Logistics Services? Roles, Classification And Characteristics ​

1. What is a logistics service?

The logistics sector is defined as follows under Article 233 of the Vietnamese Commercial Law of 2005: Commercial operations known as logistics services are those in which traders plan the execution of one or more tasks, such as:

• Customer advisor
• Packing
• Put the code in writing.
• Obtain products from clients
• Transport, store, or otherwise handle
• Complete the necessary customs procedures.
• Get additional paperwork ready.
• Additional goods-related services that are agreed upon and paid for by the client.

The logistics industry is described by international law as follows: logistics is the process of organizing, carrying out, and managing every activity associated with the supply chain, such as procedures, storage, and transportation. distribution of goods and customs to guarantee that client needs are satisfied.

2. In what circumstances can a logistics service business operate?

In addition to asking what logistics services are, many companies also want to know what prerequisites exist for providing these services. We shall split this subject into two categories: domestic investment and overseas investment.

Domestic investment:

• Decision 27/2018/QD-TTg states that an entity that wants to provide logistics services must register its establishment with the industry code 52292.
• In accordance with Decree 163/2017/ND-CP, Article 4. According to the law, anyone offering logistics services has to fulfill all investment and commercial requirements.
• Logistics professionals will need to do all or most of their business using electronic devices linked to the internet, 4G networks, etc. Therefore, they have to pay attention to and abide by e-commerce legislation in addition to following the law's regulations for certain services.

Foreign investment: The development and operation of logistics service enterprises are subject to certain rules. Here are a few essential requirements.

• Shipping:
  • Shipping firms are free to start a business, invest money in it, or purchase stock.
  • They are allowed to form corporations and purchase stock in enterprises that run fleets of ships flying the Vietnamese flag. Specifically, foreign investors' capital contribution ratio cannot be more than 49%.
  • The proportion of foreign crew members on these businesses' ships flying the Vietnamese flag cannot exceed ⅓ of the ship's quota. Furthermore, the first mate/captain needs to be a citizen of Vietnam.
• Container loading and unloading services:
  • Businesses need to be founded, provide funding, or purchase stock.
  • Foreign investors' capital contribution ratio cannot be higher than 50%.
• Customs clearance service:
  • Companies must be founded, provide funding, or purchase stock. include funds given by citizens of the country.
  • Contracts for business cooperation permit foreign investors to establish a commercial presence.
• Inland waterway/railway freight transport services:
  • Businesses need to be founded, provide funding, or purchase stock.
  • Foreign investors' capital contribution ratio cannot be higher than 49%.
• Road freight transport services:
  • Doing business through agreements for business cooperation or starting a company, investing money, or purchasing stock.
  • Foreign investors' capital contribution ratio cannot be higher than 51%, and all drivers must be nationals of Vietnam.
  • Technical analysis and inspection services:
  • Implemented as a business with a capital contribution from local investors after three years or, after five years, a foreign investor's unrestricted capital contribution.
  • Not permitted to offer certification and inspection services for transportation vehicles.
  • For reasons related to national security and defense, responsible authorities may restrict the performance of technical analysis and inspection services in certain locations.

3. Fundamental operations in the logistics industry

There is a lot of work to be done in the logistics industry. The following are the seven fundamental tasks that each company running a logistics service must complete:

3.1. Perform the loading and unloading of merchandise

The service provider will load the goods onto vehicles like trucks, trains, ships, airplanes, containers, etc. The loading and unloading procedure starts as soon as the vehicle reaches the reception spot. After being unloaded, goods can be carried into the warehouse for preservation and storage. The process of loading and unloading can be carried out with the use of support machinery such forklifts, robots, cranes, or machines.

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3.2. Services connected to storage

Meeting client expectations from the time items arrive until after the shopping experience is mostly dependent on warehousing. The warehouse takes a number of actions to guarantee client satisfaction:

• Production and packaging:
  • Produce goods in accordance with the standards and order amounts.
  • To guarantee product safety throughout storage and transit, packaging is done with great care. This could involve strapping bales, boxes, pallets, or the final product.
• Storage and quality management:
  • Organize and store your belongings safely.
  • Maintain strict inventory control to provide prompt customer service.
  • Control of quality to lower the possibility of product harm.
  • To maintain a seamless supply chain, conduct routine inspections.

• Coordination of import and export goods:
  • Get precise information so that you can plan and schedule the import and export of commodities.
  • Prevent delays, protect your company's reputation, and satisfy your clients.
• Feedback and problem solving:
  • Take note of and reply to customer comments.
    • Resolve complaints about incorrect product codes, missing quantities, or damage as soon as possible.
    • Provide the best recommendations for resolving issues and keeping your good reputation with clients.

