cost recovery in monetization tops knowledge sharing nov 2012
TRANSCRIPT
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Cost Recovery in MonetizationTOPS Knowledge Sharing Nov 2012
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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
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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
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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 Commodity Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12OICI Parboiled rice CF 5500 MTLand O'Lakes Parboiled rice Tender/CF 11,000 MT Tender/CF 6600ACDI/VOCA Parboiled rice CF 4540 MTACDI/VOCA 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.
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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
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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)
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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/MT4. Mercy Corp for Tanzania (FFPr) 6,340 MT bulk HRW wheat.5. CRS for Burundi (Title II) 3780 MT bulk HRW wheat.
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Case Study 4: Coordination
CDSO Combo - April 2012
- 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).
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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
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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?
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Commodity Consolidation Matrix (CCM) Monetization Bulk Commodity Last updated: / /2012
At US Port Pgm Commodity Tonnage Gov’t/INGO/NGO
Destination POC
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 Commodity
Tonnage Gov’t/INGO/NGO Destination POC
1/1/13 FFPr Milled Rice Bagged
10,500 Land O’Lakes Liberia M Smith
1/15/13 TII Milled Rice
Bagged 5,500 ACDI Liberia B Elkin/M Tupac
Distribution/Emergency
At US Port
Pgm Commodity Tonnage Gov’t/INGO/NGO Destination POC
11/1/12 TII HRWW 10,500 Land O’Lakes Kenya M Smith 202 370 1665 [email protected]
1/15/12 M-D CDSO 940 Land O’Lakes Pakistan M Smith 202 370 1665 [email protected]
3/15/12 TII Sorghum 5,000 USAID Prepo Kenya USAID 1 800 USAID Trans 3/15/12 TII Sorghum 10,000 USAID Prepo Durban RSA USAID 1 800 USAID Trans
Example Matrix of Port Dates
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Worth the Extra Effort
- Additional resources would allow additional commodity to be shipped
- No programmatic delays due to shipping
- Increases actual cost recovery
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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