for determining the amount of goods were sent, against which to monitor the performance of the contract
4. Content:

There are many kinds of bills of lading which are issued by many carriers , the contents are different. Bill of Lading is printed into patterns, usually include two aspects, with the main contents as follows: * On the first includes following content: - Number of bill of lading (s vn n) - Shipper (Ngi gi hng) - Consignee (Ngi nhn hng) - Notify address (a ch thng bo) - Shipowner (Ch tu) - Flag (C tu) - Vessel hay name of ship (Tn tu)

- Place of receipt (Ni nhn hng) - Port of loading (Cng xp hang) - Port of discharge (Cng d hng) - Via or transhipment port (Cng chuyn ti) - Place of delivery (Ni giao hang) - Name of goods (Tn hng) - Marks and numbers (K m hiu) - Kind of packages and discriptions of goods (Cch ng gi v m t hng ho) - Number of packages (S kin) - Total weight or mesurement (Trng lng ton b hay th tch) - Freight and charges (Cc ph v chi ch) - Number of original bill of lading (S bn vn n gc) - Place and date of issue (Thi gian v a im cp vn n) - thng l master's signature (Ch k ca ngi vn ti) * On the second page includes following content: Include provisions relating to transport which are printed by shipping companies, the charterer has no right to add and have to accept it. The back of the sheet usually includes content such as definitions, general provisions, terms and responsibilities of the carrier, the terms loading and delivery, terms, fees and charges, terms and limits of liability of professionals transport, free of charge provision of the carrier ... Gm nhng quy nh c lin quan n vn chuyn do hng tu in sn, ngi thu tu khng c quyn b sung hay sa i m mc nhin phi chp nhn n. Mt sau thng gm cc ni dung nh cc nh ngha, iu khon chung, iu khon trch nhim ca ngi chuyn ch, iu khon xp d v giao nhn, iu khon cc ph v ph ph, iu khon gii hn trch nhim ca ngi chuyn ch, iu khon min trch ca ngi chuyn ch... 5. Types of Bill: Currently, the bill of lading has many different types, each type of bill of lading has specific requirements 5.1. Based on the way of transferring of ownership of goods - Straight Bill of Lading (vn n ch danh): of this lading, it was clearly named consignee - Order Bill of Lading (vn n theo lnh): This bill of lading, the goods will be delivered "by order of the shipment" or "by order of the consignee" - Bearer Bill of lading (vn n xut trnh): This bill of lading, people do not sign the consignee. Goods will be delivered to the person presenting the bill of lading

5.2. Based on the notes on the bill of lading, bill of lading is divided into perfect lading, imperfect lading - Clean Bill of Lading (vn n hon ho): As the bill of lading that the carrier does not approve bad comments about the state of commodities and packaging - Unclean Bill of Lading: As the bill of lading that the carrier approve bad comments about the state of commodities and packaging such as having holes, burning, torn packet. 5.3. Based on the way of transporting, bill of lading is divided into Through Bill of Lading and Direct Bill of Lading - Through Bill of Lading: is representative of lading for all trips when the transship happens. - Direct Bill of Lading: is used when goods are transported on a ship straight from the loading port to port without transship 5.4. Based on the time for issuing bill of lading and the time for loading and unloading goods - Shipped on board Bill of Lading (vn n xp hng): a bill of lading was issued to the shipment after the goods have been loaded on ship - Received for shipment Bill of Lading (vn n nhn hng xp): a bill of lading was issued to the shipper as the carrier receives goods to load them on ship 5.5. In addition, the following types of bill of lading is also often used - Charter party Bill of Lading (vn n theo hp ng thu tu): be used when goods are transported on a voyage charter - Combined B/L (vn n kt hp): A type of bill of lading is used when cargo is transported by many different means - Short B/L (vn n rt gn): a type of bill of lading summarizes important points -And some other types of B/L: Stale B/L (vn n n chm), House B/L (vn n tp th), Master B/L (vn n ch). 6. Rules to adjust B/L 6.1. Sources of international law: Currently there are two main sources of international law on maritime transport, including: - Convention Brussels 1924 - Convention Hamburg 1978 6.2. Maritime Code of Vietnam. (B lut hng hi Vit Nam) : issued on 30 May 2006 in 1990 and entered into force on 01 December 01 1991. Basically, like the Maritime Law Hague-Visby Rules 6.3. Under the provisions of UCP 600 7.Difficulties in using B/L: - The rate in sending B/L is slower than goods: Therefore, the consignee has no bill of lading for receiving goods, while it takes more storage charges, demurrage (lu bi)

- Heavily dependent on natural, marine conditions: face many risks such as stranding, sinking, burning, stabbing, and another, hit the ground, missing pirates .. gp nhiu ri ro nh mc cn, m, chy, m va nhau, va phi ngm, mt tch, cp bin... - Ship's speed is low: speed is only about 14-20 miles / 1 hour - Use of lading is costly : costs of printing and issuing bill of lading is expensive by because B/L is printed into many in the original and copy- The use of B / L may be at risk in the delivery of goods : if B/L is stolen for B / L is documents of ownership of goods. Chapter 2: 1. Reality goods transportation by seaway in Viet Nam: Nowadays, imports and exports of Viet Nam almost use ocean liner and 84% the volume of exports and imports must hire foreign shipping company, as domestic merchant shippings are few, small, old. Domestic owners of goods normally hire ship through middleman, agency, so they only receive Bill of lading from owner of ship. Therefore, to avoid risk, import and export companys need know thoroughly how to use Bill of lading. While demand to import and export goods is more and more increasing, understanding of the hiring ship still limit. Hence, owners of goods need know important informations: vessel name must be in the waybill, the carrier, the ships nationality, quality of ships, tonnage When hiring foreign cargo ships, owners need record clearly names, registration brand goods because the international ports may refuse loading no signs goods or goods whose signs are not clear. Dont write exact quantity, should plus or minus percent difference in weight. When hiring foreign cargo ships, owners also need note that the ships nationality are in the black book (list ) of the importing country (for examples: if we export goods to USA, we cant hire ship of Cuba, North Korea). In methods of hiring ships are common that hiring liner. This is type of ship in a certain line, it visits certain ports and have a fixed route. So it often faster and priority access terminals. The cost is relatively stable, not high => it is convenient for new business enterprises. Disadvantage of this ship is only suitable for transporting cargo in small quantities, conditions of carriage printed in the bill of lading and no access the harbor outside route 2. Difficulty Limited to import and export enterprises: + Speed

