Commentary | IT Matters

Improving Your Fleet With Telematics

Tags: Logistics I.T., Transportation

Bruce Horan is the Director of Telematics for Element Fleet Management, 800-665-9744.

Recent research shows that 20 percent of the North American fleet market has implemented telematics. While that number may seem low for a technology that’s been in the market for just over a decade, it is likely that the number will double to 40 percent within the next few years.

Telematics allow users to gain deeper insight and visibility into fleet operations, and can assist your company, regardless of industry or type of fleet, and can help you execute on scalable improvement plans, change driver behavior – which is key for return on investment (ROI) – and measure results.

Slow and Steady

So why aren’t more companies taking advantage of telematics? The truth is that the technology had a bit of a rocky start. Expensive hardware and program costs made a positive ROI challenging, and would-be early adopters were scared away as several telematics providers folded. But today, hardware costs are down as much as 300 percent, installations have been streamlined for cost and efficiency, and bugs and other technology issues are rare.

The telematics adoption timeline and the impact of the technology can be equated to other life-changing technologies, like the personal computer, Internet, and mobile phone. All of those took much longer than 10 years to gain traction and reach critical mass. However, in 2014, most of us couldn’t imagine conducting business without them.

Do you remember the time and effort it took to simply send a document for review and redline before email was mainstream? The same will likely be true with telematics and fleet management in a few years. A few years down the road, you’ll struggle to remember how you managed expenses and met customer expectations with little to no insight into what was actually happening out in the field.

The benefits of telematics include increased fuel savings, more efficient vehicle tracking and routing, and the ability to set a virtual perimeter for a real-world geographic area. For example, some of the biggest contributors to poor fuel efficiency are idling, hard acceleration, and speeding. Telematics can track these factors and provide fleets the quickest payback, with almost immediate results and cost reductions.

The technology also tracks risky driving behaviors such as failure to use seatbelts, speeding, harsh braking, and cornering, delivering a longer-term ROI in reduced accident rates and associated costs. Many telematics programs are evolving to cover driver safety, increased employee productivity and efficiency, route compliance, and improved customer service. Telematics can also assist with government-mandated and individualized corporate policy compliance issues.

In an era of analytics, telematics can take data and make it useful. For example, one national service provider implemented telematics to reduce the risk to their drivers and improve fuel performance. The immediate payback was a reduction in the company’s fuel expense by almost $3 million in calendar year 2013, and a reduction in their accident rate of 8 percent. What other technology can provide that level of return in such a short period of time? And now that the groundwork has been laid, the same company is focused on reducing its fleet size by two percent and its mileage by six percent – impacting the bottom line by an estimated $2.8 million annually.

Implementing telematics can help you increase your fleet’s productivity, improve your corporate risk profile, and reduce your fleet’s operating costs. It isn’t just a matter of installing technology in a vehicle. Telematics is a way of understanding the information the technology produces, and putting that information into action to better serve your company.