What is telematics? Everything you should know

What is telematics? Everything you should know

Telematics has had a considerable impact on contemporary businesses — most notably in the trucking and transportation industry. Modern-day fleets can now be much more efficient by relying on the data and insights provided by telematics, which can help them make better, more informed business decisions.

A telematics system and fleet management software can help fleet managers and decision-makers improve their day-to-day workflow, so they can work smarter, faster, and with fewer problems.

In this post, we will discuss the following topics:

What is telematics?

Telematics is the process of transmitting information remotely over long distances. Today, telematics is being used in a wide range of industries for both commercial and non-commercial purposes.

Telematics is the blending of two science disciplines: telecommunications and informatics. “Telecommunications” refers to remote means of communication, and “informatics” is the practice of information processing.

The word telematics didn’t even exist a decade ago. Today, telematics is critical to successful fleet operations.

With the rise of the internet and communication over various networks, the field of telematics has gained immense importance. By transferring data remotely and increasing visibility into operations, telematics has helped various industries improve communications, efficiency, and customer service.

What is fleet telematics?

In the trucking industry, fleet telematics is employed to gather data using a combination of GPS technology, sensors, and on-board diagnostics codes. The gathered data generally includes vehicle location, driver behavior, vehicle activity, and real-time engine diagnostics. The technology is managed on software platforms that help fleet owners manage their assets remotely.

A fleet telematics system usually consists of two components:

  1. The GPS tracking device itself, which is generally installed in the vehicle’s on-board diagnostic port, and
  2. The fleet communication software system, most often located at a dispatch center or fleet manager’s office.

Within the trucking industry, fleets install telematics devices and accompanying fleet management software to collect and transmit a broad range of information. That information can comprise many different items including:

This information provides in-depth insights across the entire fleet. Fleet managers can use these insights to help identify at-risk drivers, improve fleet safety, minimize fuel waste and operating expenses.

They can also use this telematics data to monitor their assets for timely delivery and to preemptively identify vehicle maintenance issues to keep productivity high.

How does telematics work?

how telematics works

The following infographic explains how data is transmitted remotely via telematics.

The telematics device is generally connected to the vehicle’s onboard diagnostics port with a SIM card, and a modem allows communication of the collected data via a wireless network to a central server. The server then reads the data and displays it on the other end through a secure website, either on a computer or mobile application. This enables the end-user, such as a fleet manager, to interpret the data and take any appropriate actions.

How are telematics devices installed in trucks?

Some telematics devices are plug and play, while others require engineers and support staff to install and set up.

The power requirements of the telematics devices also vary. They can be either battery-powered or powered by the internal electrical system of the vehicle.

How can my fleet use a telematics system?

Fleets of all types and sizes can use and benefit from a telematics system.

Telematics data is designed to empower fleet managers and administrators to have the ability to solve unique business challenges and make data-driven decisions.

It provides valuable information on the location of each vehicle or asset, which can help:

  • Fleets gain visibility into operations
  • Increase efficiency and productivity
  • Prevent vehicle theft
  • Provide better delivery estimates to clients
  • Increase customer satisfaction and potentially save thousands of dollars

8 benefits of a telematics system

With advanced telematics systems and telematics data, fleets may be able to simplify operations, driver management, and get a much better return on investment (ROI).

Here are 8 big benefits of telematics for fleets of all types and sizes.

1. Increased efficiency and productivity

Telematics for fleet management allows for real-time vehicle location tracking through GPS. With the help of real-time vehicle monitoring and location history, fleet managers can identify the best and most efficient routes that can speed up deliveries and minimize fuel expenditures. Routes can also be identified to improve road safety.

Apart from GPS tracking, geofencing also can also play a key role in increasing efficiency and productivity. Geofencing not only allows for tracking performance against delivery schedules, but it can also be used to reduce detention time. Driver detention at shippers and receivers can cost up to $1,280 per driver per year, on average.

The KeepTruckin fleet management solution offers Facility Insights. It allows you to see the average dwell times of 60,000+ warehouses to help optimize your pickup and drop-off times, help minimize driver detention, and increase productivity.

2. Reduced fuel wastage and operational expenses

By smarter route planning, you can reduce fuel usage and save money. It can also help cut down on tracking vehicle idling and identifying drivers who idle for too long.

Some fleet management software can automate idle tracking and present vehicle utilization rates for each driver in the fleet. You can rank drivers by utilization rate and identify who needs coaching.

Fuel is often one of the biggest expenses for most fleets. By monitoring idling across your fleet and identifying drivers who need coaching for idling the most, you can significantly cut down your operational expenses.

3. Better payroll management

Fleet managers can automate employee records and streamline payroll management. Automating helps ease administrative and clerical work and minimize errors.

It becomes easier to calculate payrolls when you know exactly how far and for how long each vehicle was driven.

4. Improved safety

Safety is a top priority for fleets of all types and sizes. Even a small collision on the road can potentially cripple a business.

According to the FMCSA:

Modern-day fleet management software and telematics systems can be designed to focus on improving driver behavior and increasing road safety.

As driving behavior data is collected, fleet management software can rank drivers based on a safety score. This may help safety managers identify drivers with the worst- and best-performances across the fleet. Fleet managers can use this information to identify drivers who need coaching and improve the overall level of safety across the fleet.

Nowadays, a good telematics system can enable safety managers to access dash cam data remotely and recall video footage for a specific period. With the help of dash cam footage, conversations during driving coaching sessions can be based on evidence instead of assumptions.

5. Driver exoneration

Driver telematics is an important component of a good fleet telematics system.

