This case was presented in Spring 2011 and revolves around a partnership between Hapag Lloyd and SEED. A strategic implementation plan to use old and idle containers to be shipped to Haiti to be converted to houses is discussed.

1. Container Housing Initiative in Haiti CargoCordia Consultants Ron Cohen Sarah Dupuis Laura Gibson Mark Bundang Nelly Abilmouna

3. Situational Analysis

4. Recommendation

5. Implementation Plan

6. ConclusionAgenda

7. SOCIAL RESPONSIBILITY challenge

8. Idle and old cargo containers pose as an environmental risk

9. More than a million Haitians remain homeless one year after the devastating earthquake

10. Our recommendation:Partner with the SEED Project at Clemson University

11. Our recommendation:Partner with the SEED Project at Clemson University

12. Analysis of the industry

14. Due to recent recession in 2009, total trade slumped roughly 6.4%*

15. Profitability and growth depends on efficient operations and safety record

16. Industry is capital intensive. Larger companies enjoy advantages due to their fleet size and port accesshttp://goliath.ecnext.com/coms2/gi_0199-11948040/International-shipping-the-lifeblood-of.html

18. During the 2009-2010 recession, shipping line operators were struggling due to decreased trade. As a result, shipyards were flooded with unused cargo containers.

20. Retail cost for shipping deadhead to China:$5,631

21. Deadheads are left behind because it is not economical to ship them back to port of origin.VS $5,631 $2,000 30 million deadheads are pilling up around the world

23. Hapag-Lloyd 5% Market share = 5,000 deadheadsSEED Initiative - http://www.cusa-dds.net/seed/?page_id=332

25. Pollution of seaways

26. Threat to marine life50 Million Cars 1 Ship

28. Implement emission reduction policy

31. Minimizes the movement of deadheads in order to reduce carbon emissions.

34. Almost 5 million TEU (containers) in a year

36. Industry leading IT system

38. Cash flow from operations: EUR 429 million (in the first 3 quarters) http://www.pwc.com/be/en/transport-logistics-newsletter/assets/Global-Shipping-Benchmark-study.pdf

39. Hapag-Lloyd is dedicated to environmental sustainability Hapag-Lloyd’s Sustainability Policy: “As an environmentally oriented company, we place high priority on environmental issues in managing our business. We will continue to seek inventive ways to conserve global resources and protect the environment. This is proof of our commitment to the environment and society”. HL created an environment, health and safety department

41. Reduction of greenhouse gas and other emissions along the transport chain

42. Lower vessel fuel and energy consumption

43. Reduction of energy and paper consumption

44. Worldwide ongoing staff trainings on environmental and safety issues Environmental Protection On Board our Ships

45. Hapag-Lloyd has 3 main options for the empty containers in Haiti

46. Initiative analysis

49. 90% of shipping to Haiti enters through Port-au-Prince

50. More than 300 containers received per day*Published on Tuesday, January 11, 2011 by CommonDreams.org

52. Shipping containers withstand extreme weather conditions

54. SEED has begun training local Haitians to put the pods and containers together to make functional.

55. Pieces arrive ready to incorporate.

57. Clemson University Architecture Team

58. Tri-County Technical Department of Welding

60. Intermodal Steel building Units Association

61. American Red Cross

62. Sargent Metals

64. Cost to redesign for housing: 95$/sq.foot

65. 160 sq.ft : Under 1,600$/ container-house

66. 320 sq.ft: Under 3,200$ / container-house

68. Reducing the number of homeless

69. Provide work for Haitians

71. Less destructive on the environment than recycling containers. 95% less energy consumption to convert container to house than to melt down for scrap.

73. Improve reputation as a social and environmental responsible company (internal and external)

75. Hapag-Lloyd and SEED will leverage their core competencies and share responsibilities for the initiative HL SEED Partner HL Government Local Haitians SEED / HL SEED

76. Overview of Implementation Plan Technology

78. 5 labourers per team

79. First year will require significant set-up time and training

81. Assign a project manager and cross–functional core team of 10 employees Routing management IT HR Environment specialists Marketing Regulatory

83. Operations: Route Management in Caribbean

85. Sales reps

86. Orders placed online

88. Sales reps

89. Orders placed online

90. Trade shows and conventions

94. Share stories from fellows in Haiti

97. Ideas can be rated by other employees

99. Reduction of carbon emissions

101. Budget

102. Timeline

103. Change Resistance Plan

104. conclusion

105. The benefits of the cargo housing initiative in Haiti are numerous

106. Thank you!

107. Risks and Contigencies Political risk / General corruption Donations Another natural disaster/Disrupted port activities Look into other ports Competitor partners with SEED Look into other countries Look into other partners

108. Hapag’s Operating Cash Flow

109. Hapag’s Income Statement

110. Hapag’s Balance Sheet (assets)

111. Hapag’s Balance Sheet (L & E)

113. Receipt & discharge $8 to $15 $10

114. In land transport $0.70/km $0.70

115. Container handling $90 to $150 $120

116. Transport sea leg:

117. 1,000 TEU ship $20 /TEU /day

118. 3,000 TEU ship $13 /TEU /day $13 /TEU /day

119. 7,000 TEU ship $10 / TEU/dayhttp://www.palgrave-journals.com/mel/journal/v7/n3/pdf/9100139a.pdf

121. Cost to get it to vendor

122. Handling costs $120

123. Transportation costs $546

124. Profit $234

125. Tax on profit (*15%) $35.10

126. Net profit $198.90Tax benefits from Donations: $30 (assuming 15%) Loss from donations: $169

127. Estimate of the export market in the Caribbean

128. Each partner will leverage its core competencies

129. Budget – Hapag Lloyd Internal Ops

130. Budget – Hapag Lloyd Logistical Operations

131. Budget – SEED Conversion Operations