Tuesday, October 20 2020

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Nine things to keep business on track amid COVID-19

Update: June, 01/2020 - 06:42

 

Trần Đăng Nam, CEO and Chairman of Dolphin Sea Air Services Corp.

Trần Đăng Nam *

As an entrepreneur who has nearly 20 years working in the field of international freight forwarding, Trần Đăng Nam, CEO and Chairman of Dolphin Sea Air Services Corp, shares his nine perspectives to help the logistics business community cope with severe damage caused by the global COVID-19 pandemic.

“Logistics services are commercial activities whereby traders organise the performance of one or many jobs including reception, transportation, warehousing, yard storage of cargoes, completion of customs procedures and other formalities and paperwork, provision of consultancy to customers, services of packaging, marking, delivery of goods, or other services related to goods according to agreements with customers in order to enjoy service charges," according to Article 233 in the Vietnam Commercial Law.

A freight forwarder is an intermediary, which delivers goods from the owner, or consolidates many small consignments (consolidation) into larger shipments and then subcontracts the carriers (ships, airlines), ships from the point of departure to the destination either domestically or internationally.

Companies who wish to transport freight will reduce costs by using a forwarder, because they will find the best shipping route, mode and the most appropriate carrier. Especially for small or retail shipments, the forwarder would combine them for transport, thus reducing costs for each individual shipment.

In addition, the forwarder also provides customs clearance. Forwarders can represent the goods owner to complete customs clearance and pay import and export taxes, or deal with issues related to documents – such as bill of lading (B/L), certificate of origin (C/O), import and export licence.

Today, under the impact of globalisation, import-export operations have become stronger than ever. Accordingly, the demand for goods transportation is also constantly increasing. In terms of trend factors, logistics services in general and forwarding in particular are increasingly developing and are among the top 10 hottest industries in Việt Nam today.

Besides business opportunities, there are potential challenges and risks both within the enterprise and the competitive pressure and volatility in the market.

Small-scale companies sprout up like mushrooms and also disappear quickly, easy to set up and dissolve. The reason is partly because of a seasonal, fragmented survival strategy when starting a business just to serve a few certain sale orders; partly because of the short-term vision, price competition and the lack of resources to go long distance, or it could be that the people are inconsistent with the common goal, compromising for the immediate benefits and hence dissolving themselves for each individual who wants to be the owner.

For big, long-established and well-known businesses in the market or those who have the potential to cover their market, they will either provide a full service, gain exclusive cooperation in certain aspects; or they will find a niche market, have a long-term vision, and flexible tactics to adapt to changes in the market.

During the course of developing my business, I have lived on the edges many times with crises arising both inside and outside the organisation. Most recently, the COVID-19 pandemic has had a strong impact on the flow of goods delivery when many countries implement social distancing, strictly (but not completely) restricting trading activities through both sea and air. Thanks to our experience and the fighting spirit to turn challenges into opportunities, we are fortunate to stand firm during the time when our country implements "social distancing". From practical experience that has helped my company and all employees overcome difficult times, I would summarise the following vital factors:

First: Always consider suitable staff as the most valuable treasure of an enterprise in order to have good personnel policies, ensure a clean and consistent working environment to uphold the spirit of teamwork, the spirit of the warrior in all circumstances, rapidly propose preventive measures to ensure health in this pandemic for employees and flexible adaptation is a top priority. For example, personnel work at home and separate at different hubs, shift work but still ensure service, guaranteed 100 per cent full salary pay.

Second: Company leaders need to adapt to market changes, besides updating information, they need to have a contingency plan for the worst case scenario; the forecast of risk levels and options two, three and four should be prepared so that when the reality hits, the enterprise will not be passive, causing internal confusion.

Third: Evaluate and decentralise the priority level for products/services, jobs, people, facilities, infrastructure, relationships. I collectively call them "assets" of businesses to know clearly when they need to cut, what to cut first and what later.

Fourth: Manage cash flow more closely and always have a reserve fund, in situations where it is impossible to preserve resources, at least we are able to retain the minimum assets to help the enterprise survive.

Fifth: Cut unnecessary expenses but still prioritise investment in technology application and online activities, to develop new ways of working throughout the company. We negotiate to reduce rent, extend taxes payments, upgrade online meeting software, online sales/marketing, and invest more in the current administration software, in e-learning/customer care segment.

Sixth: Keep attacking and expanding to new business opportunities because there is always an opportunity in a risk. Even though we have some long-time key products/services that made the enterprise's name in the market, we still need to invest, more or less, in a few new activities, creating new playgrounds. Sometimes the small and new services/markets become a business' lifesaver when key products/services are frozen. During this time, the company is strongly developing shipping and transportation of medical items, food grade, and online sales/delivery, targeting the markets which are less affected by COVID-19.

Seventh: Push communication to promote strong morale and the warrior spirit, as well as the spirit of sharing and inspiring to create confidence so that all employees could focus on working at least 200 per cent more than before the epidemic. We are constantly giving out internal messages, leaders' letters, and continuous communication about how to survive, to destroy the negative spirit of fear.

Eighth: We need a network of excellent relationships to connect, share and learn. Being the vice chairman of the Hanoi Young Business Association (HanoiBA) and an alumni of the Vietnam Executive MBA Programme – University of Hawaii (VEMBA) has provided me a wide important network of contacts, helping Dolphin to continuously learn, overcome difficulties and find new opportunities.

Finally: Build corporate culture as soon as possible. The darker it is, the easier it is to find the ray of light, and more challenges also mean more opportunities. Whether we can turn risks into opportunities or not depends largely on corporate culture. If an organisation has a flexible, creative, dynamic, open working culture or simply is united, adapting to change and quickly finding a new way is totally possible.

The ability to manage risk is vital not only for the head of the business but for all levels of management, even for each employee. In times of volatility, it can not only help businesses stand firm in the market but also develop breakthroughs. And in a stable time, it will help businesses limit waste, improve operational efficiency and ensure the achievement of the set goals.

* Trần Đăng Nam in 2008 established Dolphin Sea Air Services Corp. Starting out as a company providing LCL and consolidation service, the company now provides a wide range of freight forwarding services. With more than 12 years of operation, 18 branches nationwide, a network of agents & partners in 120 countries and territories, a steady annual revenue growth of at least 30 per cent, the company has built up a reliable image in the heart of its customers, about a company specialising in providing full package of services, serving the needs of transporting goods by sea, air and road across borders, customs services, warehousing and other logistics services. Nam is also investing in a number of other logistics companies in Việt Nam, Cambodia, Myanmar, Thailand, China, Taiwan, Australia, Korea and India, creating over VNĐ2.5 trillion (US$107.2 million) consolidated revenue of his companies. He is expanding his investment in this field to create a wide-ranging and interconnected logistics ecosystem in the goods and service supply chain.

 

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