Written by John Monarch, chief executive at ShipChain. This is one in a series of periodic guest columns by industry thought leaders.
Shippers are cold-calling regional carriers, carriers are poaching drivers, and drivers are negotiating from a position of unprecedented power.
It’s a seller’s market for everyone involved in freight and logistics – except shippers, of course – and that’s precisely why we need to convert this momentum into tangible improvements to the trucking industry. One great way would be to use blockchain to reward good drivers and empower carriers to make smart hiring decisions.
The labor market is too distorted by the current supply/demand mismatch for the information currently found on driving records to sufficiently inform hiring decisions. Too much of the hiring process is based on gut intuition. We need better insight and visibility into performance.
Enter blockchain. This new technology allows drivers to collect and control nuanced data about their driving and then present it to employers in a provable format. Instead of consulting a sheet of paper, hiring managers can examine an incorruptible record of a candidate’s driving history that is stored on, and accessible through, the public blockchain. If candidates are good drivers, they should be able to advertise that fact. If there are red flags, carriers deserve to know.
Let’s use this opportunity to enact better hiring practices and give the most qualified truckers a reason to work for the best carriers, while giving the best carriers access to the most qualified truckers.
How it could work
Here’s the scenario: Two drivers with objectively stellar records apply for the same job opening. Only one of them has consistently made on-time deliveries, avoided hard braking events while driving, made more fuel-efficient decisions and maintained electronic log compliance.
Blockchain provides a way to distinguish between these two drivers and hire the one with better performance.
Using a blockchain-based platform, sensors on the truck can securely feed complex data into a central database that the driver – and only other privileged parties – can access and use to show that he’s got a great on-time record, that he’s not causing delays and that he’s driving safely. A driver’s ability to demonstrate his value commands a premium during hiring negotiations. An employer can justify paying a better salary because the driver’s strong performance will ensure that customers get their deliveries in expected conditions and on time.
Blockchain empowers managers to pay drivers what they are really worth. It creates a mutually trusted record that incentivizes better performance and eliminates gaps in data that allow bad drivers to slip through the cracks.
Let’s drill down a little and see how that could work on a decentralized blockchain platform. Most trucks have a variety of sensors that log speed, waypoints and route tracking, braking and fuel efficiency, hours of operation, and much more. Data from these sensors are currently sent to third-party vendors that analyze the information and feed it to carriers. A blockchain-based platform can compile these disparate data streams into one secure database that drivers, or anyone else with permission, can access. Collecting and encrypting this data on a blockchain platform lets drivers take ownership of their own information.
By linking with their telematics and history on a platform, drivers can show their log compliance and record of safe driving, no hard braking and no sudden lane changes. Employers look for these indicators, but they aren’t found on driving records.
It’s easier than it looks
This might sound like a hard sell. Truckers are notoriously private. But it’s a matter of what data is shared and who controls it. If a driver controls his own data, it becomes more relevant to drivers and their employers. It functions as an additional indicator of good performance, like a high customer rating at a restaurant.
Blockchain technology also allows drivers to keep their data hidden from non-permissioned parties. They can control who sees it, which addresses any privacy concerns they might have. Billions of dollars in transactions later, nobody has successfully hacked blockchain. That means drivers’ records are secure. If this important fact is effectively communicated, it should be obvious that there’s no risk in signing up for something that gives good drivers such a clear advantage. And because most drivers are skilled professionals who would love nothing more than to communicate their value to the market, the demand should be clear.
The tendency to pad resumes works against job seekers as much as it hurts employers by making it harder to negotiate in good faith. The only people who win in these cases are those who fudge the books. But with billions of dollars of goods in transit and the safety of drivers and other passengers on the line, the industry has an obligation to embrace technology to promote and reward safe and reliable driving. The first people to benefit will be the drivers themselves.
With driver salaries rising by more than 10 percent annually, truckers who work for a private fleet are commanding a median annual salary of $73,000, according to the American Trucking Associations. The resulting labor shortage is attracting a wave of unqualified drivers to the workforce. Seasoned drivers are increasingly looking for ways to distinguish their skills. And while other professions can point to resumes that show specific accomplishments, drivers don’t have this luxury.
Blockchain can help them demonstrate their value like never before, allowing them to point to optimal turnaround times and driving records.
Editor’s note: John Monarch is chief executive and co-founder of ShipChain, a blockchain startup focused on the freight and logistics industry. He is a serial entrepreneur with multiple previous ventures and has a background in physics and computer science.