The speed sending the original bill of lading is slower than its goods. Today, advances in science and technology in the maritime transport, so the speed of transporting goods is very quick. Meanwhile, in many cases, journey of original bills of lading which are sent by airway or by mail is often slower than journey of goods transported by ship. Therefore, the consignee has no bill of lading for the loading, at the same time, it takes more storage charges, demurrage charges. The speed of the vessel is low, speed is only about 14-20 miles / 1 hour and the speed of the vessel operators are still limited + Risk : - Depend on natural, marine conditions, risky as sinking, burning, stabbingAccording to the insurance companies, in the world, the average monthly has about 300 ship accidents, including many cases of total loss. The use of B / L may be risky in the delivery of goods (if B/L of enterprises are stolen) because the B / L is evidence of ownership of goods. + Cost :
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Using of B/L is very expensive. Firstly, the cost of printing and issuing B/L is not small because B/L must be printed into the original and copies. Secondly, printing B/L requires a lot of efforts and expense due to printing words back of B/L is very small to combat counterfeiting. Thirdly, the B/L is not high standard; each carrier will issue a type B/L; hence, using B/L takes additional storage costs. According to the WTO, the total value of export and import turnover in 1996 reached 10,380 billion, in there, the cost of B/L is almost 7%. Using B/L must use original, so it cant apply the achievements of information technology. Meanwhile, transporting goods by seaway accounts for more than 80% goods in international trade. Therefore, the bills of lading and a series of other documents in international trade become costly obstacles and trends in international trade. Especaily , on 01.01.2011, the international courier company in Vietnam began to increase freight rates for each bill of lading sent to international. FedEx increases in the range of 4 -7% DHL is the lowest increase of 4%. Express International delivery company TNT - The minimum charge is 0.7usd / bill of lading. JSC Courier Post (EMS) and the postal system VNPT - 15-20%. This is the inevitable trend of shipping industry in the future.

Increase the surcharge fees (fuel, transport) and by the effects of inflation ... These large companies often will be the leader in the implementation of these price increases. + B / L is not suitable for the application of media modern automatic data (fax, teleax ...) by the use of B / L in the payment and delivery .... requires original documents + If you do not understand the legal provisions of the bill of lading, the user will encounter risks and disputes 3. Recommendation A document which can substitute for B/L and have function similar to B/L was born. That is seaway bill. It can overcome these disadvantages of B/L. Firstly, when using seaway bill, consignee can receive goods on ship without original B/L. Cargo will be delivered to the consignee on the basis of the conditions. Secondly, seaway bill is not a document of ownership of goods. So it is not necessary to immediately send the original to the consignee at the port of destination that we can send a copy through the system of automatic data transmission. Thus, the exporter can immediately send Seaway bill to the consignee within minutes. Consignee and the carrier dont have to worry about when delivering without documents. Thirdly, when using the Seaway Bill, the terms printed in very small letters on the back was replaced by a reference to the conditions, provisions relating to transportation on the front with a short terms. On the other hand, the carrier just issues an original seaway bill. Fourthly, Seaway bill allows to deliver to a person when they prove they are legitimate consignee. This helps to limit a lot of risks in the delivery, because Seaway bill is not evidence of ownership of goods, if it is lost or misplaced, it will not cause serious consequences. However, the Seaway bill also has disadvantages. Seaway bill hinders international trade (because Seaway bill is very complicated and difficult when the carrier and the consignee are strangers and they are a national difference; national laws of some countries and international conventions dont admit seaway bill that it is a shipping document). Moreover, the seaway bill is not negotiable, and although accepted by banks for documentary credit, they do not afford the security that traditional bills of lading provide. In Vietnam, the using Seaway bill is still very new, although there were legal basics to apply the Seaway Bill.
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In short, all foreign trade must be based on the domestic and international rules .Traders have to understand the forms and features of the b / l, the rules on new foreign trade transportation against the risk of disputes .

7. VOYAGE CHARTER PARTY

1.Charter party 1.1 Definition

Charter Party is a contract in which a shipowner agrees to place their ship, or part of it, at the disposal of a charterer for the carriage of goods from one port to another port on being paid freight, or to let the ship for a specified period, the remuneration being known as hire money. This term is derived from the fact that the contract which bears this name was formerly written on a card and afterwards the card was cut into two parts from top to bottom, and one part was delivered to each of the parties, which was produced when required, and by this means counterfeits were prevented.

1.2

Type of charter

There are two main types of shipping, liner shipping and tramp shipping. Liner shipping is a kind of ship which operates within a schedule and has a fixed port rotation with published dates of calls at the advertised ports. Tramp shipping or tramper on the other hand is a ship that has no fixed routing or itinerary or schedule and is available at short notice (or fixture) to load any cargo from any port to any port. From those two types of shipping, we have three main types charter: Liner charter from the first type of shipping- liner shipping, voyage charter and time charter from the second type of shipping- tramp shipping. A brief description of these three types of charter is given below. However, only the voyage charter party is examined in this essay.

1.2.1 Liner charter

A liner service implies a fleet of ships, under common ownership or management, which provides afixed service, at regular intervals, between named ports, and offer themselves as general carriers of any goods requiring shipment between those ports. A fixed itinerary, inclusion in a regular service and the obligation to accept cargo from all comers and to sail, whether filled or not, on a date fixed by a published schedule; these, and not the size and speed of the ship are what distinguish the liner from the tramp the ship which

can be hired as a whole, by the voyage or the month, to load such cargo and to carry it between ports as the charterer may require.

1.2.2 Voyage charter

Under a voyage charter party, the ship owner agrees to charter the vessel to the charterer for one or more specified voyages. The vessel remains under the control of the ship owner who is responsible for equipping and manning the vessel. The charterer undertakes to provide the specified cargo and pays for the services either as a lump sum for the voyage, or in terms of the amount and type of cargo carried . The renumeration of the ship owner is a freight calculated according to the quantity of cargo loaded or carried or sometimes lump sum freight.

1.2.3 Time charter

Under a time charter party, the charterer hires the vessel for a specified period of time. As in a voyage charter, the ship owner retains the control of the ship and the employees on board the ship. However, the charterer is responsible for its deployment, the number of voyages it undertakes, and the destination of the voyages. The ship owner in a time charter party does not undertake to transport the goods to specified port(s) as in a voyage charter party. Under a time charter the ship owner is only responsible for nautical and technical operation of the ship whereas and the charterer (in fact the time charterer) is responsible for the commercial operation of the ship. It follows that under a time charter, the fixed cost of the ship are for the account of the owner and the variable cost are for the account of the time charterer.

1.3

Relationship between Charter party and Bill of Lading

1.3.1 Which is the governing contract of carriage - The Charter Party or the Bill of Lading?
Since the bill of lading is a receipt for the shipment of goods, it will come into operation once those goods have been shipped. However if the vessel has been chartered it will probably come into operation as a result of orders which have already been given by the charterer under the charter party. However since the Bill of Lading is also a contract of carriage of goods a potential conflict arises between the two contracts. It would be commercial nonsense for there to be two contracts between the same two parties for the carriage of the same goods on the same voyage. Accordingly the law has adopted a common sense approach and has held that when a bill of lading is held by a party who already has a charter party contract with the person who is the carrier under the bill of lading, the bill is to be treated as a receipt and a document of title-but not as a contract of carriage.

