Thinking about installing fleet telematics in your vehicles? Already have them and want to know how to use them to the fullest? We’re here to help.
In this article, we discuss everything you need to know about fleet telematics technology and the best practices that make it work for your business.
Table Of Contents
- What Is Fleet Telematics?
- Fleet Telematics Best Practices
- Additional Fleet Telematics Tips
- The Benefits Of A Comprehensive Fleet Telematics Program
What Is Fleet Telematics?
The concept of telematics was coined back in the 1970s as a way to describe the branch of information technology that deals with the long-distance transmission of computerized information.
With the advent and spread of wireless technologies, such as cellular and WiFi communication, the definition of telematics evolved to include more mobile concepts and applications. Chief among those mobile applications was vehicle monitoring and management.
Now, the modern definition of fleet telematics is: Installed applications and services that provide near real-time data about vehicle activity, location, and condition.
As with most technologies, vehicle telematics were originally so expensive that they were out of reach to all but the largest businesses. But over time, the price came down to the point that even small businesses could afford to have them installed.
Then, in 2017, the United States government passed the Moving Ahead for Progress in the 21st Century Act (MAP-21).
This made it mandatory for businesses to record a driver’s hours of service electronically through the installation of an electronic logging device (ELD) — a very basic telematics system.
How Fleet Telematics Works
Fleet telematics relies on three fundamental technologies:
- Global Positioning System (GPS)
- Wireless communication (e.g., cellular and WiFi)
- Onboard diagnostic hardware
When the vehicle is on the road, the hardware monitors and records location and vehicle diagnostic data.
The system then transmits the data via a cellular, satellite, or Wi-Fi network to a central server, where the computer interprets the data and displays real-time updates when your business connects via a desktop or mobile app.
Once the technology has been installed and is transmitting correctly, the focus shifts to how you can use the data collected to improve the way your business runs.
Fleet Telematics Best Practices
1) Have A Plan For Data Collected
The ultimate purpose of fleet telematics is to ensure compliance with all local, state, and federal safety standards. But your business can do so much more than that if you have a plan for the data you collect.
Analyze your fleet activities and identify areas where it needs improvement. Common areas of improvement include:
- Fuel consumption
- Driver behavior
- Vehicle maintenance
- Routing and dispatch
- Time in transit
If you’re implementing a new telematics program or revamping an existing program, start by improving one or two of the problem areas with the data your telematics provides.
2) Talk To Drivers About Fleet Telematics
Even if you’ve had telematics in place for a while, it’s a good idea to talk to your drivers about the program. If you don’t, they may feel like you don’t trust them and that you’re invading their privacy or even spying on them.
Make it clear from the start why you have telematics, what you’re tracking, and how you’ll use that information to improve the way the business operates.
3) Train Drivers To Use The Software
Training your drivers to use the software — and use it correctly — is the foundation of every good fleet telematics program.
Provide hands-on instruction for everyone on your team so they know how, when, and where to operate the new technology in order to complete their responsibilities.
It’s also a good idea to run a refresher course once or twice a year to keep their skills up-to-date — especially if you’ve added new features or want to improve overall usage.
4) Keep Your Customers In The Loop
The near real-time data that telematics provides can be useful to your customers as well as your business. With the right software, you can keep your customers in the loop regarding the location of your vehicles, if they’re running late, and when they might arrive.
5) Control Fuel Costs
Telematics gives you all the data you need to control and reduce fuel costs across the board, including areas of waste as such as:
- Fuel slippage
- Increased vehicle idling
- Excessive acceleration
- Engine inefficiency
- Non-optimal routing
With these and other data points in hand, create programs to reduce fuel consumption and increase fuel efficiency in all your vehicles.
6) Optimize Vehicle Routes
Optimizing the routes your drivers take to their destination can help reduce the wear and tear on your vehicles and the overall fuel they consume.
Take the time to analyze the data your telematics provide, and then establish regular routes that avoid major traffic and get your vehicles to their destination quicker.
7) Build A Safety Training Program
As we mentioned earlier, the federal government made fleet telematics mandatory in business vehicles as a way to improve the overall safety and efficiency of U.S. roads.
Take advantage of the new insight that telematics hardware and software provides by building a safety training program from the data you gather.
Not only does safety training cut down on expensive accidents, but it also helps reinforce the importance of conserving fuel and keeping all vehicle systems in good working order.
8) Monitor Your Data Regularly
If you don’t monitor your data regularly — and act on what you learn — telematics hardware and software aren’t worth the expense.
Even less frequent monitoring can send the message to your drivers that your business isn’t taking the program seriously. That can lead to a serious disregard for the safety, fuel, and route procedures you’ve implemented thus far.
