Can your supply chain be affected by weather?
Any shipper that has had to pay late fees to a retailer because they missed a delivery window may want to check out the newest way to hedge weather-caused transportation delays. Let’s say you have a critical air delivery due to ship to a Wal-Mart distribution center, but see that the nearest airport is likely to be closed tomorrow due to T-storms. You could potentially buy a contract from Weatherbill to protect you from any Wal-Mart penalty fees due to weather problems.
The following Q&A is lifted from the Weatherbill website:
What is Weatherbill?
WeatherBill is the first service to provide affordable and easy-to-use weather coverage to protect revenue and control costs for the millions of businesses impacted by the weather.
WeatherBill coverage is safe and reliable. There is no unnecessary paperwork, no claims process, no proof-of-loss and no waiting for payment. WeatherBill is the only service that enables customers to customize, price and buy weather coverage on line in just minutes, and pays automatically when bad weather occurs.
In addition to weather coverage, WeatherBill provides free services for businesses affected by the weather. Our free weather correlation tools help individual businesses understand how weather impacts their financial performance. Our research reports provide insight into the ways weather affects all industries. We believe every business should understand how the weather affects demand, yields, costs, schedules and the bottom line. WeatherBill can provide the earnings protection critical to every weather sensitive business.
What are Weatherbill contracts?
WeatherBill contracts are financial instruments that can be used by business managers and owners to protect against adverse weather. Adverse weather can be as simple as a rainy day or as destructive as a 6-month drought. If you know what weather conditions may impact your business, you can create a Contract that will pay you when the conditions occur, thus "hedging" your risk. Hedging your weather risk helps decrease the volatility of your business’s profits. There is no minimum contract amount – you can buy protection for as little as $1.
Why would I want to buy a WeatherBill contract?
Each year, businesses around the world are financially affected by the weather. For example, in the United States $2-3 trillion of the GDP is impacted. Globally, climate change could cost between five and 20 percent of the annual global gross domestic product. Heat waves, hurricanes – even abnormally warm winters or wet springs can impact the operations of all types of business. Ski resorts suffer during a warm winter and amusement parks lose visitors on rainy days. Sound planning means putting together a solid business interruption strategy. Weather Contracts can help guard against some of the unpredictability’s of weather. Use the WeatherBill Tools to learn more about how your business may impacted by the weather.
Well, if one can hedge fuel costs, why not the weather? Weather disruptions can mean big issues for supply chains, especially with retailers seeking penalties for any kind of shipment discrepancies. Weatherbill provides a marketplace to hedge against thses issues, especially for expensive, high valued shipments such as computers or HDTVs.
Finally, feeding the correct data to weather prediction models is also a major issue. Current high orbit satellites provide overview information but no detailed atmospheric measurements. GeoOptics , a GPS satellite company seeks to revolutionize how private satellite data is collected. They are developing a low-orbit satellite system that collects atmospheric information by recording how radio signals bend as they travel through the atmosphere. Scientists can measure the bend and signal delay relative to unbended radio waves to produce readings on atmospheric temperatures, humidity, pressure and electron density. The resulting information will allow forecasters and WeatherBill to better predict the size, course and intensity of major storms (hurricanes, typhoons) as well as ordinary weather patterns.
A VC in Vacationland 
Leave a comment