2 finance questions

Special Topic 2 – Assignment 1 (Team of 3)

UberTruck entering Vietnam offering Backhauling services

1. Types of Backhauling

Type 1:

Type 2:

Type 3:

Type 4:

2. Cost of Getting a Backhaul Trip from North to South 1800 km (Source Vietnam Post

Logistics report)

Each truck needs 3 drivers for each North to South trip

Average

waiting time

(days)

Major waiting cost components

(VND/ day)

Average waiting cost (VND) (North-

South truck/ driver)

1 ringgit is equal to 5,253 Viet Dong Parking Meal/ Lodging

1.5 – 2 days 0 100,000 VND/

driver a day

150,000 – 200,000/

3. Existing Backhaul lanes in Vietnam

4. Transportation Volume in Vietnam

Volume of goods through seaports in the period 2010 – 2015

(Source: Vietnam Maritime Administration)

Parameter Unit 2010 2011 2012 2013

2014

2015

1 Total cargo

through port 1000 ton 259,145 286,092 294,556 328,795 373,027 427,816

2

Container

goods

1000 ton 72,937 81,039 91,068

101,113

118,394

126,348

1000 TEUs 6,521 7,210 8,040 1,622 10,398 11,527

3 Liquid cargo 1000 ton 51,069 51,099 49,566

49,729

52,078 59,233

4 Dry Cargo 1000 ton 105,109 109,679 112,853 136,472

154,582

185,904

5 Transit goods 1000 ton 29,490 43,762 41,062 41,480 47,971 56,330

Volume and market share of containerized cargo through seaport in TEU

(Source: Vietnam Maritime Administration)

Year

Country Northern Central Southern

Weigh Weigh (ton) % Weigh % Weigh %

1 1995 532,676 117,636 22.08 12,340 2.32 402,700 75.60

2 1996 634,252 149,100 23.51 17,375 2.74 467,777 73.75

3 1997 704,111 165,351 23.48 22,879 3.25 515,881 73.27

4 1998 820,038 183,805 22.41 22,657 2.76 613,576 74.82

5 1999 977,860 198,618 20.31 25,866 2.65 753,376 77.04

6 2000 1,151,759 216,000 18.75 42,617 3.70 893,142 77.55

7 2001 1,300,287 238,622 18.35 39,121 3.01 1,022,544 78.64

8 2002 1,500,957 339,044 22.59 51,835 3.45 1,110,078 73.96

9 2003 1,779,979 384,273 21.59 57,895 3.25 1,337,811 75.16

10 2004 2,228,694 495,647 22.24 76,277 3.42 1,656,770 74.34

11 2005 2,724,493 643,547 23.62 84,007 3.08 1,996,939 73.30

12 2006 3,420,000 790,856 23.12 100,669 2.94 2,528,475 73.93

13 2007 4,489,165 1,075,658 23.96 128,954 2.87 3,284,553 73.17

14 2008 5,023,000 1,380,202 27.48 154,594 3.08 3,488,204 69.44

15 2009 5,539,247 1,842,336 33.26 142,461 2.57 3,554,450 64.17

16 2010 6,520,628 2,187,011 33.54 195,004 2.99 4,138,613 63.47

17 2012 8,040,000 2,700,000 33.58 260,000 2.23 5,080,000 63.18

18 2013 8,626,026 3,005,119 34.84 236,791 2.75 5,384,116 62.42

19 2014 10,398,240 3,506,036 33.72 389,598 3.75 6,502,606 62.54

20 2015 11,527,197 3,898,121 33.82 400,068 3.47

7,229,008 62.71

Source: Vietnam Maritime Administration

Container transport in each region in Vietnam

A) Northern region

At present, ocean freight by sea in the northern area mainly through seaports in Hai Phong

and Quang Ninh, including 4 main corridors connecting to seaports

 Lao Cai -> Hanoi -> Hai Phong

 Ninh Binh -> Hai Phong -> Quang Ninh

 Hanoi -> Thai Nguyen

 Hanoi -> Lang Son

Container shipping on the North Corridor 2015

Transport corridor Mode of

transport

Weigh (1000 TEU)

Starting point Ending point

1 Hải Phòng - Hà Nội - Lào Cai Roads, rails 2845 110

2 Ninh Bình - Hải Phòng - Quảng

Ninh Road 102 67

3 Hà Nội - Thái Nguyên Roads, rails 616 110

4 Hà Nội - Laṇg Sơn Roads, rails

378 35

5 Bắc Ninh - Quảng Ninh Roads, rails

110 177

Container shipping corridors and shallow port area in the northern region

The main mode of transportation to and from seaports in the north is mainly by road, rail and

inland waterways. Over 95% of containerized cargo arriving and arriving at seaports is

currently transported by road, (railroads account for only about 5% and river transportation is

almost negligible).

- The loading and unloading capacity at the main stations on the route is still limited,

especially container loading and unloading (12 stations permitted for container transportation,

only 3 stations in Hai Phong, Yen Vien and Lao Cai are equipped with container handling

equipment) .

- In addition, the outdated, backward railway infrastructure, the lack of container coaches

leading to the shortage of wagons and the risk of unsafe traffic.

B) Southern region

Imported and export goods shipping by sea in the South mainly through seaports in Ba Ria -

Vung Tau, Ho Chi Minh City, consists of 3 main corridor connected with sea ports

- Ho Chi Minh City -> Tien Giang -> Can Tho

- Ho Chi Minh City -> Ba Ria -> Vung Tau

- Ho Chi Minh City - > Binh Duong

Container shipping on the South Corridor 2015

Transport corridor Mode of transport

Weight (1000 TEU)

Starting point Ending point

1 Hồ Chí Minh – Tiền Giang – Cần Thơ Road, inland seaways 4,865 235

2 Hồ Chí Minh – Bà Riạ Road, inland seaways 4,865 1,594

3 Hồ Chí Minh – Bình Dương

Road

4,865

Container shipping corridors and shallow port depots in the south

Inland container transportation in and out from seaports in the South is carried out by land

and by river, of which land accounts for 65-70%, and waterways account for 30-35%.

5. Questions

1. Develop a Business Model Canvas for UberTruck in Vietnam

2. What are the potential revenues and profits for UberTruck in northern and southern

regions of Vietnam?

3. Conceptualise the Backhauling business into an ecommerce business in Vietnam.

Be mindful that there are already some ecommerce players in the country.

a. http://www.freightnet.com/directory/p1/cVN/s25.htm

b. https://gosmartlog.com

c. http://www.vietnamtrucking.vn

4. Develop a cash flow projection for your Backhauling business in Vietnam. State all

your assumptions.

5. Prepare a set of slides to present in class