Selling Weather Data : Chasing Rainbows: It Pays Off

Except for the freight trains rumbling along the Texas coast, life ashore all but ground to a halt as Hurricane Gilbert whirled off the coast. Those freights--puny in the context--stood out in a region otherwise battened down in the face of the Western Hemisphere’s worst storm ever.

But in maintaining freight operations during the mid-September hurricane, Southern Pacific Transportation was riding on more than blind hope. Before it became clear that Gilbert would storm ashore in Mexico, striking Texas only a glancing blow, SP relied on up-to-the-minute meteorological intelligence from private consultants. They zeroed in on the railroad’s narrow band of coastal right-of-way.

“They gave us such good forecasts on where Gilbert was likely to go and how long it would take to get to a vulnerable place along our route that we were able to keep on operating,” said Rollin Bredenberg, general manager of SP’s eastern region in Houston.

Never Shut down

“We never closed the railroad down north of Corpus Christi. But our competitors did, and as a result we had a lot of praise from our customers--particularly the steamship companies in the Gulf,” Bredenberg said.

Behind the special reports was a small, privately owned firm in Wichita, Kan., called WeatherData, which continues to alert SP to high winds and high-water threats. The company is part of a new industry, which supplements the federal government’s budget-starved National Oceanic and Atmospheric Administration (NOAA) and its National Weather Service.

Of perhaps 100 weather-related companies--with estimated total annual sales so far of only about $100 million--a handful of firms specialize in collecting and distributing weather and lightning data and satellite images. They draw on domestic and international sources, including NOAA. Most of the newcomers, like 7-year-old WeatherData, use this raw material to fashion custom forecasts and other weather “products” that they peddle to a widening array of clients.

‘Plays Major Role’

“Weather plays a major role in what happens to many businesses,” observed Kenneth W. Reeves, a senior meteorologist at one of the older and better-known companies, Accu-Weather, established in 1962 at Pennsylvania State University’s hometown of State College. “If they can get one-up on the competition in terms of getting a better forecast it helps save money or make more money.”

Airlines, for example, may use private weather firms to help them, as one meteorologist put it, “try to out-guess what the FAA is going to do” if storms develop over major transfer points. “They would rather hold their planes in St. Louis than send them on to some holding pattern over Chicago. That’s expensive and it aggravates their customers.”

Such seemingly weatherproof companies as Sears, Roebuck and M & M/Mars employ staff weather specialists, said Todd Glickman, a meteorologist with Weather Service International, an information purveyor in Bedford, Mass.

“Mars buys a lot of cocoa,” he explained, “and they want to know, for example, how much precipitation fell in the cocoa-growing regions of the Ivory Coast in the last six months.” (Such information guides the company in buying the commodities it needs for candy.) “Sears worries about the weather from a retailing standpoint. After all, when the weather turns cold (in a given region), you want to be sure you have enough snow shovels on hand.”

The economic consequences of a lack of reliable weather data shows up most frequently in the nation’s commodity markets, according to Robert L. Carnahan, the federal coordinator of governmental weather operations. Rumors of an impending freeze or rain--or the lack of either--can spook prices for the future delivery of grains, as was seen frequently during last summer’s Midwest drought.

“Very often a little bit of meteorological consultation can confirm or deny a rumor like that,” Carnahan said.

Among the private weather-related firms is Minneapolis’ R-SCAN, which specializes in lightning warnings. Clients include Federal Express, whose employees at the central sorting hub in Nashville, Tenn., shuttle packages from plane to plane in a region susceptible to thunderstorms. When lightning threatens, the company must shut down outdoor operations and move crews indoors--a costly and time-consuming lull if no lightning materializes, said Walter A. Lyons, founder of 7-year-old R-SCAN (derived from “Remote Sensing, Computerized Alerting Network”).