According to data shared by the American Trucking Association (ATA), passenger vehicles are at fault in 80 percent of car-truck collisions. But without any evidence, fleets have no way to exonerate their drivers when they are not at fault.

Dash cam footage can change that.

Video footage recorded by a dash cam is almost always admissible in court, and fleets can use the footage to exonerate innocent drivers and save the company from massive potential liabilities.

A driver from Nybll, a 15-vehicle fleet that operates in California, was involved in a collision that could have cost the company up to $500,000. Nybll had the KeepTruckin Smart Dashcam installed in their vehicles, which helped them exonerate the driver.

Here is what Kevin Thibeault, the owner of Nybll, says about the incident:

“A few months after we installed KeepTruckin’s Smart Dashcams, we were involved in a collision. If we were sued, it would’ve probably cost us half a million dollars, minimum. But because we had video proof, we were exonerated.”

D&A McRae Transportation is another fleet that exonerated its driver with the help of footage recorded by the KeepTruckin Smart Dashcam. Rod Conrad, the Terminal Manager with D&A McRae, says, “We would have immediately been deemed to be at fault. Footage from KeepTruckin’s Smart Dashcam exonerated our driver and saved us what could have been close to $50,000 in damages. From this one incident, the Smart Dashcam paid for itself.”

6. Proactive vehicle maintenance

One of the biggest benefits of telematics is the ability to identify vehicle maintenance issues remotely and report them to relevant departments via real-time alerts.

Through automation, fleet managers can also schedule preventative maintenance after taking into account Hours of Service information.

According to the CVSA International Roadcheck 2019 results, 16,347 vehicles were placed out of service that year. That was 24.37 percent of the total inspections conducted. The top three out-of-service vehicle conditions were:

  • Braking systems (28 percent)
  • Tires and wheels (19. 3 percent)
  • Brake adjustment (17. 1 percent)

With advanced telematics, you can catch many vehicle maintenance issues early with vehicle fault-code detection and real-time alerts. This can help you identify potential vehicle issues faster, prevent critical violations, safeguard CSA scores, and potentially save thousands of dollars.

7. Automated IFTA reports

Calculating IFTA fuel tax reports is an administrative burden that eats up dozens of hours every quarter. Telematics and fleet management software can automatically calculate the distance traveled and fuel purchased in each jurisdiction for each driver in your fleet.

Automated IFTA calculation can not only improve operational efficiency and ease your administrative burden, but it can also reduce the chance for human error and minimize audit risk.

Learn everything you need to know about IFTA and how to calculate IFTA reports quickly and efficiently.

8. Streamlined communication

Fleet management software allows for more streamlined communication between drivers and back-office staff. Better communication, along with accurate vehicle location tracking and geofencing, can help you provide better delivery estimates to your customers and keep them happy.

In a competitive trucking industry, customer service is often the most important aspect of the business. Real-time vehicle tracking and streamlined communication with drivers can help you gain a competitive advantage.

How much does telematics cost? 

Figuring out the cost of a telematics system is a relatively straightforward process. You may pay for the cost of the device, installation, and a monthly subscription fee. You’re essentially paying for valuable information, such as vehicle data and insights that you would otherwise not be able to glean.

Many telematics systems currently on the market have reasonably clear-cut costs that you can evaluate.

Telematics device cost variables

The first variable is the cost of the device itself. Depending on the size of your fleet, you may be able to find quantity discounts.

The cost of the device largely depends on the type of device you choose.

Some telematics devices transmit data in real-time, while others transmit at a predetermined interval, such as every hour or half-hour.

A device that transmits in real-time is a smarter device that has more complex technology built-in. One of the more important benefits of telematics is the ability to get real-time data and act on it almost instantly. Opting for a lower cost device that transmits data only at certain intervals diminishes that benefit of being a proactive fleet manager with real-time visibility into fleet operations.

Telematics installation costs

The next factor affecting the overall cost of the telematics system is installation. The best devices are plug-and-play and can be installed quickly and easily into the vehicle diagnostic port. Installation costs can be as low as zero.

Other devices may require a technician to install. If you choose a device that needs to be hard-wired or retrofitted, installation costs will be higher.

Monthly subscription fees

Finally, the monthly subscription fee will determine the total cost of your fleet telematics system. The information provided by your system is critical to optimizing operations and lowering the cost of doing business, so it’s very important to choose a service provider that is highly rated and very reliable.

It is possible to find cheaper, less expensive solutions, but they may not come with customer support and features that help streamline your business and simplify the fleet management operations.

With telematics data, you can make data-driven business decisions, which can easily lead to a positive return on investment.

The future of telematics

Telematics in trucks is quickly becoming an essential component of trucking and transportation businesses. Many fleets have acknowledged that the system can pay for itself in savings elsewhere.

The adoption of telematics is more widespread every year.

The trucking industry is evolving with the introduction of Electronic Logging Devices and the ELD mandate. There is also a renewed focus on technology and safety.

Fleet management software and telematics devices will continue to play a major role for fleets looking to gain a competitive advantage. After all, telematics data can help you become a more proactive and efficient fleet administrator.

To discover how the acquisition of telematics can benefit your fleet and business, give us a call at 844-325-9230.

You can also request a free demo of the KeepTruckin all-in-one fleet management and telematics solution and experience the benefits firsthand.

Disclaimer: All content and information on this website is for informational and educational purposes only, does not constitute financial, business, or legal advice. Although KeepTruckin strives to provide accurate general information, the information presented here is not a substitute for any kind of professional advice, and you should not rely solely on this information. Always consult a professional in the area for your particular needs and circumstances prior to making any professional, legal, business and financial or tax-related decisions.

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