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Binh Duong Customs: creating business advantages to develop logistics

(VLR) (Vietnam Logistics Review) Three key factors deciding Vietnam’s Export competitiveness are: transport and logistics infrastructure; legal importexport procedures and operation of production value chain. Under conditions of deeply international integration, Binh Duong Customs has been constantly trying to create positive changes in simplifying the administrative procedures, improving efficiency of government’s management to enhance logistics business in the province.

(Vietnam Logistics Review) Three key factors deciding Vietnam’s Export competitiveness are: transport and logistics infrastructure; legal importexport procedures and operation of production value chain. Under conditions of deeply international integration, Binh Duong Customs has been constantly trying to create positive changes in simplifying the administrative procedures, improving efficiency of government’s management to enhance logistics business in the province.

Current status of logistics enterprises

As from the survey, currently, Binh Duong’s logistics companies provide main services like: customs broker (68.8%), import-export procedure (62.5%), warehousing (65.6%) and bonded warehouse (62.5%), cargo handling (34.4%) and inventory management. Some full logistics services, such as order processing (15.6%), distribution (9.4%), quality test (3.1%), supply chain management (9.4%), information management (3.1%) or cross-docking (9.4%) still account for small portions. The logistics services mostly supply companies belonging to such industries as textile (74.2%), footwear and import-export (over 50%), electronic components and wood processing (over 35%). In particular, 44.8% of logistics enterprises have to hire international providers to supply warehouse operation and international transport (41.4%), similar to the situation of customs broker services for import-export goods (with rate up to 31%) and cargo handling or inland transportation (with rate at about 27.6%). Many import-export enterprises in Binh Duong still keep habit of buying CIF(66.67%) and selling FOB(61.3%), as a result, opportunities for logistics companies to provide full services are limited here.

Clearance capacity of Binh Duong Customs

Enterprises often implement customs clearance as a service mainly for import-export companies, excepting only 6 out of 21 private enterprises provide this service for themselves. In details, from last year, there was up to 78.1% of total enterprises implementing customs clearance over 10 times whereas 3 of them answered that they had not ever implemented this process in Binh Duong. 75% of the answerers chose the Binh Duong Customs destination to finish most of customs declaration, then Ho Chi Minh city and Dong Nai. The remaining, 25%, chose the place to finish customs declaration based on suggestions of clients. 24 out of 32 enterprises explained that the reason for their choice were advantages of the express customs clearance and simple procedure whilethe others thought it was due to the convenient location (68.8%), lower arising costs (40.6%) or the proximity of customs department to clients’ offices.

About advantages of clearance procedure in domestic border gates, 76.7% of enterprises answered that they chose the domestic customs clearance to avoid an overloading at border gates, 63.3% was due to the express customs clearance process, while 43.3% and 36.7% of them said they just wanted to avoid traffic jam in main roads and charged lower fees, respectively. Refers to disadvantages, 41.7% enterprises agreed there were no flexibility in timing and transport route registered with customs agencies in cases of accidents, 37.5% did not want to waste time to finish procedures exchanged between two agencies, whereas 33.3% of them afraidof troubles and annoyance when implementing customs clearance at border gates. Only 16.7% of answerers said the supervision of authorized department on export goods was getting strictly.

In terms oflegal support, assistance and consultancy from customs agencies in Binh Duong, the agency in IZ Vietnam – Singapore and cargo management agency outside IZs have not received positive responses from customers. In contrast, Song Than customs agency and Song Than IZ agency satisfied customers’ demand with 12.5% of answers agreed.

About the suitable place arrangement for customs declaration, some agencies, like IZ Vietnam- Singapore customs agency, Song Than customs and Song Than IZ agency were evaluated to be appropriate, and no case of unsuitable location recorded. Only IZ Viet Huong agency received 9.4% negative responses for its unsuitable location whereas other customs agencies were assessed to be arranged suitable places with 95% agreements upwards.

Refers to easily access when implementing customs declaration at these departments, there are 21.4% of enterprises answered that the monitoring after clearance was difficult, while 16% agreed the tax management was very challenged and 30% said that cargos could go through security checkpoints and customs clearance process from easily to very easily. Most of the answers thought this situation was commonhappened to supervision activities after clearances (from 57.1%) and for administrative penalties (up to 71.4%).

Talking about the cooperative and supportive attitude from customs agencies,last year, Binh Duong Customs always actively approached to attract enterprises and develop partnership with the enterprise community. They also demonstrated on organizing conferences with direct discussion for enterprises, who were implementing customs declaration in Binh Duong, to publish regulations and policies about tariffs, customs declaration etc. Through these conferences, the arising problems or difficulties relating to custom clearance of the enterprises were solved in accordance with legal authorities and their competencies. Besides, to create maximum supporting conditions to import-export enterprises, Binh Duong Customs has improved implementation of administrative procedures at different customs agencies on holidays or breaks to ensure full practices of the procedures, then to save time for the enterprises. This is one of factors helping Binh Duong Customs fulfill well the tasks in recent years hence it has been approved by General Department of Vietnam Customs to be one of the five most effective departments among provinces and cities in Vietnam.

Providing favorable conditions for enterprises with customs clearance of export cargoes

Clearance capacity of cargoes is one of important factors creating favourable conditions for the development of Binh Duong’s logistics. An effective clearance system has to have criteria like: quick customs clearance time; simple, clarified and transparent customs procedures; ability to be available to solve complaints and problems; good attitudes and qualification of officers when performing customs clearance; ability to coorperate, support enterprises and collaborate with other customs departments to create advantages for the import-export enterprises.

Based on survey results, this paper can propose some suggestions for the development of logistics enterprises as follows:

For customs officers

Need to improve their responsibility and skills, working integrally, fairly and impartially.

Concentrate to complete communication skills like working friendly, courteously and equably, not creating difficulties for the enterprises in import-export field.

For Binh Duong Customs

Need to organize more training courses, seminars or meetings with the enterprises to answers their questions, solve the difficulties as well as support them to propose their suggestions to related institutions, also announce or publish legal documents for the enterprise to understand fully and follow.

Always update information and new documents related to import-export activities, enhance the good partnership between customs departments and enterprises. When changing customs procedures, the departments have to provide guidances and explanations in details.

Creat more favourable conditions for express customs clearance to promote production, export and reduce arasing costs for the enterprises, such as container storage fees, demurrage fees and other informal fees.

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