Double Trouble: Driver Shortage and Pipeline Hack Roil Oil & Gas Sector
LaneAxis shareholder & oil industry vet explains how a Direct Network can mitigate unforeseen mayhem
The U.S. Oil and Gas sector has been in the news recently for all the wrong reasons.
On May 7, Colonial Pipeline — which carries nearly half of the fuel supply on the East Coast — fell victim to a cyberattack that forced the company to shut down approximately 5,500 miles of pipeline. Panic buying ensued, with an estimated 80% of gas stations in Washington, D.C. alone running dry the very next day. Colonial reportedly paid nearly $5 million in ransom to the cyberattackers in order to resume operations. More than a week after the hack, many gas stations were still reporting significant fuel shortages.
In an unrelated development, just days before this major security breach, news outlets across America blared out stories predicting the possibility of major gas shortages this summer because of a sudden lack of qualified drivers to haul fuel from refineries to gas stations.
As it was explained, the demand for drivers took a hit when pandemic-induced lockdowns triggered steep declines in the gasoline market, and tanker drivers opted for other jobs. Complicating matters is the fact that tanker drivers are a somewhat rare breed. In order to be certified, tanker truck drivers must obtain a commercial driver’s license, complete a four-week course, as well as 160 hours of training. As truck driving schools remained shut down, the pipeline of new drivers prepared to replace retired drivers also dried up.
LaneAxis Shareholder Roger Goobie is an Oil and Gas professional who has been in the industry for the last 26 years. He’s been involved in system operations and understands the need to optimize shipping both on land and at sea. We asked Roger to share his thoughts on these recent high-octane stories, and how the LaneAxis Direct Freight Network might have softened the blow — if not solved — these missteps.
Q. From your view, what went wrong with the Colonial Pipeline shutdown?
A. My take on this is that it has to do with IT security vulnerabilities and the need to strengthen barriers along these lines. This will always be a risk and that cat and mouse game will go on “forever.” That being said, if this were to happen again and another disruption takes place there will be a need to increase transportation from storage facilities to gas stations for public consumption. LaneAxis will have the ability to send push notifications to all qualified drivers/truckers in its database to start connecting the right drivers to suppliers at the push of a button. This will in effect help with the immediate surge and fill the demand using a “Just in Time” approach. Certainly much better than what is available today. This issue also ties into the security aspect where LaneAxis can provide some level of assurance that Drivers are properly screened to reduce criminal and/or malicious harm, since they can be Geozoned to facilities to determine proximity to Government and other Public and Private facilities.
Q. What about the separate — but equally concerning — story about gas shortages this summer due to a lack of qualified drivers?
A. There is no shortage of gas that I am aware off on the horizon. The spike seems to be as a result of supply and demand issues related to pickup and dropoff because of the few qualified Hazmat drivers available at present. This situation has created a bottleneck in the supply chain. Although this is essentially an artificial supply issue, the price will spike at the pump where this condition exists across the nation. LaneAxis has the unique advantage of creating a database of registered and qualified drivers which can be made available at the click of a button. I can see the LaneAxis platform being the LinkedIn (rolodex) equivalent for the Transportation Industry to connect TRUSTED Drivers (of any qualification) to Shippers.
Q. Why did you invest in LaneAxis?
A. I invested in LaneAxis since I understand the power of the underlying Smart Contract and Blockchain Technology and the efficiency gains, benefits and savings it can bring to the supply chain. I occasionally see people questioning the premise of what LaneAxis has to offer without first educating themselves on what problem is being solved and on the technology that is being used to solve it.
Q. Recent news items aside — How can LaneAxis benefit the oil and gas industry?
A. In my humble opinion Smart Contracts and the underlying technology has the potential to reduce the Days Sales Outstanding (DSO) and create a Just-in-Time payment system to reduce the paperwork and all the administrative backend bogging down the current process. Companies lack the understanding of the Invisible Lost Time (ILT) involved in getting things processed since it is not properly measured. If a process is not visible, you can’t measure it and put it on a dashboard to determine the efficiency of that process. The result is it will get done as it always has and no improvement can be made. Having a proper process with clearly written contract language on a Smart Contract, using upfront agreed upon milestones and a programming language with the logic to verify when these milestones are met for payment is critical to Oil and Gas but also other industries.
Q. Is there anything else you would like to address that you think would be of interest to the LaneAxis community?
A. Yes. LaneAxis is doing a great job trying to educate the end users. However, most of the end users are not in tune with the technology and how it can work to benefit them. When Drivers and Suppliers experience the power and relative simplicity of the platform, massive word of mouth will trigger a “network effect” where all sides are almost compelled to use the system. Once Shippers and Carriers go through a couple of cycles on the system things will start moving very fast for LaneAxis.
To learn more about the LaneAxis blockchain-backed Direct Freight Network visit startengine.com/laneaxis.