2018 has been a year of records in the logistics world. E-tailer juggernauts like Alibaba and Amazon both set new traffic and sales records in their respective promotions, namely “11.11” and “Amazon Prime Day.” Alibaba racked in more than $30.8 billion in sales on its shopping day, while Amazon brought in $4.19 billion. It is clear that e-commerce is more popular than ever and showing no signs of slowing down. As a result, demand for logistics and transportation services is sky-high.
So, the logistics world must be merrily raking in the dough, right? Unfortunately, the story is a bit more complicated. Anyone with a stake in the ground transportation sector knows that there is a major barrier that carriers are facing in reaping the monetary benefits of the swelling demand for transportation.
The driver shortage
The truck driver shortage is a problem that has been on the radars of logistics community members for years. With a limited — some might say, dwindling — supply of qualified truck drivers available in the U.S., there is a resultant tangible damper on companies’ abilities to meet demand from merchants and shippers who need ground transportation to get their products in the hands of consumers.
Why is the industry meeting a roadblock when it comes to finding qualified drivers? One of the factors that industry experts point to is the recent implementation of electronic logging devices (ELDs) into trucking operations, which have significantly changed the game for truckers.
What are ELDs?
ELDs were initially mandated by the U.S. Federal Government as a measure to prevent truck drivers from incorrectly logging their hours, which is a long-standing practice of truckers driven by a pressure to complete trips as quickly as possible. The unfortunate result was an abhorrently high rate of crash-related deaths caused by drivers falling asleep at the wheel due to lack of sleep. This number has only escalated in recent years. ELDs were meant to solve this problem by forcing drivers to be honest about their hours.
After their initial inception, ELDs have since evolved to provide other benefits to carriers such as data collection. There are countless ELD-hardware manufacturers that offer devices that can collect all kinds of data, like GPS-location, date, time, engine hours, engine condition, and vehicle miles.
Such data can be collected by blockchain-based platforms and utilized by carriers to identify areas of disruption, so they can better plan trips, avoid delays, and ultimately, optimize operations.
As I discussed it in an interview with radio show personality Dave Nemo: “... having all this data available, being able to use it and analyze it so we can show… if you take a different route based on the weather and based on the wind, there’s more fuel efficiency or there are fewer potholes in this road, so there’s less likely to be damage to a shipment for instance.”
By using valuable data that is now readily available and manipulatable, carriers have the ability to optimize their networks and operations to become more efficient. Sounds great, but with every seemingly fool-proof innovation comes a problem or two to reckon with.
A possible deterrent to entrants
Although amicable in their original intent, the devices have had a mixed reception. While the data-collection aspects provide some major benefits to carriers, they have been controversial amongst drivers, who perceive the devices as an invasion of privacy. Industry analysts have suggested that this could be a contributing factor to the highly speculated disinterest from the younger generation in truck driving as a career, which is perpetuating the current shortage of drivers.
However, there is an argument to be made that technology is actually more of a friend to drivers than to their employers; the devices don’t just hold drivers accountable for their performance, but the company accountable to the drivers, as well.
Shifting the narrative
The data-collecting abilities of ELDs have been recognized for their potential benefits to carriers, but they can also be a boon to drivers in instances where they are blamed for disruptions to shipment delivery schedules.
Let’s say you're a truck driver who has racked up thousands of driving miles and you've done it all in a safe way; you're always on time and you have a perfect record. In the event that you want to ask for a raise or seek employment at another company, you can say, “Here's my entire history. I think I deserve a little bit more than the fifty-three cents a mile that you're offering.”
Truck drivers will be the first to tell you that they often get blamed by carriers for kinks occurring in the supply chain, but the truth is, it is rarely the fault of the driver. While ELD devices were initially perceived as invasive to drivers, they could instead prove to be a way to shift accountability back onto the parties that are responsible for any supply chain disruptions that occur en route.
As blockchain-based platforms and devices like ELDs continue to become further integrated into trucking operations, perhaps their negative perception with drivers will fade once drivers realize that they can serve as a benefit rather than a detriment. It’s anyone’s guess if that theory will ever come to life, but one thing that we know for sure is that only time will tell.