Golf Course Risk

Another client, the U.S. Golf Assn., hired the company to provide warning of lightning as black clouds gathered over the final round of the 1985 U.S. Open in Birmingham, Mich. “They deployed people all over the course with ‘beepers’ so they could clear it in a hurry,” Lyons said. “But we were able to tell them there was no lightning. Just a lot of rain.”

Other customers of private weather firms include truckers, shipping lines, electrical utilities, research institutions--not to mention (especially during this year’s long, hot summer in the Midwest) grain brokers, commodity traders and other farm-related concerns.

Even NOAA itself.

In Southern California, for example, the National Weather Service closed its office at Long Beach Municipal Airport last year, contracting instead with a private firm to provide weather coverage, said Arthur G. Lessard, managing meteorologist for Southern California.

“The trend is for more privatization,” Lessard said, “especially where it can be shown that the service can be done as efficiently and possibly more cheaply.” La Guardia and John F. Kennedy airports in New York already are served by private weather contractors, as is Dulles International in Washington and Dallas/Ft. Worth International and Seattle-Tacoma. Los Angeles International will eventually follow suit.

The trend to “privatization” was encouraged five years ago when NOAA released a private study of what its weather role should be into the new century. The study, by the firm of Booz-Allen & Hamilton, recommended that the weather service adopt “a focused mission,” replace out-moded weather-tracking and data-transmission equipment and “encourage the dissemination of weather information by the private sector.”

Filling the Void

Even before that study, NOAA had struggled in an era of increasing federal budget deficits and cutbacks that forced it to delay buying equipment and to end services formerly provided the public at no cost. Filling that void have been private meteorologists, many of them former government forecasters.

“They’re doing jobs the government cannot do,” said Sol Hirsch, executive director of the National Weather Assn. in Temple Hills, Md., whose 1,750 members include private-sector meteorologists. “The government generally does not tailor forecasts to a particular person or company, and this is what a private meteorologist does. Business needs that information.”

NOAA’s National Weather Service “does a heroic job when it comes to warning people of disasters, and the private sector is grateful for that,” said Lyons of R-SCAN. “Where we make our money is in the more mundane things--like forecasting the high temperature for a given day. To an electric utility, one degree can make you miss by a million megawatts in terms of meeting energy needs. That’s costly.”

The federal government has provided most of the nation’s meteorological information since the War of 1812, during which Surgeon General James Tilton ordered hospital surgeons to observe the weather and keep climatological records for use in studying the effects of weather on health.

The weather mission remained fragmented, however, until Congress in 1870 authorized the secretary of war to take observations at military posts and warn of storms on the Great Lakes and along the Atlantic and Gulf coasts. The Army Signal Corps carried out that responsibility for 20 years. Congress then placed the ever-broadening weather mission in civilian hands in the newly created Department of Agriculture, effective July 1, 1891, where it remained until 1940, when meteorology became a responsibility of the Department of Commerce, NOAA’s parent agency.

But after World War II, demobilized soldiers trained in meteorology found weather-related jobs scarce. Some, like John Wallace, created jobs for themselves.

Wallace in 1946 founded the granddaddy of the postwar companies, Weather Services Co. in Bedford, Mass., said Vice President John J. Maloney, who signed on shortly after. WSC’s first clients included New England towns in need of snow warnings. From the Gulf of Mexico came demands for specialized forecasts from the maritime industry and oil companies.

Newspapers, Broadcasters

Clients now include both the national and international editions of USA Today newspaper and scores of broadcasters. The company also supplied detailed wind reports to help the 1986 Daedelus project succeed in making a historic, 69-mile flight from Crete to the Greek mainland in a human-powered aircraft.

Another of the pioneers, 36-year-old Oceanroutes, grew from the observations of a Pacific route airline pilot who wondered why he saw so many ships sailing through avoidable bad weather. Oceanroutes, headquartered in Sunnyvale, Calif., now claims to save clients 20 hours a crossing.