9) Track Maintenance Milestones
Another best practice for using telematics in your business is to track maintenance milestones with the goal of improving your fleet vehicles’ mechanical operation and overall condition.
Setting up and adhering to a preventative maintenance plan can save you hundreds, if not thousands, of dollars over the life of each vehicle.
Using the telematics on each vehicle to track cargo hauled, hours of use, miles driven, and even the general geographic area of operation can help you create an effective and efficient plan that keeps your equipment on the road longer.
And with real-time monitoring of engine systems, such as electrical, fluids, powertrain, intake, and more, you’ll be able to minimize unforeseen breakdowns and reduce the costs associated with those emergencies.
10) Keep Your Fleet Compliant
Compliance is one of the more difficult things your fleet-based business may have to contend with. It’s also where fleet telematics can really shine.
You can use the data from onboard tracking hardware and software to make your compliance efforts simpler and more streamlined than before.
Here are three of the main ways you can use fleet telematics to keep your vehicles, drivers, and business compliant.
To help ensure that U.S. roads are as safe as possible, the federal government has made it mandatory that drivers fill out a Driver-Vehicle Inspection Report (DVIR) before and after every trip (or at the beginning and end of the workday).
Armed with that knowledge, you can take steps to prevent the types of system malfunctions — e.g., brake failure, steering loss, visibility and sight obstructions, and tire and wheel wear — that often lead to accidents, property damage, and personal injury.
Inspection reports can also provide a record of what each vehicle has been through while on the road and the time, effort, and money you’ve put into keeping them compliant and in safe working order.
In many cases, fleet telematics equipment can give you and your drivers a “behind-the-scenes” look at the systems that make your vehicles run (e.g., fluid levels and wheel alignment, to name just two).
That level of detail might normally be invisible to drivers because those systems are difficult to test.
But, when they can see the data provided by fleet telematics, they may be better prepared to do the things that keep the vehicle running smoothly — and up to federal government compliance standards — while away from your base of operations.
Compliance, Safety, And Accountability Scores
Fleet vehicles aren’t the only business asset that must remain in compliance at all times — drivers must too. In their case, they must abide by federal Compliance, Safety, and Accountability (or CSA) scores.
These scores are given out by CSA agents at roadside inspection points along major U.S. thoroughfares and are based on the following categories:
- Unsafe driving
- Vehicle maintenance
- Hazardous material compliance
- Controlled substance or alcohol
- Driver fitness
- Compliance with hours-of-service requirements
- Crash indicator (i.e., frequency or intensity of collisions)
A driver’s CSA score must fall within a certain acceptable range or the driver and/or the vehicle may be removed from service — not allowed to drive — and your business may receive a fine.
With telematics in place and the data rolling in, you’ll be better positioned to monitor and control the variables that contribute to the CSA score, maintain driver compliance, and keep your vehicles on the road where they can do the most good for your business.
Another complicated compliance issue that many fleet-based businesses have to contend with is tracking and reporting their mandatory fuel tax according to the International Fuel Tax Agreement.
According to the IFTA, businesses that field commercial motor vehicles of any size must record specific data points — including miles driven and amount and location of fuel purchased — and then submit these numbers to their local IFTA office once a quarter.
The IFTA then distributes the funds from fuel tax to the appropriate state or province (if a driver filled the tank in Canada).
Tracking and reporting these numbers manually using hard-copy receipts can be extremely difficult and time consuming (not to mention incredibly inaccurate if drivers lose their receipts or fail to get them in the first place).
But, with fleet telematics, GPS, and other tools, your business can record the requisite data automatically so that the reporting process may be easier, more accurate, and more secure.
Additional Fleet Telematics Tips
1) Keep The Lines Of Communication Open
Communication is key for your fleet’s successful operation. Keep those lines of communication open by utilizing the power and scope of telematics hardware and software.
The new technology included in most vehicle tracking programs makes it easier than ever to establish true real-time, two-way communication between a driver and the business office.
Such two-way communication helps keep everyone up to date, going where they need to go, and doing what they need to do to maintain the smooth operation of your business.
2) Reward Good Performance
Telematics data gives you insight into exactly what your drivers are doing with the vehicles while they’re on the road. When you regularly monitor that data, you’ll start to see who is performing well and who isn’t.
Reward those who are driving within the safety, fuel, and maintenance standards that you set up for your fleet. This will reinforce that type of performance and make it more attractive to those who aren’t operating at the same standard.
3) Set Up Geofences
Geofencing is a unique feature of telematics that allows you to create a virtual geographic boundary (a geofence) around a certain area.
If one of your fleet vehicles crosses that boundary (either entering or exiting), the software will notify you and remind the driver that they’ve taken the vehicle somewhere you don’t want it to be.
4) Automate Vehicle Records And Reports
Recordkeeping and reporting is a labor-intensive process. Vehicle telematics can make it easier.
