The cold chain has garnered heightened attention amid worker shortages and vast COVID-19-related delays and disruptions. After all, the cold chain is made up of foods we eat and the medicines we need, an estimated $4 trillion global industry that relies on seamless transport to maintain quality.
While harmful temperature deviations inevitably occur, according to Parsyl founder and CEO Ben Hubbard, many insurance policies for cold cargo don’t cover the primary risk: temperature.
“Shippers are often pretty disappointed with the insurance product that they buy,” said Hubbard. “As for insurers, they don’t have a lot of information or data. They’re given information one time a year, often through layers of brokers, so they don’t really have a direct relationship with the customer. They don’t understand the granular risks.”
Parsyl, a Denver-based tech-enabled insurance provider for cold chain, provides better data to shippers for three reasons: to improve shipper performance, to provide wider insurance coverage and to protect the cargo from potential spoilage. And should a spoilage event occur, Parsyl simplifies the claims process for shippers.
“For these types of goods, it’s a race against time. You’re battling shelf life with every minute that passes. Time over temperature is huge. Even for frozen goods, you’re dealing with unforeseen events, human error, mechanical breakdown. We’re seeing what everyone is seeing right now: major disruptions in the supply chain. Anytime you throw that type of unpredictability into the supply chain, you’re going to have to mitigate those risks.”
Parsyl monitors shippers’ goods to ensure their integrity at arrival. If those goods have spoiled or deviated from the ideal temperature, Parsyl helps the shipper identify the issue and will quickly pay the claim. The data and insights collected by Parsyl help shippers improve future performance to mitigate risk, ultimately reducing the cost of future insurance.
“We’re looking at different shipping lanes, vessel providers, packaging performance, and we use those insights to help avoid losses from happening in the first place,” said Hubbard.
Parsyl works with shippers, retailers and third- and fourth-party logistics providers to monitor and insure global cold chains across food and pharma, including vaccines being distributed to hard-to-reach places in the developing world.
Iceland seafood supplier Niceland uses Parsyl’s parametric insurance product, which provides fast payout based on a customizable spoilage trigger. Recently a shipment traveling from Reykjavik to Los Angeles sat for too long on a hot tarmac, but because Niceland received text alerts on the temperature exposures, it was able to confirm the loss and get a same-day payout based on Parsyl’s data. Typically, this process would take months to resolve, hindering cash flow and business operations.
“In this business, time and temperature is money,” said Patrick Dunaway, director of U.S. sales and sustainability at Niceland Seafood. “Being able to show your customer the data instantaneously when your shipment arrives, you can really build up the trust and confidence in the quality of your product and gain new customers through that.”
Parsyl also currently monitors the cold chain of six African countries, including the distribution of COVID-19 vaccines and childhood immunizations. In Senegal, for example, Parsyl placed its wireless sensors inside the cold rooms, refrigerators and cold boxes that store and transport vaccines, learning that 5% of refrigerators accounted for 50% of alerts. Replacing these refrigerators reduced vaccine spoilage due to freezing temperatures by 24%.
“Our supply chain has improved thanks to Parsyl,” said Mor Diama, a vaccination logistician within Senegal’s Ministry of Health. “We’ve been able to identify and replace certain cold chain equipment and improve best practices for storing vaccines within their recommended temperature ranges.”
Hubbard added, “The end goal for our customers is to reduce waste and deliver potent medicine and safe food. We help them do it with data.”