However once that Bill of Lading is endorsed to a party who is not a party to the charter party then in his hands ,the bill of lading operates not only as a receipt and a document of title but also as a contract of carriage between him and the carrier. Legal relations between ship owner and charterer are governed by their contract contained in the charter party. When a bill of lading is issued or is transferred to the owner or person entitled to possession of the cargo who is not the charterer, then it contains or evidences a separate contract between the ship owner and that other person.

1.3.2 Conflicting duties under the Charter Party and the Bill of Lading
Once the cargo has been shipped under a Chartered vessel it is clear that the ship owner can be a party to different contracts (the charter party and the bill of lading) with two different contracting parties (the charterer under the charter party and the consignee under the bill of lading). Therefore unless the two contracts are on back to back terms there is a potential for confusion and conflict. The issue of a bill of lading may seriously diminish the effectiveness of rights which the owner may have under the charter. However if a bill of lading has been issued in the meantime a withdrawal may be not much use to the ship owner since he completely separate obligations to the cargo owner under the bills of lading will continue These obligations include the duty to proceed to and deliver the cargo at the port specified in the bill of lading even though the bill of lading freight may already have been pre-paid to the charterer and even though no further hire will be payable under the time charter. Indeed the owner may even have to pay out of his own pocket port expenses, stevedoring charges and other costs which should have been for the time charterers account under the time charter if the charter had not been terminated by the withdrawal.

Voyage charter

Voyage charter is an engagement of a vessel for agreed voyage(s) between declared ports to transport full shipload of cargo or a certain quantity of cargo. The ship owner provides the vessel and her crew while the charterer supplies the cargo. The freight is paid on deadweight tonnage (DWT) basis or on lump sum basis. The ship owner provides for all the ships costs with its crew, expenses for fuel, water, canal dues, port dues, loading and discharging expenses etc. in return the charterer pays him the hire charges for carrying the cargo as described or utilised cargo capacity of the ship. Voyage charters provide for demurrage and dispatch payments if the time in port(s) exceeds, or is less than, lay time.

2.1

Forms of voyage charter

There are many forms of voyage charter that can be applied. They are:

Single voyage: the vessel(s) chartered for only a single voyage between

specified ports. After completion of unloading at port of destination, the charter party shall expire. o Round Voyage: the vessel(s) chartered to carry cargo in two-ways under the charter party. o Consecutive Voyage: this form can be either connective single or connective round voyage. The chartered vessel is used to carry cargo on connective single voyages or on round voyages. To introduce some flexibility and allow for changing circumstances the charter party may incorporate options in terms of loading and or discharge ports, quantities and other contract terms. o There is also lump sum charter in which the freight is calculated and paid on unit load or on the vessels cargo capacity basis (charter party does not specify name and quantity of cargo and form of charter which means charter freight is calculated and paid on unit of weight or another cargo unit).

2.2

Characteristic of voyage charter

High loading capacity, usually full shipload of cargo or nearly full (90%), with main items such as ore, coal, grains, In voyage charter, in addition to a bill of lading, two parties shall negotiate about transport conditions and freight rates to sign a voyage charter party. The bill of lading used in this case is called Charter party bill of lading which is of the same value as a receipt, a legal document complementary to the charter party but does not function as the bill of lading in liner charter. The charterer usually authorises a charter broker to search for a vessel, negotiating with the ship owner, bargaining over costs then signing the charter party. Voyage charter has some advantages and disadvantages as follows: Advantages: The voyage charter may give the charterer greater flexibility and control because the charterer could demand loading at any port(s) and easily change loading/discharging port(s). It may also be more economically advantageous because the charterer may have greater negotiating strength than an ordinary shipper. The charterer is free to negotiate every term in the charter party, not being forced to accept like in liner charter. Besides, charter freight is cheaper than liner charter ( usually 30% cheaper) Short transport time because the vessel departs straight from loading port(s) to discharging port(s) with hardly visiting transit port(s). Disadvantages: Complicated charter and contract-signing methods.

 Strong and usual fluctuations of freight rates require the charterer full understanding of the market, otherwise the charterer has to pay high charter freight or cannot charter.

Voyage charter party

This is a charter party for the carriage of a full cargo, not for a period of time, but at a stipulated rate per ton, for one voyage only, between named ports to be named on arrival in a given area. It is a frequently used charter party of which there are many varieties, and most commodities and trades have a particular type to suit their purposes

3.1

Standard charter party forms

The most well-known standard form for use with general cargo is GENCON C/P, approved by BIMCO - Baltic and International Marinetime Council. The form, despite revisions (in 1922 and 1976), was not comprehensive with the result that parties using GENCON regularly inserted additional clauses. BIMCO therefore produced an amended version of GENCON known as GENCON 1994. The 1994 version has introduced new clauses and has modified a number of clauses to reflect modern practice. . Other most frequently used general voyage charter agreements are: the Multi-Purpose Charter party 1982, MULTIFORM, published by FONASBA; the Tanker Voyage Charter party 1984, ASBA II, published by ASBA; the Tanker Voyage Charter party INTERTANKVOY 76 published by INTERTANKO. There are also other standard forms for use with specific cargo- for example, NORTHGRAIN 89 (North American grain charter party issued by the Association of Shipbrokers and Agents (USA Inc.) for use in the carriage of grain, OREVOY (the Baltic and International Maritime Conference standard ore charter party) for use in the carriage of ore, and FERTICON (Champer of Shipping Fertilizers charter) for use in the carriage of fertilizers. Using standard C/P forms makes it easier for charterers and shipowners to conduct business as only exceptions and additions are to be negotiated. The advantages of using such recommended charter parties: In common usage Convenient and widely available Expressed in wording that has often been legally tested in court fair to both parties.

3.2

Obligations of the owner and the charterer

The voyage charter party imposes obligations upon both the Owner and the Charterer:

3.2.1 The owners obligations

The Owner is obliged to set the ship agreed upon at the disposal at the time and place they agreed upon in the contract. The Owner, also, is obliged to keep the ship on its state along the period of the trip on trips and carrying out all what is necessary for implementing them. The Owner, also, is obliged to perform the trip agreed upon at the fixed time in the contract. At last, the Owner is obliged to stow the loaded goods, as he possesses both the technical control and the commercial one of the ship. He has also to preserve the goods along the trip concerned up to their delivery to the consignee.

