A modern business trend

19/05/2011

Using outsourcing in logistics

A modern model which helps many enterprises to be successful now is using outsourcing.

Outsourcing’s rule is: “Reserve for oneself works that better done by themselves than by the others and hand over works that better done by the others than by them.” The aims of those transfer are to reduce the cost price and improve the competitiveness. For the manufacturers or shippers, using services of the third party logistics providers (3PLs) or mandate-to-import/export services are often effective options due to the following reasons:

Firstly, the costs for outsourcing is usually lower than the building cost of a working structure in the enterprises including human resource cost (recruitment, staff management, training, salary, income tax, insurances for the staff…), costs for the office and equipments, cost for building warehouse and transport system… Using outsourcing services will help the enterprise to get remarkable reduction in fixed costs and to reserve more resources for its core operation. The result of research “Effective using logistics services assessment” carried out by SCM company in 2008 showed that using outsourcing services helped to reduce an average 13% logistics cost and 11% total fixed assets.

Secondly, using outsourcing ensures that the works always operate in time and get ensured quality. In the import/export area now, customs declaration is a big obstacle for many enterprises due to its complicated procedures and unprofessional customs officials. Using services of the highly professional customs procedures agencies (CPA) will reduce plenty of shortcomings, gaining more convenient and faster. No. 76/2005/NĐ-CP Decree dated June 16, 2005 of the Government gave legal bases to deploy the professional CPA. During doing customs procedures, the CPA is on behalf of itself to declare, sign and stamp onto the customs declaration forms and responsible to the concerning information and documents provided by the cargo owners. With the CPA’s guarantee, the customs agency will shorten the time in study information of each consignment, each enterprise, reducing the time of customs clearance for the import/export cargo, helping to bring the goods to the market faster. SMC company research’s results showed that using outsourcing helped to reduce the order cycle to an average time of 6 days. In case there is any shortcoming, the authority just deals with the CPA who has guaranteed for the enterprise.

In the time of economic crisis, the change of the market brings as well many challenges to the working quality of the supply chain of the companies. Using the 3PLs is one of the short-term solutions which can help the companies to ensure their supply chains, give best support to their stableness and development. The Georgia Institute of Technology’s Logistics Outsourcing Services 14th Report in October 2009 tells us that over 60% researched companies admitted that they considered using 3PLs is one solution to overcome the supply chain’s challenges and 50% users of the services said that the 3PLs had given them innovative and creative solutions, helping to improve the effect of logistics operation.

In addition, using outsourcing also gives conditions so that the enterprises can use lots of modern IT and management skills, taking most advantage of the system, knowledge, experiences and experts of 3PLs to expand their market or send new services to the market, reducing the negativeness caused by the direct deal between the staff who do import/export procedures and the customs officials…

With benefits made by the 3PLs, using their services is the choice of most of modern businesses. One thing that should be thoughtfully considered is the ability and prestige of the chosen 3PL. One professional and prestigious agency will help the business to save their cost while the working quality still be ensured in long term.

Petroleum Offshore Trading & Services Company (POTS) is a reliable provider in logistics and mandate-to-import/export services. With its Head Office in Ho Chi Minh city and Representative Office in Ba Ria – Vung Tau, the POTS has been provided and is providing the following services:

– Mandate to import/export equipments, materials, raw and component materials for many big projects in petroleum with high rate of progress demand, including the forms: processing and manufacturing import/export investment, temporary import re-export… with import/export cargo’s value up to US$ millions.

– Doing as multi-transport agent, especially having specialized trucks for oversized or overloaded goods.

– Doing as international transport agent in Asian and European regions, including receiving and delivering “door to door”.

Petroleum Offshore Trading & Services Company is able to provide whole package services including: Customs declaration, goods transport, warehousing… therefore it can control the whole process and time of import/export for a consignment.

With its professional capacity, infrastructure, experiences as well as working process in import/export sphere, Petroleum Offshore Trading & Services Company satisfies every condition to receive preferential treatment policy of Law on Customs such as electronic declaration, given priority in customs procedures such as goods reality exemption. Time of deliverance including doing customs procedures time and delivering time, estimated 3 days since the date receiving sufficiently documents (do not apply for the items which have to get import/export license of the ministries who control specialize industries.) In case of urgency, time of deliverance can be reduced to within 2 days.

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