3.3. Transport

Goods will be shipped to any address you choose, both domestically and abroad. The provider will set up the best mode of transportation based on the volume of orders and the specifications of the product. You can also ask to employ a certain mode of transportation, based on your need or preference. But each service provider partner's shipping infrastructure might have limitations on this.

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3.4. Declaration of customs

This is a very intricate and sophisticated aspect of logistics services. due to the fact that it entails paperwork and formalities including declaration, legitimate proof of shipment, and inspection in compliance with national regulations.

Typically, you'll require assistance from a second party, a logistics service provider. They will assume accountability for these intricate processes, sparing you time and energy while guaranteeing that all takes place in compliance with the laws and norms of the participating nations. For assistance in finding a trustworthy company offering customs brokerage service, call Dolphin Sea Air at 0987897062.

3.5. Get in touch to reserve a boat

You are free to select the mode of transportation for your goods, and the supplier will assist you in locating the goods precisely on the train or in the vehicle. In a similar vein, the system will initiate an automatic connection to arrange for the receipt of items upon their arrival at their destination. This will guarantee that your merchandise is not misplaced while being transported.

3.6. Import clearance of customs

Orders for imports typically require this task. Notifying customs of the arrival of goods at the border gate is the first step. Documents include sales invoices, business contracts, packing slips, transport codes, certificates of origin, and numerous more documents are required throughout the customs clearing process. The products will be cleared and sent to the warehouse following the verification and qualification of all paperwork.

3.7. Delivery

The logistics unit's delivery section will handle transporting the goods to the buyer after they have been assembled at the destination warehouse. The carrier will get in touch with the customer in advance to set up the delivery procedure based on shipping details.

4. Categorization of current market logistics services

There are many various kinds of logistics services available today, each with a unique function and way of handling and moving cargo. Some of the most widely used categories are shown below.

4.1. Storage solutions

This service includes managing storage operations and renting out warehouse space to accommodate the storage of commodities. Additionally, it entails the provision of production warehouses, where tasks like the handling of raw materials, packaging, labeling, grading, and other operations are completed.

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4.2. Services for loading and unloading

This service handles the task of loading and unloading containers in addition to organizing and positioning goods. It does not, however, include the services offered at the airport.

4.3. Consultancy services for logistics

Companies that specialize in manufacturing goods frequently turn to logistics consulting groups for assistance and guidance. Optimizing logistics procedures will help them run more reliably and effectively by enhancing performance, cutting expenses, and improving performance.

4.4. Services for supply chain management

This service's goal is to oversee the whole supply chain, from the point of manufacturing to the point at which the products are delivered to the customer. Planning, observing, and streamlining the complete supply chain are crucial tasks.

4.5. Services for customs and document processing

This service covers managing import and export documentation as well as customs procedures. Ensuring thorough implementation and adherence to all entry and exit restrictions is the aim.

4.6. Transportation services for logistics

This is a forwarder, or freight forwarding service. Popular logistical transportation techniques at the moment include:

• The most common kind of logistics services is road transport, which includes transferring goods by trucks, buses, containers, and other forms of on-road transportation. Long-distance (traveling over large distances) and intra-city (traveling within cities) transportation are two categories into which this service falls.
• Rail transport service: Moving cargo containers using the rail network; frequently used for big, heavy, and bulky goods.
• Sea transport services include the use of gas tankers, oil tankers, container ships, and ocean liners. Goods can be shipped across the seas from there.
• Air transport services: Using airplanes to move cargo; frequently utilized for long-distance and urgent deliveries.
• Multi-modal transport services: When numerous vehicles and modes of transportation are used to satisfy the demands of an intricate logistics network. Particularly when the route from the starting point to the destination is longer than the traffic infrastructure can handle.
• Delivering goods from the final distribution center to the customer's designated address is known as the final transportation service. Customers typically receive further guidance along with this service.

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5. What qualities distinguish logistics services?

5.1. Qualities of content in transportation services

When it comes to development, logistics services are more sophisticated and all-inclusive than services linked to goods, such shipping, packing, freight forwarding, warehousing, and storage. Individual services like ship chartering, commodities packaging, and many more can be offered by logistics service companies. Alternatively, they might offer a full range of services, from the point of manufacturing to the final customer.

Rather than being a single service, logistics services are a continuous chain operation. In order to guarantee continuous flow of goods and prevent time lost on inventory, movement, operations, and waiting, each link in the chain is arranged in accordance with a comprehensive plan.