3.2.2 The charterers obligations

The voyage charter party imposes two obligations upon the Charterer as follows: a. The obligation of charging and discharging the Goods: The Charterer is obliged to charge and discharge the goods at the time agreed upon in the contract. If the contract is void of texts about the periods, they are identified according to the conventional custom in the port of charge or discharge. If there is no custom in the port the case is referred to the public Maritime custom The established practice shows that the period of discharge is calculated separately from the period of charge. Therefore, if charge is completed before the end of the fixed period, the spare of days is not added to recompensate the demurrage days of discharge, unless they agreed on otherwise. But, the diligent Charterer may be gifted an award, for his diligence in performing either loading or unloading before the fixed time, upon an agreement. b. The obligation of paying the freight: The Charterer is obliged to pay the freight, as a fundamental obligation against the Owners obligation of setting the ship at the Charterers disposal. The relation between the payment of the freight and the performance of the trip or trips agreed upon a question about the effects of the wholly or partial abstention from performing the intended trip or trips. The answer to this question depends on different cases and how the law is interpreted.

3.3

List of charter party clauses

A voyage charter party usually contains a number of express terms. It is not possible to examine all the terms, since the wording of these terms varies from charter party to charter party. What is provided here is a list of terms which are likely to be found in most standard form charter parties. Place: the place where a contract is deemed to have may govern the law which is to be applied to that contract in the event of dispute. Thus if the place is London, English Law may be very likely prevail

Date: equally important the date to be shown is that, by fixture negotiations, are concluded with all subjects lifted - in other words, when all negotiating formalities are complete. Signature: No charter party is complete without the signatures of or on behalf of the parties concerned. Clause 1: The contracts subjects: are Ships Owner or carrier and charterer with clearly stated names, addresses of the contract parties. This clause also shows whether shipbrokers are employed. Clause 2: Vessel(s)/ Ship(s) Name of ship/vessel, flag, engines, class, register, arbitration, cargo capacity, position of the ship when the contract is negotiated are stated expressly in this clause, also substitute sister ship if the ship owner wishes to replace the ship and has to advise the charterer in advance; substitute ship must be equivalent to stipulated ship. It is usual for a ship owner to confirm that a vessel is in a suitable condition safely and properly to undertake the contractual voyage. Clause 3: Cargo This clause states clearly name, packing, characteristics of the cargo. Cargo descriptionCommodity and nature of the goods to be carried eg bulk or bagged stowage factor( eg about 55 cubic feet per tonne) Clause 4: Volume or Quantity of cargo The contract often stipulates quantity of cargo together with a tolerance, i.e. 5000 tons 10% more or less at Masters option. Clause 5: Lay days Lay days should be entered in the contract by two parties. Where the vessel does not arrive on time, the charterer reserves the right to cancel the contract. Clause 6: Loading/ Discharging port(s) The charter party must states expressly named loading/discharging port(s) ( one or more ports according to the charterers requirements of carriage. They are safe politically and seaworthy, being deep enough for the ship to be always afloat. Clause 7: Loading/ Discharging rates The speed at which cargo-handling activities are to be performed, agreed by two parties, based on the study of the productivity of port(s) for stipulation. Clause 8: Laytime. Laytime can be showed in fixed days/ hours. Based on laytime to stipulate demurrage/dispatch as follows: - If laytime exceeds allowed limits, the charterer has to pay demurrage to the ship owner. - If laytime is less than allowed limits, the charterer is paid dispatch money by the ship owner. Clause 9: Loading/Discharging costs: agreed by two parties according to one of these four ways: - Liner terms: loading/ discharging costs at ship owners account

- Free In FI: loading costs at ship owners account. - Free Out FO: discharging costs at ship owners account. - Free In and Out FIO: the ship owner is free of loading/ discharging costs. Clause 10: Freight rate: Contrary to liner charter, rate of freight in voyage charter is not set in the freight tariff but agreed by two parties on the basis of freight rate on voyage charter market. Rate of freight: is the freight calculated on freight unit. Freight unit can be either weight unit (metric ton, long ton, short ton) for deadweight cargo or measurement unit (m3 , cuft) for measurement cargo. Payment of freight: the parties could agree upon the payment of freight in one of the following three ways: - Freight Prepaid: the charterer is to pay freight rate in full after completion of loading or after signing the bill of lading a few days. - Freight to Collect: the freight is collected after the vessels arrival at discharging port. Partial freight prepaid, partial freight-to-collect Clause 11: Ships Gear A normal clause in dry cargo shipping specifying that a vessels gear will be maintained to a high standard and specifying what happens in the event of gear breakdown resulting in extra expense. Clause 12: Stevedore damage
The Charterers shall be responsible for damage (beyond ordinary wear and tear) to any part of the Vessel caused by Stevedores. Such damage shall be notified as soon as reasonably possible by the Master to the Charterers or their agents and to their Stevedores, failing which the Charterers shall not be held responsible. The Master shall endeavour to obtain the Stevedores written acknowledgement of liability. The Charterers are obliged to repair any stevedore damage prior to completion of the voyage, but must repair stevedore damage affecting the Vessels seaworthiness or class before the Vessel sails from the port where such damage was caused or found. All additional expenses incurred shall be for the account of the Charterers and any time lost shall be for the account of and shall be paid to the Owners by the Charterers at the demurrage rate.

Clause 13: Cargo Separation and Tallying Where a vessel is to carry various parcels of cargo, it may not be possible for al separations between individual parcels to be natural. The tallying (checking) of cargo as it is loaded or discharged is frequently an expensive operation and cargo claims can arise for alleged short delivery, bad condition etc. Clause 14: Dues and Taxes This clause specifies which party to the contract is responsible for taxes which may be levied against the vessel and/or her cargo and /or the freight.

 Clause 15: Bills of Lading The bill of lading to be presented to the Master or his/her agent upon completion of the loading. Master or his/her agent to sign the bill of lading indicating the apparent condition of the cargo. Clause 16: Strikes Both parties to a charter party have risks and liabilities in the event of a strike. Clause 17: Exception The rights of contracting parties to cancel the charter parties in case of events making its performance virtually impossible eg Force Majeure or Acts of God. Clause 18: Protecting Clauses A set of clauses commonly included in the printed form of a charter party or as additional clauses .This also includes P&I bunkering clause sets out owners rights to deviate for bunkers during the contractual voyage. Clause 19: Commission Specifies the amount and to whom commissions and brokerages are payable, usually adding that commissions/brokerages are payable on freight, deadfreight and demurrage. Clause 20: Ice Depending on the trade involved it may not be necessary for an ice clause to be included in a charter party, but where one is required, great care should be taken over its wording. Clause 21: War Risks War risks clauses should be examined in detail as some are unfair to ship owners, others to charterers and/or patently unsuitable for the purpose intended. A war risk clause should provide a ship owner with the right to refuse to allow his vessel and her crew to enter or to remain in an area which has become dangerous due to warlike activity.

