How telematics can benefit commercial fleets

Mechanic showing installed dashboard camera to customer

KEY HIGHLIGHTS

Managing vehicles can present a unique set of challenges. For example, the frequency and severity of commercial motor vehicle crashes has drastically increased in recent years.
Telematics refers to technology that organizations can use to gather data regarding drivers, individual vehicles or an entire fleet.
Telematics can help businesses in many industries lower costs and improve overall safety and efficiencies.

For many businesses, managing vehicles is a key element of their operations, and these logistics can present a unique set of challenges. For example, the frequency and severity of commercial motor vehicle crashes has drastically increased in recent years. According to the Federal Motor Carrier Safety Administration, the number of fatal crashes involving large trucks and buses has gone up by 42% since 2009. Furthermore, businesses must also contend with ongoing safety issues (e.g., distracted and impaired driving), traffic violations, driver shortages, medical expenses and vehicle repair costs.²

Telematics is a broad term that refers to technology that organizations can use to gather data regarding drivers, individual vehicles or an entire fleet.

In this challenging environment, businesses with fleets are continually looking for new ways to improve safety and reduce their exposures. One solution that more and more businesses are turning to is telematics. Telematics is a broad term that refers to technology that organizations can use to gather data regarding drivers, individual vehicles or an entire fleet. Specifically, businesses that leverage telematics can track information related to a vehicle's location, driver behavior, vehicle diagnostics and similar operating metrics.³

Telematics can help businesses lower costs and improve overall safety and efficiencies. And these benefits aren't limited to the transportation industry. Any business that manages a fleet of vehicles could benefit from telematics, including those in the agriculture, manufacturing and construction sectors.

How telematics works

Put simply, a telematics solution promotes the sharing of data between a fleet of commercial vehicles and a central location. Typically, data is gathered using telematics devices - such as GPS technology, sensors, mobile applications, dashcams and vehicle engine diagnostics solutions - that are used or installed in each vehicle in a fleet.³

These devices gather helpful insights regarding driver behavior, trip information and vehicle health, storing the data temporarily before transmitting it back to a central hub where a business can analyze it using software. Telematics devices can gather a host of useful information on a business's behalf:

The speed of a vehicle
The location of a vehicle
The movement patterns of a vehicle
Instances of aggressive acceleration, hard braking and erratic cornering
Distracted driving incidents (e.g., smartphone usage)
Diagnostics data related to fuel efficiency and vehicle performance

Telematics solutions are incredibly versatile and can be deployed in cars, cargo vans, tractor-trailer units, buses, heavy equipment and specialized vehicles such as construction and farming equipment.

Benefits of telematics

Telematics can benefit a business's operations in many ways⁶:

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Improved safety

Not only can motor vehicle accidents endanger the health and well-being of drivers, just one crash can significantly impact a business's bottom line. The severity of insurance claims as well as the cost of medical treatment and vehicle repairs are all on the rise, making it all the more important for fleet managers to make accident avoidance and driver safety a priority. Telematics can help organizations of all sizes better protect their employees by monitoring driver behavior and vehicle performance. It can also detect unsafe driving practices (e.g., excessive driving speeds or hard braking) and allow fleet managers to personalize driver coaching and even send immediate in-cab alerts to correct dangerous behaviors in real time. This information can lead to fewer accidents and insurance claims, making businesses a more attractive risk to insurance companies.

Increased productivity

By knowing the exact location and status of its vehicles, a fleet manager can make real-time business decisions. For example, businesses can reroute vehicles to avoid heavy traffic or deploy additional vehicles to a job, thus increasing productivity. This is particularly beneficial for smaller fleets, as one vehicle often represents a larger portion of the overall business. This means that one driver's productivity can have a significant impact on an organization's bottom line.⁷

Improved vehicle maintenance

Telematics can provide businesses with invaluable information related to mechanical issues with their vehicles and equipment. For instance, diagnostic devices can flag an engine fault code, allowing businesses to investigate the issue before it becomes a bigger concern (e.g., the vehicle becomes nonoperational, leading to downtime and lost revenue). When used as part of a larger preventive maintenance program, telematics streamlines the upkeep of a fleet and ensures organizations have access to functioning vehicles. Moreover, poorly maintained vehicles are more likely to break down and create potentially unsafe scenarios on the road. Strong vehicle maintenance practices can prevent this, which, in turn, can protect drivers and reduce the likelihood of potential accidents.

Improved fuel efficiency

Fuel is a significant expense for fleets, and telematics can help businesses operate more efficiently. Telematics gives businesses the functionality they need to better plan their routes, reduce engine idling and notify drivers of excessive speeds. Cost savings such as these are critical for both small and large fleets.

Quicker response to accidents

Because telematics devices can provide location data, fleet managers can mobilize emergency help to a driver's location in the event of an accident. Some solutions can even alert insurance carriers of a collision, which can jump-start the claims process and help businesses get their vehicles back on the road in a timely fashion. Additionally, should an incident occur, footage from cameras installed on the vehicle can help recreate an accident, which can help settle claims and litigation quickly and accurately.

Reduced administrative costs

Some telematics solutions can digitize expense reports, driver performance, maintenance reports and fuel expenses, promoting more accurate and easily trackable recordkeeping. These functions help businesses save time and money. Automating administrative functions can also be particularly valuable for smaller fleets that lack the dedicated resources of larger ones and could benefit greatly from a less manual approach to data entry and record-keeping.

Considerations to keep in mind

Telematics offers businesses an unparalleled amount of data. While this is one of the biggest strengths of these solutions, it's also one of its greatest challenges. Insights gathered from telematics are just that - insights. The data is useful only if a business leverages it in meaningful ways. In some instances, businesses that implement a telematics solution may be overwhelmed by the sheer amount of data and unable to use it effectively. However, not all telematics solutions are overwhelming. Many modern telematics solutions are designed to be easy to implement, ensuring businesses are not overtaxed by the technology. Telematics solutions can fit various needs, from the smallest businesses to the largest trucking companies.

The organizations that best utilize telematics solutions are the ones that adopt and integrate them into their operations in ways that meet their individual needs. They use the functionality and data from telematics to make operational changes, focus on improving driving behavior and increase productivity.

KEY TAKEAWAYS

Telematics solutions are incredibly versatile and can be deployed in many different types of vehicles.
From improved safety to increased productivity, telematics can benefit a business's operations.
Telematics offer an unparalleled amount of data, but it's useful only if leveraged in meaningful ways.