As for Accu-Weather, it got its start in 1962 when a nearby ski resort asked a Penn State graduate student, Joel N. Myers, to forecast the best nights to make snow. Subsequent clients, said meteorologist Reeves, included school districts needing storm warnings, municipalities seeking to position snow-plow crews efficiently, businesses worrying about snow-choked parking lots--even a pheasant farm wanting warnings of heavy snow that might crush its coops.

It has taken some time for the largely entrepreneurial firms to see themselves as part of anything so grand as an industry, but this year a bloc of them formed a trade group in Washington to lobby for their interests and protect their turf.

“This is basically a new industry, only having come into its own in the last year and a half,” said Jeffrey C. Smith, executive director of the Assn. of Private Weather Related Companies. The group’s aim is to protect and enlarge the private domain, which Smith said should be growing much more rapidly than it is--especially in an era of governmental retrenchment. Weather-related jobs in the public sector have all but dried up, encouraging the more entrepreneurially minded graduates to create their own jobs.

“Most commercial meteorologists have been reluctant to attempt an increased role in forecasting, primarily because of the constant threat of government to provide specialized forecasting services,” Smith said. “Private firms do not know what service the government may choose to offer next for ‘free.’ ”

Yet, both government and the newer participants in applied meteorological science acknowledge their mutual dependence. As recently as 1986, the National Meteorological Center calculated that the National Weather Service accurately forecast only 59% of the year’s major storms and complained that outmoded government technology makes U.S. forecasting “about equivalent to that of Taiwan” and 15% less accurate than forecasts generated in Europe.

“Commercial weather companies have managed to put together data bases that are more extensive and more detailed than what the National Weather Service offices have,” said Michael R. Smith, WeatherData’s founder. Even 15 years ago forecasters worked from essentially the same observations, he said, “But that’s not an accurate premise any more.”

Data Sources

Besides the NOAA Weather Wire, compiled from reports furnished by the National Weather Service’s regional offices, WeatherData and its competitors get additional information and satellite pictures and graphics from other government agencies and such private companies as R-SCAN in Minnesota and Weather Service International in Massachusetts.

“We provide the tools used by meteorologists and other weather-sensitive people to do their jobs,” said Glickman of WSI, a company formed 10 years ago in consultation with NOAA. “We just provide data to others who want to use it. The National Weather Service now is out of the business of providing single-user-specific weather services. They won’t go on the radio. They won’t generate forecasts for the Los Angeles Times. And they won’t give data to a nuclear power plant. Or even to another government agency.”

(WeatherData today provides The Times’ forecasts and other meteorological information.)

Even the NOAA Weather Wire will soon be transmitted by a private firm, Contel ASC, a subsidiary of Contel Corp., a telecommunications company based in Atlanta. Contel will replace NOAA’s network of low-speed teletypewriter circuits with instantaneous satellite transmissions enabling subscribers to pick whatever part of the full report they need.

That development might mark a new chapter in the development of a partnership between government and private industry.

“In the early days there was a lot of pushing and hauling between the private and public sectors,” Murphy recalled. On the private side “some overzealous meteorological entrepreneurs probably overstated their capability,” he conceded--adding, however, that some in government also “felt they had a God-given right” to forecast weather.

“Now we have an excellent working relationship.”

The only cloud on the horizon, said Jeffrey Smith of the new trade group, is that “no federal policy delineates what should be provided by government as public services and what should be left to the private sector to provide as commercial products.” He cited the continuing effort by Rep. George E. Brown Jr. (D-Colton) to create a National Agricultural Weather Information System to provide forecasts for farm interests--”exactly what our members do!”

“Our basic position,” Jeffry Smith said, “is that the National Weather Service performs a viable public service--issuing weather warnings and collecting raw data. Those are inherently government functions. However, the National Weather Service, the Department of Agriculture and some other government agencies have the capabilities to do site-specific forecasting, and we believe that that should be the domain of the private sector.”

There’s weather enough to go around, said Michael Smith of WeatherData. “There should not be a rivalry,” he said. “We have complementary goals.”