3.4

Sample of voyage charter party

Two standard voyage charter party forms hereunder are presented in illustration for the above-mentioned clauses.

8. Different responsibilities of carriers and traders in transporting traded commodities.

Different responsibilities of carriers and traders in transporting traded commodities. Carriers Carrier: Any person who undertakes to perform the performance of transport by rail, road, air, sea, inland waterway or by a combination of such modes. Actual carrier: Any person to whom the performance of the carriage of the goods has been entrusted by the carrier Contracting carrier: A person who as a principal makes an agreement for carriage Trader: Exporters & Importers

Responsibility of Traders: Incoterm 2000 Group E (Departure) EXW Group F (Main carriage unpaid) FCA FAS FOB Group C (Main carriage paid) CFR CIF CPT CIP Group D(Arrival) DAF DES DEQ DDU DDP Responsibility of Traders Seller: Delivery the goods Buyer: Taking delivery of the goods when they have been delivered The risk of loss of or damage to the goods, as well as the obligation to bear the costs relating to the goods, passes from the seller to the buyer when the seller has fulfilled his obligation to deliver the goods Free Alongside Ship Seller: place the goods alongside the vessel at the named port of shipment; clear the goods for export Buyer: take delivery of the goods when they have been delivered => The buyer has to bear all costs and risks of loss of or damage to the goods from that moment Free On Board Seller: deliver the goods on board the vessel (passed the ships rail) at the named port of shipment, clear the goods for export Buyer: take delivery of the goods when they have been delivered => The buyer has to bear all costs and risks of loss of or damage to the goods from that point Cost and Freight Seller deliver the goods on board the vessel at the port of shipment clear the goods for export pay the costs and freight necessary to bring goods to the named port of destination Buyer: accept delivery of the goods when they have been delivered and receive them from the carrier at the named port of destination Cost Insurance and Freight Seller deliver the goods on board the vessel at the port of shipment clear the goods for export pay the costs and freight necessary to bring goods to the named port of destination contract for insurance and pay the insurance premium Buyer: accept delivery of the goods when they have been delivered and receive them from the carrier at the named port of destination Delivered Ex Ship Seller: place the goods at the disposal of the buyer on board the vessel not cleared for import at the named port of destination Buyer take delivery of the goods when they have been delivered clear the goods for import

 pay for all formalities and other charges upon import The seller has to bear all the costs and risks involved in bringing the goods to the named port of destination before discharging Delivered Ex Quay Seller: place the goods at the disposal of the buyer on the quay (wharf) not cleared for import at the named port of destination Buyer take delivery of the goods when they have been delivered clear the goods for import pay for all formalities and other charges upon import The seller has to bear all the costs and risks involved in bringing the goods to the named port of destination before discharging the goods on the quay Responsibility of the carriers for commodity transported by sea Concept: - Basis of Liability : 3 Responsibilities- 17 Exemptions - Period of Liability: Hague Rules & Hague-Visby Rules Hamburg Rules - Limit of Liability: Hague Rules1924 Value of goods 100 GBP / package or unit Hague-Visby Rules 1968 Hamburg Rules 1978 666.67 SDR / package or 835 SDR / package or unit or unit or 2 SDR / kg of gross 2.5 SDR / kg of gross weight of weight of the goods the goods

Rules - Hague rules - Hague-Visby rules - Hamburg rules Notice of loss or damage stipulated in sources of law Obvious loss The sources of law: Before or during delivery Hamburg Rules: Not later than the business day after the date of delivery Unobvious loss Hague Rules, Hague-Visby Rules: Within 3 days after delivery by the shipper Hamburg Rules: Within 15 days after delivery by the consignee Delay in delivery Hamburg Rules: Within 60 days after the goods are delivered Notice of damage or delay Damage Montreal - Montreal Protocol 4:Not later than 14 days Delay Montreal Protocol 4: Not later than 21 days

9. CONSOLIDATOR

10. The relationship between bills of Lading and Letter of Credit

A bill of lading and a letter of credit are completely different documents that serve unique purposes. These two documents are linked in that they are both commonly found in international trade transactions. Knowing the difference between a bill of lading and a letter of credit can help you to understand the import/export industry and the international trade process. 1. Bill of Lading
o

A bill of lading is a document listing and detailing all of the goods in a shipment of any kind, whether by land, sea or air. Sellers of goods print a bill of lading that details the product types, quantities, prices, weights and any other factors important to the distributor and the buyer. The seller then signs the bill of lading and attaches it to the shipment as it is passed off to the distributor, assuming the seller uses a third-party distributor.

The shipping company can use the bill of lading to double check that all goods are accounted for. Although shippers generally cannot check the contents of containers, like boxes or pallets, they can check the number and type of containers present in the shipment. When the buyer receives the shipment, an employee can use the bill of lading to ensure that all items on the bill are present in the shipment and to compare the list of shipped goods against the buyer's purchase records to ensure all purchased goods are included in the bill. The buyer can then use the bill of lading as an official receipt for the transaction. 2. Letter of Credit o A letter of credit is essentially a promise made by one bank to another that the first bank's customer can be relied upon to pay for goods after they have been received. In practice, a buyer from one country asks his bank to send a letter of credit to the seller's bank in another country. This assures the seller that he can ship the goods to the buyer with a measure of financial security, since the letter of credit requires the buyer's bank to cover the payment if the buyer defaults. This is a form of private industry regulation. Since there is no international authority with the power to enforce trade rules across countries, the banking industry relies on letters of credit to provide protection to international businesses.

Correlation
o

Letters of credit and bills of lading represent two distinct steps in a single process. After making a deal for an international transaction involving a physical shipment, the buyer initiates a letter of credit. Once the seller's bank accepts the letter, the seller can draft a bill of lading and ship the goods.

Process

Companies create bills of lading themselves, either by creating them from scratch or using a template packaged with an office productivity software package. Bills of lading can take a wide range of forms, as long as all relevant information is included.

