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What is telematics and how can it benefit your business?

What is telematics and how can it benefit your business?

Telematics has had a significant impact on numerous businesses — especially in the trucking and transportation industry. Modern-day fleets can now be much more efficient by relying on data and insights, which can help them make better, more informed decisions.

Telematics and fleet management software can help fleet managers and decision-makers improve day-to-day workflow inefficiencies so they can work smarter, faster and with fewer headaches.

Here’s what you need to know about telematics so you can use it to gain a competitive advantage in the industry. Understanding telematics may also help you cut costs, increase profitability, and become a better service provider for your customers.

What is telematics?

Telematics is a combination of two words: tele and informatics. “Tele” refers to remote communications, and “informatics” is the practice of information processing.

Telematics, at its core, is the process of transmitting information remotely over long distances. Today, telematics is being used in numerous industries for commercial and non-commercial purposes.

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 fleet telematics does

In the trucking industry, fleets install telematics devices and fleet management software to collect and transmit a wide variety of information. The data that telematics and fleet management software can capture may include the following:

  • Vehicle usage
  • Location
  • Fuel consumption
  • Vehicle faults
  • Maintenance information
  • Vehicle idling time
  • Excessive acceleration
  • Hard braking
  • Hard cornering
  • Speeding

This set of 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 them to monitor assets for timely delivery and preemptively identify vehicle maintenance issues.

How does telematics work?

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

how telematics works

How are telematics installed in trucks?

Telematics devices are usually installed in the vehicle’s on-board diagnostic port, which then allows for the recording of information, such as vehicle location, driving behavior, speed, distance driven, etc.

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

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

How can my fleet benefit from telematics?

Fleet telematics is designed to empower fleet managers and administrators to solve unique business challenges. It provides 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

With advanced telematics, fleets may be able to get a much better return on investment (ROI). Here are eight benefits modern-day fleets and trucking companies may get from telematics.

1. Increased efficiency and productivity

Telematics 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.

For instance, 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 and to 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.

4. Improved safety

Safety is most likely 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:

  • The average cost of a collision involving a fatality is $3,600,000.
  • A collision with injuries is nearly $200,000.
  • The overall average cost of collisions is reportedly $91,000 per incident.

Some modern-day fleet management and telematics software focus on driver behavior and road safety.

As driving behavior data is collected, fleet management software can rank drivers based on a safety score. This may assist safety managers identify drivers with the worst- and best-performances across the fleet. Here is an example of how this data may look.

Fleet and safety managers can use this information to identify drivers who need coaching and improve the overall level of safety across the fleet.

Nowadays, telematics has also enabled 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

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 everything.

Video footage recorded by a dash cam is almost always admissible in court, and fleets can use the footage to exonerate drivers.

A driver from Nybll, a 15-vehicle 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. 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 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 vehicle maintenance issues early with fault-code detection and real-time alerts. This can help you identify important 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 eases administrative burden, but it can also reduce human error and minimizes audit risk.

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 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 to gain a competitive advantage in this area.

What is the cost associated with vehicle telematics?

Most telematics solutions on the market will have relatively straightforward costs. You may likely pay for the cost of the device and a monthly subscription fee. You’re essentially paying for valuable information, such as vehicle data and insight that you would otherwise not be able to glean without vehicle telematics.

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

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

The future of telematics

Considering the myriad of benefits telematics offers, it is poised for significant growth in the coming years.

The trucking industry is going through a change with the introduction of the ELD mandate and 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.

To discover what a fleet management software can offer and how it can benefit your fleet, learn more about the KeepTruckin fleet management solution and the KeepTruckin Smart Dashcam.

Author


Hunbbel Meer

Hunbbel covers industry trends as a writer and researcher for KeepTruckin. His goal is to help fleets understand how to use KeepTruckin's products and features so they can improve safety, efficiency, and compliance.


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