Paxafe CEO and co-founder Ilya Preston said AI technology and accurate data can improve the global cold chain dramatically, helping reduce food waste and emissions.
“If you optimize the cold chain, you’re going to see a reduction in product loss. You’re going to see reductions in greenhouse gas emissions,” Preston said during the keynote discussion Wednesday at FreightWaves’ Net Zero Carbon Summit. “You need to understand the nuances and get really into the weeds on the data, on the loss rate, where it’s happening, how it’s happening, the root causes, to understand which levers and which investments to make.”
Preston was joined by FreightWaves 3PL expert Mary O’Connell.
Indianapolis-based Paxafe is an AI-enabled, device-agnostic risk-management platform that aims to help clients reduce product loss, improve operational efficiency and optimize decision making.
Paxafe’s customers include companies in industries such as pharmaceuticals and produce. In May, Paxafe closed on a $9 million Series A funding round led by Framework Venture Partners. The company has raised $14 million since its founding in 2019.
PAXAFE’s risk management and decision intelligence platform created ATHENA, an LLM (large language model) to analyze supply chain data and provide proactive suggestions aimed at cutting costs, minimizing product waste and enhancing efficiency in cold chain networks.
“We want to put the cold chain on autopilot. We envision a world where we become the most accurate arbiter of quantifying, predicting and underwriting supply chain risk, and that’s exactly what we’re helping companies in the cold chain do today, both on the shipper and on the manufacturer side, as well as the logistics service providers,” Preston said.
The United Nations Food and Agriculture Organization estimates that over a billion tons of food is lost or wasted each year – an economic loss of around $940 billion annually.
Preston said there is no silver bullet to reduce waste or cut emissions across the global cold chain.
“There are so many different factors that need to be considered — regions, modes of transport, types of products, how sensitive those types of products are to the supply chain, what temperature tolerances are there for different foods, products that emit different amounts of greenhouse gases,” Preston said.
Companies seeking to improve optimization of their cold chain management should begin by establishing a baseline of their network’s performance, Preston said.
“The best way, the easiest way and some of the most common ways to do that is to figure out which technologies you can adopt to get you a raw source of data, and in the supply chain that could be IoT devices,” Preston said.
Internet-of-Things devices, such as real-time sensors, can provide data to ensure perishable goods are delivered on time and in expected conditions.
“Before you can start to move towards optimization, again, you need to go back to the question of, what are you optimizing for? There is no silver bullet. If you’re trying to optimize for financial returns or financial gains, you’re probably going to focus on, how much does food cost? What percentage of food waste is there?,” Preston said. “You need to use that baseline to understand what you’re optimizing for, and then you need to have a method to calculate, figure out what it is that you need to invest in specifically.”