Letters of credit are drafted and sent by the buyer's bank. The purchaser in the transaction must simply contact the bank, request a letter of credit be initiated and provide information about the transaction, the seller and the seller's bank. When transport documents are tendered under a documentary credit the bank will scrutinise them to ensure they comply with the terms of the letter of credit. The bank owes a duty to its customer to refuse documents which do not strictly conform, and the beneficiary of the credit must comply with the terms of his contract with the issuing banker. Every international movement requires a master transport document. This is the document issued by the actual carrier. The actual carrier in this context would be the shipping line, the airline, the road haulier or the rail service. This could extend to include the carriers appointed agent or representative but, as discussed below, it would usually not describe (for example) a freight forwarder. The master transport document will serve a variety of functions amongst which will be its role as a record of the terms and conditions of carriage or as a reference to a set of such terms that will be applied in the relationship between the shipper and the carrier. When the buyer and seller are working without a freight forwarder (or a cargo consolidator), then the carrier issues the master transport document directly to the shipper. However note that under certain conditions even when the seller is working with a freight forwarder the carriers document may show the seller, and not the freight forwarder, as the shipper. In such cases, the freight forwarder is most probably acting in the capacity of agent for the seller. But, it is more often the case that a freight forwarder acts as a principal and the carrier issues the master transport document to the freight forwarder directly, with the freight forwarder shown as the shipper on that master document. The freight forwarder in turn issues their own house transport document to the actual sellers, who will be shown on them as the shipper. The use of house documents issued under the umbrella of a large Master Document allows freight forwarders to buy bulk space for x (on the Master document) and sell it off in smaller units to traders for y (on the House document.) This arrangement is central to running a seafreight groupage or airfreight consolidation service. In this entry, you will note the change of name as the seller becomes the shipper and you may wish to refer to the entry for Seller for more on this topic. Essentially, the name seller only applies in the sales contract, whereas the shipper enters into a contract with the carrier, which is independent of the sales contract the name change serving to emphasis this independence. Equally, a difference exists between a buyer and a consignee and this is covered under the entry for buyer..."

11. DOOR TO DOOR SERVICE

Through transport or shipping arrangement to ensuredirect flow of goods from the exporter to the importer (or from the point-of-origin to the point-of-sale) with aminimum of interruption and delay. Also called house to house service.

Benefits For shippers:+ simplify logistic management. It provides a one-shop solution for delivering goods to virtually anywhere in the world. + reduce costs. The commissions paid once with all-inclusive rates (pickup, customs clearance and delivery). + Minimize the risk of loss or product damage. + Reduce the transit time of the product => Save time and money. For national economy: Savings in costs of exports and make them more competitive in the international market. Vietnams situation: Actual situation large quantity, not quality 51% of companies work as agencies in the chain Reasons Law system: Law of models of transportation, many other kinds of official documents. Still have drawbacks Infrastructure: Transportation system. Ports, warehouses Logistics companies: Capital, Associations, Experience

12. LOGISTICS
Logistics refer to the physical flow of raw materials, semi-finished products and finished products along the supply chain, as well as all the flow of information and funds that support the physical flow. It interlinks all the sectors along the supply chain, such as raw material supply, manufacturing, distribution and retailing. Although logistics advanced in the 1950s, the efficient logistics began to arise and spread in the 1970s and accelerated in 1990s. Today logistic is the main facilitator of trade: Use all transport modes to the full of their potential Provide direct link between production and markets, with increased efficiency and contained costs (this requires quality of services, which are not always a given) Enlarge the commercial horizon of manufacturers, making far away markets accessible to more and more SMEs Provide a practical single window for customers, including transport, storage, payments, Customs and other regulatory compliance Transport costs have gone down in the last 25 year from over 13-14% of delivered goods to 5-7% or less. For all benefits above, together with the expansion of globalization and regionalization, logistics development and rationalization are still moving toward to meet the sophistication of the industry and the rapidly growing demand for a specialized supply chain management services. According to the official statistics, the logistics industry is expected to grow at an annual rate of 3-10%, which is valued at US$320 billion. This expectation is a strong stimulus for those countries to develop their logistics industry and position themselves as a regional logistics hub to gain from the enormous growth in demand. Competition has been particularly tense in the Asia where many countries have launched new initiatives to position their economy as the leading logistics hub in the region. Among these countries, Vietnam, exportoriented country, is no exception. With the stable economic growth at 6.5 percent which is the second highest in the region, next only to that of China, and the some vital geographic position, Vietnam is considered much more than potentials for the development of logistics services. Although it is no doubt Vietnam government has exerted to optimize some current

resources to facilitate the growth of logistics sector, unfortunately, some major constraints in logistics infrastructure, administrative procedure and human resources make logistics rationalization in Vietnam less developed than expectation in comparison with some regional countries likes China, and Thailand. Thus, this paper will emphasize to study what the main constraints to the growth of logistics sector are and then use China recent logistics development as a case study to draw some implications or lessons for Vietnam logistics rationalization. There is a wide acceptance that Southeast Asia and especially Vietnam have a great economic potential for the development of logistics services. First of all, Vietnam can take an advantage of a vital geographical position. To make it clearer, Vietnam is located in the China South Sea, giving the country access to the main inter-Asian shipping routes, as well as access to the developing land transport links with the rest of ASEAN countries. According to the research of some Western countries, the volume of goods which is transported through shipping routes can exceed 1 tonnage of goods. That reason allows the country scope to develop its trade logistics. Secondly, Vietnams membership of the World Trade Organization since 2007, and Vietnams cheap labor are considered two driving forces for the development of Vietnams logistics and distribution systems. Actually, Vietnams membership of the WTO has increased both its international trade and inwards investment. In addition to Vietnams cheap labor that is the key factor leading to the cheap domestics logistics cost, many multinational groups have chosen to set up their manufacturing factories there, making Vietnam become a world factory of a sizable portion of product. Among these companies, they have adopted supply chain improvement techniques, such as JIT, Lean manufacturing and some inventory reduction practices, requiring them to deliver small shipment on a more frequent basis. In order to move that kind of shipment, these companies encounter rising freight costs and deteriorating services, so urging the application of modern logistics industry in Vietnam. As a result, it attracts a huge investment flow into supply chain services. Moreover, Vietnams current economic growth in the 3 year period at more 7 percents has created a larger local market that in turn gives impulse to the development of distribution systems. Last but not least, after WTO accession in 2007, Vietnam political mechanism has changed so as to boost our sustainable economic growth. The economy is rapidly moving from planned one to market-oriented one with several key developments in policies such as, availability of investment in private sector, to boost foreigner investor confidence. With our geographic advantage and our changes in economic mechanism, Vietnam is actually an attracted destination for foreign investment in box shipping sector. Actually, even though Vietnam has some advantages in the development of logistics industry, Vietnam logistics industry cannot be developed as rapidly as some countries like Thailand or China because of several challenges that delay its development and even make supply chain service less competitive and less efficient than it can be. In 2007, the World Bank launched its Logistics Performance Index (LPI), intended as 'the first in-depth cross-country assessment of the logistics gap among countries'. The LPI was calculated on a five-point scale and based on survey responses from over 800 logistics professionals. In the 2007 survey, Vietnam was ranked 53rd in the world with an LPI score of 2.9. In comparison with other Asian economies, Singapore was the world number one with an LPI score of 4.2, followed by Australia (17th, LPI of 3.8) and Taiwan (21st, LPI of 3.6). Then came South Korea (25th, LPI of 3.5), Malaysia (27th, LPI of 3.5), China (30th, LPI of 3.3), Thailand (31st, LPI of 3.3) and Indonesia (43rd, LPI of 3.0). Weaker areas which are also considered in this analysis in descending order were technology competence, logistics competence including human resources, and infrastructure. Firstly, transportation infrastructure is considered one of the biggest challenges which prevent multinational corporations to apply standard approaches to supply chain management.

