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 ID: 782290
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Slide1
Cost Recovery in
Monetization
TOPS Knowledge Sharing
Nov 2012
Slide2Overcoming 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
Slide3About 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 countriesFocused largely on agricultural development, enterprise partnershipsMonetize commodities for USDA, USAID and other organizations
Slide4Case Study: Liberia
Issue:
Large shipment planned for LiberiaAction: Coordinate shipmentsResult: “Recovery costs [95%] are very good relative to many other monetization programs,” Alliance for Global Food Security
Slide5Case Study: Madagascar
Issue
: Small shipment (7,000 MT bulk HRWW) and high rates; Buyer wanted to drop price by $25/MTAction: Land O’Lakes identified cargo going into Mombasa and advised lead agency on possibilityResult: Cargo shipped in bulk as per sales agreement
Slide6Case Study: Consolidation
Issue
: Multiple agencies and donors shipping to multiple countries, worked to consolidate costsAction: Consolidated shipments going to different countriesResult: Saved an estimated $1.7 million (actual $163-177/MT vs. rate of $215/MT)
Slide7Case Study
3:
ConsolidationUSDA FFPr TNS Kenya April 2012
-
Mombasa
11,000
MT bulk HRW
@$
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.
Slide8Case Study 4
: Coordination
CDSO Combo - April 2012Issue: 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).
Slide9Other Steps We Took
Discussed with NGOs and their freight agents
Communicated between USDA/USAID Provided more shipment and offloading oversightCommunicated more with NGO “partners” on sailing of vessels
Slide10Ideas 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?
Slide11Example Matrix of Port Dates
Slide12Worth the Extra Effort
Additional resources would
allow additional commodity to be shippedNo programmatic delays due to shippingIncreases actual cost recovery
Slide13Interested?
Contact:
Matthew Smith, Commodity and Program Manager; MHSmith@landolakes.com; (202) 370-1665Website: www.idd.landolakes.comTwitter: @LandOLakesIDDFacebook: www.facebook.com/LandOLakesInternationalDevelopment