Transcript IDD PowerPoint template

Cost Recovery in Monetization
TOPS Knowledge Sharing Nov 2012
Overcoming Obstacles
- Current Trends and Issues:
 Rising fuel prices have slowed or hindered commodity
shipments
 Organizations are seeking innovative solutions to reduce
costs and increase cost recovery
 Is there a role for a scaled up/more formal version of
what these organization are currently doing?
- Land O’Lakes’ Solutions:
 Consolidating shipments saves freight
 Follow monetization sales contract
About Us
- Land O’Lakes International Development
founded in 1981; acts as a not-for-profit
division of Land O’Lakes, Inc.
- Implemented 275 programs in 80 countries
- Focused largely on agricultural
development, enterprise partnerships
- Monetize commodities for USDA, USAID and
other organizations
Case Study: Liberia
- Issue: Large shipment planned for Liberia
- Action: Coordinate shipments
- Result: “Recovery costs [95%] are very
good relative to many other monetization
programs,” Alliance for Global Food Security
Estimated Shipment schedule for Liberia - FY 2012
Partner
OICI
Land O'Lakes
ACDI/VOCA
ACDI/VOCA
Commodity
Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12
Parboiled rice
CF
5500 MT
Parboiled rice Tender/CF
11,000 MT
Tender/CF
6600
Parboiled rice
CF
4540 MT
Vegetable oil
CF
200 MT
CF (Call Forward date)
The above dates are estimates. The dates will depend on FFP and USDA's call forward schedule.
Case Study: Madagascar
- Issue: Small shipment (7,000 MT bulk
HRWW) and high rates; Buyer wanted to
drop price by $25/MT
- Action: Land O’Lakes identified cargo going
into Mombasa and advised lead agency on
possibility
- Result: Cargo shipped in bulk as per sales
agreement
Case Study: Consolidation
- Issue: Multiple agencies and donors
shipping to multiple countries, worked to
consolidate costs
- Action: Consolidated shipments going to
different countries
- Result: Saved an estimated $1.7 million
(actual $163-177/MT vs. rate of $215/MT)
Case Study 3:
Consolidation
1. USDA FFPr TNS Kenya April 2012
- Mombasa 11,000 MT bulk HRW @$177.00/MT ocean (free
out).
2. USAID Prepo $162.67/MT
- Mombasa Prepo 5,000 MT bulk Sorghum ocean (berth
terms) + $20.00/MT bagging/stacking.
- Durban Prepo 10,000 MT bulk Sorghum ocean (berth
terms) + $44.25/MT bagging & stacking into warehouse.
3. USAID Title II CRS Madagascar 10,000 MT bulk wheat
@ $163/MT
4. Mercy Corp for Tanzania (FFPr) 6,340 MT bulk HRW
wheat.
5. CRS for Burundi (Title II) 3780 MT bulk HRW wheat.
CDSO Combo - April 2012
Case Study 4:
Coordination
- Issue: Tonnage small making freight rates costly
- Action: Land O’Lakes working in Mozambique and
Madagascar- advised lead agency on combo
possibility
- Result: Cost savings
 $562,500 for Malawi Program over actual rates or $803,000 over
budgeted rate $270/MT for 4,500 MT to Maputo vs. earlier quote Basis
4,500 MT = $395 per MT).
 $528,750 for Madagascar Title II ($270/MT for 2,350 MT vs earlier
quote of Basis 2,500 MT = $495/MT).
Other Steps We Took
- Discussed with NGOs and their freight
agents
- Communicated between USDA/USAID
- Provided more shipment and offloading
oversight
- Communicated more with NGO “partners”
on sailing of vessels
Ideas for Scaling Up
- Compile annual synopsis of U.S. Port dates
for all programs
 Where would it be housed?
 Would compile it?
 What are the security concerns?
- What else?
Example Matrix of Port Dates
Commodity Consolidation Matrix (CCM)
Monetization Bulk Commodity
Last updated: / /2012
At US Port Pgm
Commodity
Tonnage
Gov’t/INGO/NG
Destination
POC
O
3/10/12
FFPr
HRWW
11,000
TNS
Kenya
M Smith 202 370 1665
[email protected]
12/13/12
FFPr
HRWW
10,530
TNS
Kenya
Monet agent M Smith
1/15/12
FFPr
CDSO
6,100
Land O’Lakes
Mozambique M Smith 202 370 1665
[email protected]
3/15/12
TII
HRWW
10,000
CRS
Madagascar
Frank O
12/20/12
FFPr
SBM
12,250
TNS
Honduras
Monet agent M Smith
Monetization Processed
At US Port Pgm
Commodit
y
1/1/13
FFPr
Milled Rice
Bagged
1/15/13
TII
Milled Rice
Bagged
Distribution/Emergency
At US
Pgm Commodity
Port
11/1/12 TII
HRWW
Tonnage
Gov’t/INGO/NGO
Destination
POC
10,500
Land O’Lakes
Liberia
M Smith
5,500
ACDI
Liberia
B Elkin/M Tupac
Tonnage
Gov’t/INGO/NGO
Destination
POC
10,500
Land O’Lakes
Kenya
M Smith 202 370 1665
[email protected]
M Smith 202 370 1665
[email protected]
USAID 1 800 USAID Trans
USAID 1 800 USAID Trans
1/15/12
M-D
CDSO
940
Land O’Lakes
Pakistan
3/15/12
3/15/12
TII
TII
Sorghum
Sorghum
5,000
10,000
USAID Prepo
USAID Prepo
Kenya
Durban RSA
Worth the Extra Effort
- Additional resources
would allow additional
commodity to be shipped
- No programmatic delays
due to shipping
- Increases actual cost
recovery
Interested?
- Contact:
 Matthew Smith, Commodity and Program Manager;
[email protected]; (202) 370-1665
 Website: www.idd.landolakes.com
 Twitter: @LandOLakesIDD
 Facebook:
www.facebook.com/LandOLakesInternationalDevelopment