The first element that contributes to the weakness of transportation system is port infrastructure. Since the literature suggests carriers view ships time at ports as an expensive activity, the speed of container handling and consequent vessel turnaround time is a crucial issue in terms of competitiveness for port authorities and port operators (Peters, 2001). Therefore, the level of efficiency can represent how quickly containers are handled and how quickly vessels are turned around at ports. In reality, the higher the efficiency level of a port or terminal operation, the more port users are likely to choose it as their destination of call, which, in turn, will make the port gain more market shares and improve the rationalization of logistics activities. However, in Vietnam situation where many ports in the Vietnam Port System are very old and out-of-date, it can be considered a constraint of competitiveness because it does not increase, but slow down overall speed for handling. In addition, ports are shallow in draft and their yard and warehousing systems are insufficient for accommodating containers and cargo. Today there are only a few ports with modern handling facilities and equipment to serve big ships. Thus, the speed of loading or discharging goods in Vietnam is very comparative lower than this of regional countries. Moreover, lack of deepwater access in navigation channels and port basins added to the small amount of throughput prevents Vietnam ports from being transshipment center, since many shipping companies intend to increase the size of their container ships from Panamax to Post-Panamax to accommodate trade growth and to offer economies of scale in a highly competitive market. In the logistics process, ships loaded and discharged their cargoes in towns or cities where producers and consumers are located. In others word, pre-export and post-import legs for door-to door shipments require land transport. However, land transport infrastructure in Vietnam has not developed as enough as it can to meet requirements for the development of logistics services. Compared with the nations vast land size, dense population, and the fast growing transport demand, the total expressway mileage in Vietnam, giving the existing 16000km expressway is not sufficient, only 13.5% of the road networks are considered to be in good condition, only 26% have two or more lanes and only 29% are tarred. Moreover, roads in Vietnam are not only limited in quantity, but bad in quality resulting in the traffic congestion which leads to the increase in overall speed of delivery. Moreover, traditionally low investment in rail; although attempts are being made to rectify this, the potential of rail for cost-effective bulk freight is being under-utilized. Although Vietnam's government has invested a huge amount of money in order to develop its inland transport system, infrastructure investment is not sufficient to keep pace with the demand for the transport, and even account of the small slices of money that needs to promote the current state of inland network. Consequently, until now land transportation remain a bottleneck. Another factor that needs to take into account is a linkage between Vietnam inland transport system and its port one. There is a wide-spread acceptance that inland transport and port systems are highly correlated because efficiency of inland transport to serve an increasing and most often disputed hinterland has become a critical factor of ports potential future as well as of their overall trade growth prospects. Furthermore, since ports have become a prominent node in integrated logistics chains, quick and safe access to port facilities from an inland transport system becomes a basic requirement for users to evaluate their port selection options. However, the lack of an adequate road system to access to port basins has considered a hindrance to logistics providers as well as exporter/importer and then delayed the development of logistics services in Vietnam. Secondly, while tangible transport infrastructure challenges within Vietnam's markets often get the most press and visibility, it is still the intangible items that can delay the development of logistics in Vietnam. Besides factors in working locations, distant time zones, handoffs of products and associated information, different national holidays, language and cultural barriers, there is the list of intangibles items that sometimes carry hidden costs

not fully grasped by companies entering an emerging market. It included all the tariffs, duties, taxes, customs declarations processes, security and compliance requirements, and the daunting task of dealing with government agencies and multiple third parties in a foreign language. Among these factors, corruption is one of the factors that create the greatest headaches for global logistics managers. According to the report of World Economic Forum, corruption index in Vietnam is higher than many regional countries, even Laos. Multinational companies have complained that their operation cost has increased at least 20 percent just because of corruption. In spite of the regulatory changes for preparation to WTO accession, Vietnam political mechanism is too weak to protect foreign investors from adverse effects of corruption. The weakness in technology is also considered a constraint for logistics development. Recently, information and communication technologies, and especially web-based technologies are becoming critical as virtual infrastructure that supports freight operations on physical infrastructure. Besides some tradition ICT application that is highly relied on email, phone, and facsimile, the recent take-up of multi-applications, such as portal technologies, hosted software as a service application (SaaS), public user booking systems, public user track and trace systems, e-markets and even common Radio Frequency Identification (RFID) scan storage systems has been limited. The move towards these technologies should deliver a critical improvement in the efficiency of the freight and logistics industry. In addition to changes in the freight and logistics industry enabled by ICT development, significant changes are also occurring due to the uptake of ICT by others in the logistics system. For example, improvements in inventory control, warehouse management and ordering mean that just-in-time logistic is now thought of in terms of single freight items rather than pallets or containers. This approach affects freight transport in many ways, including the types of vehicles used, frequency of delivery and delivery lead times. These recent applications in logistics industry actually provided a strong momentum for its development, but unfortunately, most Vietnam enterprises did not apply these technologies into their business, leading to the lack of high value-added services provided by logistics providers, even track and trace services that are a type of shipment status or informationsharing system accessible through Web sites. However, we need to recognize that one part of this problem maybe comes from the modern technology's insufficiency in Vietnam. Last but not least, based on the research of Ministry of Transport, the big constraint that slows down the development of logistics industry is the lack of co-operation among many small or medium-scale domestic logistics providers and the lack of human resources. The word logistics is no longer a new phenomenon in Vietnam. In reality, logistics market has more than 800 provider companies, but many of them are small or medium-scale companies that cannot meet a capital requirement to bring powerful logistics strategy capacity into full play. Unfortunately, we rarely find out the co-operation between Vietnamese logistics providers, which lead to the weakness of logistics industry in Vietnam. As a result, without co-operation, the logistics companies cannot compete with the evasion of international providers after becoming WTO membership in 2007, and so they just provide some part of supply chain management such as warehousing, and transport hiring. Besides the lack of the co-operation and capital requirements, insufficient human resources led many Vietnamese companies not operate the whole logistics process. Actually, hundreds of students who can work in the logistics sector have graduated every year, but the hunt of good-qualified logistics managers is not easy because of two reasons below. In one hand, Vietnam has not any university or faculties, which is specialized in this kind of training. In other hands, the Vietnamese curriculum study does not keep pace with the advancement of logistics knowledge in the world. In reality, because of the lack of co-operation and human resources,

