Austin firm arms carriers, shippers with more advanced data to help inform decision-making
Each year, 22% of all crashes on U.S. roadways are attributed to weather. More than 32 billion commercial vehicle hours are lost due to weather-related congestion, and nearly 12% of all truck delays in just 20 cities are due to weather, the U.S. Dept. of Transportation (USDOT) reports.
The impact of weather, though, goes beyond just delays and crashes. Allianz Risk Transfer Group reports that weather impacts the economy to the tune of $534 billion annually. While high-profile weather events such as hurricanes, floods and tornados leave visible damage in their wake, weather impacts can be more subtle. “Routine weather” such as rain storms or heat waves affect GDP by 3.4%, Allianz says.
For those tasked with moving goods, the impact can be significant. Weather costs the U.S. trucking industry between $2.2 billion and $3.5 billion each year, USDOT notes. Understanding and proactively accounting for weather, though, can help trucking industry stakeholders mitigate the impacts.
Riskpulse is one of the companies doing just that. The Austin, TX-based firm is using its dynamic product lineup to help decision-makers manage the risks weather can play in the movement of goods. Using probabilistic intelligence, data visualization and recommendations within web-based platforms, the company is leveraging an in-house team of meteorologists to research and analyze weather risk up to 40 days out.
“What we found was that weather information was out there, but for people and businesses, [they are concerned with] how the weather is going to affect their family, their businesses, their agencies,” says founder and CEO Matthew Wensing.
Filling a weather information gap
Launched in 2007 as Stormpulse Inc., the company quickly found a market for its products, reaching six million users on the consumer side within five years. Offered through a website and media partnerships, the company’s early products sought to “create aggregation of the weather.”
Wensing says he founded the company along with Brad Wiemerslage after seeing the effect a series of hurricanes had on Florida. “I’ve always been cultural weather obsessed,” he points out. “When four hurricanes hit Florida in 2004, I saw an opportunity to [provide advanced] weather data.”
“Once we had six million people (using our service), we learned a lot about what people valued, talked to a lot of people, interviewed a lot of people, and found that … transportation and logistics [offered dynamic opportunities],” Wensing explains.
A name change came in 2013 followed by a merger with EarthRisk Technologies, a model forecasting firm, in 2015. Executives include John Plavan, executive chairman; Adrian Rego, chief technical & analytics officer; Stephen Bennett, chief operating officer; Jon Davis, chief meteorologist; Mark Russo, chief science officer; and advisors Hans Hickler, former chief executive officer of Agility Logistics, and Gordon Daugherty, former senior vice president CA Technologies.
Riskpulse’s flagship product is Sunrise. With Sunrise, a client’s shipping network can be mapped and visualized across the globe. The risk weather threats pose to facilities, shipping lanes, and individual shipments is then scored and color-coded based on individual tolerances for each location and cargo. Users are able to easily understand which shipments are impacted by weather events and what actions should be taken to reduce losses.
Sunrise can also provide users with a weather forecast across specific shipping lanes or for individual shipments. The cloud-based software offers instant communication capabilities through real-time updates of operational status at facilities or delays across lanes impacted by weather events. Customized reporting is available along with detailed historical analysis and daily, weekly or monthly risk summaries.
According to Wensing, fleets can use this information to, for instance, re-route a truck away from potential severe weather. That can be important to any carrier’s bottom line. During the height of the 2014 winter shipping season, DAT, which monitors spot freight rates, noted an uptick in those rates due to a series of storms that rolled across the country.
“A big storm hits, and traffic stalls – literally – until the roads are cleared,” DAT’s Mark Montague wrote on a company blog. “Then there is a burst of activity due to pent-up demand. Just as rates start to settle into some kind of equilibrium, another storm rolls in and the cycle begins again.”
In addition to delaying delivery or pickup of product, storms also force the closure of businesses, leading to cancelled orders. Those orders may be rebooked, but the resulting backup can be felt within the supply chain for weeks or months – and that drives up costs.
Buddy Holson, executive director of the North Carolina League of Transportation and Logistics, told Overdrive magazine that the flooding and road closures in the Southeast due to Hurricane Matthew in October 2016 cost shippers and carriers lost revenue for days. “You make some of it up but you don’t make it all up,” he told the publication. “I’d say carriers will recoup about 50% of [lost revenue].”
Knowing long-range weather forecasts can help fleets and shippers adjust shipping plans to mitigate the impact of weather-related delays. Better asset utilization is another benefit Wensing says.
“We are finding people are paying for over-protection,” he points out, such as running a refrigerated van trailer when the ambient temperature would be sufficient to sustain the product inside a dry van. That means the fleet is not utilizing its assets to full advantage and the result is more cost to the fleet and higher shipping rates for the customer, Wensing contends.
Smart companies rewarded
“Fortunately, we live in an economy where smart decisions are rewarded,” he says. “Shippers might be paying more because [an asset] is not available because it is tied up somewhere else. We are starting to see carriers incentivize” shippers to make smarter decisions.
Riskpulse’s Aurora product provides probabilistic forecasting intelligence up to 40 days in advance; daily, industry-optimized analytics and insights and meteorological research and support are also available. Aurora is built specifically for commodities traders and meteorologists and features a multi-modal forecasting ensemble.
A one-stop-shop for weather model guidance, users can get detailed daily, weekly, monthly and seasonal reports; five weeks of regional forecast data at-a-glance; and customized reports for industry-relevant regions from Aurora. Research services include tailored projects that link weather forecasts to financial decisions and academic research partners. Advisory services are also available.
Specific solutions are offered for energy and agricultural commodities trading as well as for supply chain professionals.
Riskpulse’s growth in the transportation space is yet another tool available to trucking fleets, shippers and third-party logistics providers in the never-ending quest to minimize the impact volatile shipping rates have on the bottom line.