Fleet Management

The Rise of Telematics: Why High-Tech Tracking Is Taking Over Fleet Management

June 27, 2017

Knowing your drivers well is not enough. Trusting drivers plus verification is the future of fleet risk management. Risk management has been the #1 issue in fleets the last several years – not cost! Telematics solved this dilemma and does so elegantly, inexpensively and positively. Drivers benefit in the end.

What is telematics, really? Telematics is a vehicle and asset tracking technology. Telematics make vehicles/drivers safer and more efficient. Telematics gives insights into location, behavior, and risks that were not visible prior. Understand time spent on the job vs. travel times, get maintenance alerts, see fuel usage, and obtain real-time data on bad driver behavior. Prove when staff arrived. Use it for real-time dispatching. Use it to avoid costly litigation.

One common need of all fleet managers is the need for efficiency. The operations and demands of each fleet are unique, but the need for achieving higher productivity levels at lower costs apply to both small and large enterprises alike.

Fleet managers must ensure that the fleet is efficient and safe while managing fuel costs and looking for ways to decrease their expenses. Expenses include fuel usage, maintenance, accidents, and idle time. All of these are trackable with telematics. Monitoring aggressive acceleration reduces fuel usage. Monitoring harsh braking reduces maintenance costs.

Fortunately with telematics, managing fleets and overcoming hurdles becomes almost a child’s play. By integrating navigation, routing, geo-fencing, vehicle diagnosis, two-way communication between vehicles, and other data that can help managers monitor and optimize fleet performance, telematics has proven to be an indispensable technology.

Perhaps, that’s the reason why adoption rates have increased. Fleets across all industries are finding that telematics is providing them with valuable insights that can help them minimize risks, reduce costs, and enhance their bottom lines. Telematics provides the perfect balance of tracking, security, and risk management. It will even catch a driver who ignores a check engine light and helps the fleet avoid costly repairs.

Let’s take a look at how and why telematics is taking over the fleet management world.

Fleet Size Dictates Telematics Needs

Fleet managers are beginning to understand the role telematics play in predicting trends and develop models that increase operational efficiency. The adoption of telematics solutions by commercial fleets is growing at a steady rate. A survey conducted in September 2016 by Bobit Business Media publications, asked a series of questions about the use of telematics by fleets. The survey showed that adoption rates increased significantly in the case of fleets ranging from 26 to 350 vehicles. However, it’s important to note that the size of the fleet usually dictates how telematics are used.

Medium fleets (100-399 vehicles) care about improving their productivity, decreasing fuel consumption, improving vehicle maintenance, and minimizing the risks of accidents.

Larger fleets (over 400 vehicles) have slightly different needs. Since most large fleets already have software in place that allows them to maximize routing, scheduling, and vehicle maintenance—they hope that telematics will help the decrease operating expenses and reduce the number of accidents.

Adoption Rates by Industry

Adoption rates for telematics are around 30-40% across all industries and continue to grow. According to the survey, the utility industry is leading the trend, with 78% of companies integrating telematics into their existing fleet management solutions, followed by delivery (55%,) service (49%,) and construction (41%).

Despite telematics being an effective way to reduce labor costs, maximize productivity, and enhance safety, some fleet managers are hesitant to implement.

Here are some of the top reasons they list when arguing against telematics.

Most Common Misconceptions of Telematics

  1. Telematics is about BIG BROTHER watching over bad employees.

In the old world of telematics, it did feel like big brother watching over. In the early years, productivity was the focus, not driver behavior. Managers would get reports after the fact and conversations would occur with drivers about their performance. The discussions were around taking too long of breaks, inefficient routing and wasted time. A driver momentarily speeding would give rise to a call into the boss’s office.

In the new world of telematics, the focus is behavior. Gamification has allowed drivers to monitor their own behavior real-time and make corrections immediately. Additionally, not all feedback is negative. Positive reinforcement is also an important element to telematics. The systems protect drivers by documenting arrival times, speeds and risky behaviors. These can be used to combat customer complaints that a driver didn’t show up or was driving recklessly.

   2. Telematics scare good employees away.

Once employees experience what telematics can do for them, they will wonder how they did their job without it. Telematics provides real-time routing information, verifies where drivers are supposed to be and when, reduces paperwork and manual tracking. It also increases safety. As noted in #1, it reinforces positive behaviors and can make it a rewarding experience through gamification.

  3. Telematics is complicated and difficult to implement.

Telematics systems have evolved. Most of them are easy to setup and install. The interfaces are easy to read and intuitive. Units can be self installed at no cost. User interfaces are logical and simple. There are no longer excuses. The alerts are customizable so you only receive the notifications you want: Ignore idle time, watch seatbelt usage and spending. Specific speeding alerts can be configured.

  4. Telematics is costly.

Telematics provides operational efficiencies and cost savings in the form of fuel savings, time savings from more efficient routes, reduced idling, and reduced maintenance costs.

Additionally, telematics focuses on driver behavior, which reduces the number of accidents. Customers are better served as well.

It could be argued that you can’t afford NOT to implement telematics. Here’s the thing: when the prosperity of your business depends on knowing where your vehicles and drivers are at all times and how safely they’re driving, you need technology like telematics that can help you keep track of everything. Fleet tracking allows you to reroute vehicles in case of unexpected traffic jams, locate broken-down vehicles quickly, and improve the way you’re running your business.

  5. I don’t have enough vehicles to justify telematics.

Technology is scalable. You don’t need to be a 300 vehicle fleet to justify these tools. The implementation is configurable to meet your needs. It is cost effective to implement regardless of your size. You’re setup is as simple as checking boxes or selecting options from drop-down menus.

We recently implemented telematics for a company that has four vehicles and one that has 80. It was almost exactly the same amount of work… not much!

  6. I don’t have the upper management support.

Upper management has a lot on its plate and probably doesn’t have the time to investigate every trend that arises in the fleet management industry. If you believe telematics can help your fleet, then you should make a strong case for it and present it to your management. Show them how this technology can help them decrease costs and increase productivity and, we guarantee, they will be more than interested in implementing it. Do a pilot and try it out!

According to the survey, 34% of fleets said that they were expecting to get a return within the first year of implementing telematics. Eventually, 43% of the companies surveyed said that they saw a positive return within the first year.

And it makes perfect sense if you think about it. When you have accurate and complex data about your fleet’s performance, you can carry out the necessary adjustments to increase cost savings on fuel, payroll, maintenance, and so on.

What are you waiting for?

It’s not an exaggeration to say that telematics will be installed on most fleet vehicles within two decades. After all, the benefits are more than evident: reduced costs, increased operational efficiency and safety, and access to critical data that can automate the decision-making process. With all these advantages, fleet management becomes simpler and more data driven.

Sure, you could continue to use cell phones to call your drivers to track them down OR you could look at your telematics dashboard and see all facets affecting your fleet.

Give it a shot!