In order to save money and time, logistics service providers complete tasks in a chain that is reasonably ordered. Every stage of the process, including receiving the goods from the sender, packaging, labeling, shipping, warehousing, and storing them, is well-organized. Logistics companies handle customs procedures, produce documentation for export or import, and guarantee that items are preserved in accordance with customer agreements.

5.2. Qualities of organizations offering logistical services

Customers and traders who offer logistics services make up the two primary subjects of logistics services. Dealers offering services for logistics:

• Provide expert services while adhering to all safety and technical requirements.
• Assemble the facilities, tools, and equipment required to complete the logistics chain's stages.
• Employ enough people to fulfill quality standards.
• capable of handling any or all of the logistics chain's phases.
• Create a logistical network using your own assets and technological know-how, or work with partners.

Client:

• Those who require the usage of logistics services in order to transport products.
• They could be people or entities.
• Alternatively, the client may be the product's owner or a representative designated by the owner to oversee and deliver the product.
• To use the service and execute a contract, get in touch with retailers offering logistics services.
• Be a part of the supply networks that retailers have established.

5.3. Qualities of the logistics services' nature

The production and business operations of businesses heavily rely on the logistics services sector. It assists in the preparation of raw materials, manufacture, and delivery of the finished product to the customer. Efficient delivery of items to their intended location with less risk at a lesser cost than handling the task oneself is the primary objective.

Global production and commercial processes have changed as a result of the growth of logistics services. Developed nations relocate industry hubs to poor nations in order to capitalize on inexpensive resources. Nations like Vietnam, Thailand, India, and China are now considered to be worldwide "factories". Logistics services assist in lowering transportation expenses, giving companies a chance to capitalize on their competitive edge.

Business traders fulfill client demands, offer supply chain services, and are paid for their efforts in the logistics industry. Additionally, they receive payment for any expenses they spend in carrying out the customer's orders or defending their rights.

6. Some other relevant logistics services to be aware o

Numerous auxiliary services pertaining to various logistics domains exist in addition to the standard logistics services that we are all familiar with. To meet the various needs of customers, supplier units construct them. Among the well-liked services are:

• Monitor and control shipping data
• Take receipt of and handle expired or returned items.
• Make sure supply chain efficiency by keeping a careful eye on inventory.
• Offering services for renting out warehouses or containers
• Offering customers personal selling services via online shopping carts. All data will be forwarded to the logistics unit for execution upon receipt of the order.
• Advice regarding import and export regulations

These customized, adaptable logistics services are appropriate for a variety of industries. The success of the export and import processes depends on these services. Consulting services in this area are especially crucial for manufacturing companies without a logistics department or whose department is underperforming. You can succeed and operate at a high level in your foreign business by utilizing these services.

7. The current function of logistics services

Not only is logistics crucial to the success of businesses in the competitive and complex business climate of today, but it also plays a major role in the economy. It is demonstrated in particular in the following ways:

7.1.  For companies 

Developed logistics services lower costs and enhance product quality while assisting businesses in maintaining production and company operations. In this manner:

• In order to increase management effectiveness and lower production costs, logistics services are crucial. It increases the ability of enterprises to compete in the market in this way. Logistics enables management to exercise control and make precise decisions on the sources of raw materials, as well as when and how much to add, which helps to streamline production and cut expenses.
• Services for logistics aid in cutting expenses associated with distribution and circulation. Commodity prices on the market are largely determined by the cost of circulating items, particularly transportation expenses. The growth of logistics services lowers other incurred costs, including those related to transportation.
• The business value of transportation and forwarding companies is increased by logistics services. Given the diversity of products and the global marketplaces, this is particularly significant. The logistics services of today offer extensive, varied services in addition to basic ones. With the support of comprehensive logistics service providers, transport and forwarding companies have evolved into time-saving, production-boosting, and business-efficient enterprises. thereby strengthening one's position as a market competitor.

7.2.  For the economy

Additionally, logistics play a number of significant roles in the national economy, including:

• With logistics services making up 10% to 15% of GDP in the majority of developed nations, they play a significant role in enhancing socioeconomic performance. It creates a network of interconnected links and has a favorable effect on the manufacturing, transportation, and distribution of goods.
• In the context of globalization, logistics services support the improvement of nations' and economies' competitiveness. In the current era of intensifying international competitiveness, logistics becomes a critical differentiator. It facilitates the flow of financial transactions and is crucial to the economy's robust growth. Resources are transformed into goods via the logistics chain, adding value for both producers and consumers while satisfying the many demands of society.

It is hoped that the details provided by Dolphin Sea Air have clarified the meaning of logistics services and increased your knowledge of the industry. Visit our website to learn more if you're interested in learning more!

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