Set up the hardware and software so that the onboard data can be used to create the reports your drivers and fleet managers need for the day, week, month, and year.
This cuts down on the extra minutes (and sometimes hours) it takes to gather all the data and ensures that your fleet is compliant at all times.
5) Put Your Data To Work
Once your fleet telematics data is rolling in, put it to work in calculations that benefit your business. For example, where vehicles are concerned, two of the most important calculations are Total Cost Of Ownership (TCO) and Vehicle Cost Per Mile (VCPM).
VCPM includes the TCO calculation, so the latter is a good place to start. Both of them, however, include data that telematics makes easier to access.
For the Total Cost Of Ownership calculation, use the following equation:
Total Cost Of Ownership = Fixed Vehicle Costs + Variable Vehicle Costs
Fixed vehicle costs include things you pay for on a regular basis that don’t vary or change, such as:
Variable vehicle costs include things that you pay for on a regular basis that do vary or change, such as:
As you compile this information from the mass of telematics data on hand, make sure all the numbers are for the same time period of time (e.g., a single day, week, or month) so the math comes out right.
Once you’ve got the totals for each vehicle cost, plug them into the equation to find the Total Cost Of Ownership for that vehicle.
Then, with the result and a bit more fleet telematics data, you can calculate Vehicle Cost Per Mile with this equation:
Vehicle Cost Per Mile = Total Cost Of Ownership / Total Miles Driven
The final values for both of these equations can help you see how your business is doing and how it can improve. But it all starts with putting your telematics data to use in a meaningful and relevant way.
The Benefits Of A Comprehensive Fleet Telematics Program
With a comprehensive fleet telematics program in place, your business may enjoy a new level of productivity that wasn’t possible before.
For example, once you analyze your data, you may find that your drivers have too much to do in their time on the job. Because of that, they may be rushing through their responsibilities and even exhibiting unsafe driving behaviors in order to stay on time.
Identifying this problem using your fleet telematics data allows you to then take steps to reduce the number of appointments on their schedules so that they, in turn, can dedicate more time to producing high-quality work.
Another benefit of having fleet telematics data on hand is the longevity it can lend to your vehicles.
Your fleet vehicles are an integral part of the business. No doubt, you want to get as much out of them as you can before they need to be replaced.
Analyzing your fleet data may reveal things you can do to help a single vehicle, or a group of vehicles, last longer in the field.
For example, telematics may show an overall increase in the running temperature of a certain vehicle’s transmission. This can be indicative of a larger problem that you might be able to remedy before it becomes a (more expensive) catastrophic issue.
It all depends, though, on whether you catch the problem and take steps to initiate repairs before the problem affects a larger system or turns into something worse.
The safety of their vehicles, drivers, and those who share the road with them is a primary concern of every fleet manager.
You can improve your safety stats across the board by analyzing fleet telematics data, identifying problem areas, and designing safety programs to make things better.
Such programs can address all manner of poor driving behavior, including unsafe cornering, rough steering, excessive idling, and heavy braking.
The programs can also address procedures that contribute to the safety of your vehicles, including regularly checking tire pressure and verifying engine oil levels.
Your business can avoid the safety issues that come with these behaviors and procedures by using telematics to identify the problem and then training your drivers to improve.
The definition of efficiency is achieving maximum productivity with minimum wasted effort or expense.
The key part of that concept is with minimum wasted effort or expense.
Even the most unorganized fleet can increase efficiency through years of trial and error. Your business probably doesn’t have that time (nor the money that goes with it) to waste.
Instead of relying on guesswork or hit-or-miss solutions, use your fleet telematics to zero in on the heart of the issue and then design solutions that address the problem head on.
As we’ve mentioned throughout this article, fleet telematics can help your business save. In some cases, it might be effort. In other cases, it might be time or money.
Whatever the case is for your business, you can use the information you glean from onboard tracking systems to implement policies and procedures that save all three.
For example, you may discover that with a slight change in the route a vehicle travels, your business can reduce overall fuel costs for the week.
Or, the same change might reduce wear and tear on key systems of the vehicle.
Both of those changes can translate to huge savings over the long haul that are good for your business, your bottom line, and the environment in which you operate.
21st Century Fleet Management
Fleet telematics is a powerful tool that can help you transform your business for the better. Nowhere is this more true than when it comes to fuel management.
But all the information that your telematics provide is just numbers on a screen unless you apply it to your real-world operations and integrate the results into your workflow.
The Coast fuel card can help. Coast’s online expense management platform empowers you with real-time information and allows you to set spending limits, issue cards, and authorize payments with just a few taps or clicks.
For more information on how Coast can help you control fleet costs and streamline your fleet management program, visit CoastPay.com today.