How Blockchain Data Will Help Truckers Stay HOS Compliant and Remain Competitive

ELD Mandate & HOS Regulations

The coming year is set to be the second since the Electronic Logging Devices (ELD) mandate went into full effect at the end of 2017.

The ELD mandate was designed to ensure enforcement of the Hours of Service (HOS) regulations enacted by the Federal Motor Carrier and Safety Administration (FMCSA).

Unfortunately, carriers refusing loads that would jeopardize HOS compliance led to a shortage in available capacity.

With 2019 underway, I'd like to take a moment to consider the impact of changing HOS regulations and the value blockchain can offer in navigating said changes.

FMCSA Announced a New Rulemaking Period for HOS Changes

Following a petition by the Owner-Operator Independent Drivers Association (OOIDA) and requests from Congress, the FMCSA is preparing to take public requests and comments on the rules surrounding the HOS regulations.

While new changes could relieve companies struggling with the 30-minute rest break requirement after eight hours of driving per day, they allude to a trade-off.

Instead of merely allowing a change to the HOS rules, the FMCSA is looking at ways to require more work in the form of documentation.

It is important to note that the ELD mandate is not being pared back, so any change will naturally fall under the need to track and manage digital data.

Digitalization of trucking is the only solution for truckers regardless of how the HOS rules evolve.

Blockchain Data Ensures Accurate, Real-Time Reporting, Tracking

Increased focus on HOS regulations begs the question: “what can truckers and carriers do to ensure compliance?”

For one, they will need to increase visibility into the hours logged. The ELD mandate means data will be available, and the application of this data is the solution to maintaining compliance. That said, data integrity and quality remain key concerns.

In a recent interview on the Road Dog Trucking Show with Dave Nemo, I had the opportunity to discuss the role of blockchain in aiding truckers with recordkeeping. Considering the integrity of data affects the success of the HOS regulations, the use of blockchain will have a profound impact on shippers and carriers alike.

For instance, Blockchain technology, thanks to its incorruptible ledger, will eliminate concerns over malicious or unintentional changes to ELD data could result in the assessment of penalties, up to and including an out-of-service (OOS) designation for drivers that violate the rules, as well as civil and criminal charges. No trucker wants to be placed OOS for an error.

Less Time Doing Back-Office Processes Equals More Time to Drive

In addition to managing HOS regulations, the application of blockchain for truckers will result in less time spent managing back-offices. Even though truckers primarily operate on the road, they often have a mountain of other responsibilities to maintain as well.

They must pay taxes, consider payments from carriers, negotiate loading times with shippers, handle maintenance and so on. The list is endless. Instead of trying to manage everything with Excel, or worse, a handwritten ledger, they could turn to blockchain which will simplify processes.

Blockchain's incorruptible design allows for a 100% accurate account of trucker activities, including HOS adherence, maintenance costs, billing, tax preparation, and freight pickup.

Smart Contracts, Proper Scheduling, and Timely Payments

Blockchain will empower truckers through smart contracts, ensuring proper scheduling and timely payment.

Truckers could connect existing systems for managing the back-office process to blockchain-based platforms to integrate driving data with tax deductions and business costs. With 90% of trucking housed in private fleets of fewer than 20 truckers, this will be a significant change.

Blockchain will bring end-to-end visibility and accountability. Carriers can hold contracted truckers liable for violations and ensure compliance with contractual terms. Integration with notification systems will reduce reporting and time lost trying to schedule pickup and drop-off.

The opportunities for improvement are endless, and blockchain’s ease of use will lead to better, more cost-effective and faster management of back-office processes for trucking enterprises and small businesses.

Where Do I See The Trucking Industry Going?

Forward. The industry is moving forward, working to isolate problems and achieve maximum compliance. At the same time, truckers want a faster and more natural way of managing their businesses and schedules. The blockchain is the solution, and it will build better carrier-trucker relationships.

Regardless of how HOS regulations evolve in the coming year, blockchain's potential will only expand, especially among public platforms.

That's why ShipChain is developing a public platform, enabling trucking companies of all shapes and sizes to take part in the end-to-end visibility revolution. I'm committed to bringing more traceability and accountability to the industry, thereby easing the jobs of those moving our livelihoods, necessities, wants, and desires, across the roads of the nation and countries abroad.

John Monarch, CEO of ShipChain

Entrepreneur, Blockchain Expert, Consultant, Writer, Speaker

John Monarch builds, advises, and consults for businesses. A graduate of Clemson University in Physics and Computer Science, he is the founder and CEO of ShipChain & Direct Outbound - two of the fastest growing fulfillment and e-commerce logistics companies in the United States. He is an avid investor, advisor, and enthusiast in Blockchain technology. John resides in Greenville, South Carolina, one of the fastest growing cities in the United States.

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