About the company 

NET Offset is a company focused on commodity trading. Commodity traders buy raw materials and sell them at a profit as commodities, unlocking arbitrage opportunities through transportation, storage, and processing. However, traders often lack visibility into how their supply chains could be structured to capture synergies and maximize arbitrage opportunities. NET Offset’s work began with physical agricultural commodities in Africa, where they structured biomass supply chains. They used an optimization model to integrate all possible supply and demand data in order to produce a logistics strategy across multiple selected trades, increasing profits by an estimated 5% while reducing GHG emissions by 15% through optimized logistics. Building on this successful entry into commodities markets, the NET Offset team redirected their efforts toward the United States, with a focus on financial energy markets.

About the solution

NET Offset employs various modeling techniques at the forefront of recent developments in artificial intelligence. For physical supply chains, NET Offset uses an optimization model to determine the optimal transportation, processing, and storage strategy to fulfill potential trades. Traders benefit from unprecedented insights into the transactional costs embedded in each arbitrage opportunity. The model selects where to purchase raw materials, when to store them, how best to transport them between markets, where to process them, and when to sell them to industrial buyers, all while ensuring the strategy does not exceed a value-at-risk metric. By capturing logistics synergies across multiple trades, the model eliminates waste from the supply chain, enabling trading firms to simultaneously enhance their bottom line and mitigate climate change.