Vietnam logistics industry cannot be developed as possible as it can and just get a small slice of domestic pie. To become international logistics hub, Vietnam government must promulgate some policies or synchronous solutions on aspects of logistics industry to reduce our disadvantages and even translate our disadvantages into profits. Before giving some recommendation for the logistics development, we need to consider another country logistics development strategy to draw lessons for Vietnam. In the limit of this paper, I will choose the Chinese tactics to provide reference lessons for the logistics development in Vietnam for several reasons: (1) Vietnam and China have both been through periods of centrally-planned economic development in which the logistics infrastructure and distribution networks were weak and centrally managed by the Government and (2) Vietnam and China have recently joined the World Trade Organization. In order to give impulse to the development of this kind of distribution industry, the Chinese regulations of logistics operation have changed before and after WTO accession in 2001. In the past, foreign investors were just encouraged to make investment in storage and logistics center operations, and the remaining ones are highly protected by the Government. However, after joining the WTO, in order to take advantage of the development of logistics, China has loosened its policies of logistics protection. This allows foreign logistics service providers to take part further in logistics services. For example in the field of logistics transportation, foreign companies were allowed to set up their own companies in four-year period after Chinas joining the WTO; that was impossible previously, before China had joined the WTO. Moreover, like Vietnam, the logistics infrastructure in China was considered a constraint to the development of logistics industry because having a lot of limitations in comparison with its economical development in general and its logistics development in particular. However, realizing that, Chinese Government has highly prioritized the development of logistics infrastructure in eleventh five-year plan (2006 2010). Instead of the only contribution on infrastructure made by Chinese government, Chinas determination to develop logistics infrastructure is shown by its encouragement of a number of capable private companies to join in the building of logistics infrastructure. Local and foreign logistics services providers have seen Chinas poor logistics infrastructure as an opportunity to join in building the infrastructure. Lets take Yangshans deep water port project as an example. Yangshans deep water port, which is a group of container ports with the capacity to receive ships of over 8,000 tonnages, has seen investment of a record amount of 50 billion dollars. These ports are to be complete by 2020 and will be the largest port in the world. This project has attracted not only local investors such as Shanghai International Port Group, COSCO and China Shipping Group but also foreign investors such as PSA (the first raking investor in container port), AP Moller Maersk, Hutchison Whampoa and OOCL. After making it free for foreign investment in logistics system, China has attracted large investments from international groups of shipping, express delivery, freight forwarding and logistics services. By the end of 2007, the total investment capital for Chinas logistics infrastructure reached about 160 billion dollars, an increase of 18.8% compared to 2006. Of the investment capital, 124 billion dollars are for transportation, an increase of 13% and taking 76% of the total investment capital for logistics infrastructure. These investments which are a result of changes in investment regulation actually provide a strong momentum for logistics development. The last lesson that we can learn from Chinese logistics development strategy is its effort to increase more logistics providers to join China market so as to take advantage of their experiences and resources. Despite a huge amount of investments in China logistics system, the variety of these businesses which has been shown with the leading international ones like DHL/Exel, Kuenhe&Nagel, Panalpina and small ones with one delivery truck and one store, together with the Chinese Government, have invested into the logistics human resources to

meet the developmental needs of the logistics industry. Besides, in order to apply new technology practices in some aspects of logistics services, these companies has also gone along with Chinese government to develop its current technological system. In short, the lesson that can be drawn from China logistics development is its change in regulation for providing attractive destination for foreign investor, and then leading to several promising opportunities in a range of aspects of logistics industry from the development of infrastructure to the improvement of human resources. Even though a comparison can be made in terms of the scales of logistics operations in Vietnam and China, the development of logistics industry in China can still contribute with valuable references for Vietnams logistics industry: 1. China has chosen a number of logistics sectors like storage and logistics centers which can enhance the function of infrastructure to encourage investment. Vietnams logistics industry can learn from this to upgrade rapidly its logistics infrastructure. At present, the decree 140/2007/N-CP has regulations, which limit the participation of foreign companies in storage services. Foreign companies are only allowed to operate storage services in the form of joint-ventures with less-than 51 per cent investment capital (this limitation will be annulled in 2014). In addition, of the regulations on logistics operations in Vietnam, there are currently no documents or policies to encourage the establishment of logistics centers. Drawing from Chinese lessons, Vietnam government needs to lose its regulation on foreign investments in the logistics sector, allowing them set up their own business to brings all logistics capacity into full action. 2. In the field of logistics infrastructure, Vietnams Government should encourage private and foreign businesses to take part. According to the Transportation Ministrys strategy of developing transportation infrastructure until 2020, the necessary capital from the Government will take about 2,3% of GDP, but the minimal funding needs must be from 3 to 3,5% of GDP. The compensating capital can be raised from private and foreign investors. The point is that the Government should create conditions, which are concrete and attractive to these investors. Not only can they make up for the shortage of investment capital but also contribute with management skills, information technology and experience for effectively building up the infrastructure. However, almost current Vietnam's decree has limited private sector from investing into logistics infrastructure, but based on China lessons and real circumstances in Vietnam, in the next 5 year. Vietnam government needs to foster good partnership between government and private sector. Although it is no doubt the government sector is important for the formulation and implementation of appropriate policies, the private sector is in need to carry out and translate the overall policy direction into action. Thus, a good partnership between the government and the private sector is an important ingredient to the success of a logistics hub strategy. Again, based on Chinas experience, the government of Vietnam needs to be pro-active and supportive to the logistics providers in aspects of infrastructure development by providing incentives or financial supports. 3. Learning from China, Vietnam has recognized the significance of having more and more powerful, professional logistics providers from every part of the world. . Not only can they make up for the shortage of investment capital but also contribute with management skills, information technology and experience for effectively developing logistics industry. As I considered above, the shortage of pro human resources in the logistics sector is delaying the development of this kind of productive services in Vietnam. However, with the help of many logistics businesses, Vietnam universities have been urged to develop their logistics course to meet social demands. Moreover, the experiences of these companies over hundreds of years working in the logistics sector can be a good reference for Vietnam government to promote and improve the quality of its logistics courses.

4. All above recommendations tried to solve and encourage the development of the tangible and visible problem, but some intangible ones can deteriorate all Vietnam concerted effort to promote its development. Vietnam authorities must improve the consistency and transparency in government policy towards the industry, because foreign investors need to have a sense of security from consistent and predictable policies since their investment is usually bulky and requires a long gestation period. Moreover, according to the complaint of some foreign investors, corruption accounts for at least 15 percentages of their operation costs annually. Thats why clean government with efficient and simplified administrative processes can be not only a unique feature, which made the country attractive as a base for multinational corporations regional and global operations, but a main area that has the powerful impact on the success of logistics development strategies.