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Fleet Management

What Is Telematics? Everything Fleet Owners Need To Know

Want to improve the way your fleet runs? Install telematics. Learn everything you need to know about the technology and how it can benefit your business.

telematics

Modern technology has made near real-time tracking, monitoring, and data acquisition a viable option for fleets large and small. Telematics is the key.

In this article, we discuss the theory and practice that every fleet manager needs to know to make the right decision for their business.

Table Of Contents

What Is Telematics?

Telematics mapAs technologies continued to evolve, and cellular and Wi-Fi communication grew, telematics spread away from its wired roots into more mobile applications — including fleet management.

Now, the word telematics — or vehicle telematics, to be more precise — is more commonly defined as: Applications and services that provide near real-time data about vehicle activity, location, and condition.

With the passage of the Moving Ahead for Progress in the 21st Century Act (MAP-21) in 2017, such tracking went from optional to all but necessary if fleet-based businesses wanted to continue to grow.

Why?

Because a significant part of MAP-21 included language that made it mandatory for businesses to record a driver’s hours of service electronically — rather than manually — through the installation of an electronic logging device (ELD).

This was meant to prevent accidents caused by too much driving and not enough sleep. And it all relied on the science at the heart of vehicle telematics.

The Science Behind Vehicle Telematics

Cell towers for telematics

As we mentioned in the previous section, vehicle telematics relies heavily on a series of fundamental technologies, including:

  • Onboard diagnostic equipment
  • GPS
  • Wireless communication

Here’s how these technologies work together to make everything work.

Installation

It all starts when you install the onboard diagnostic equipment on a fleet vehicle (be it a work truck, work van, semi, or construction equipment).

This “little black box” works in tandem with global positioning (GPS) data to record, store, transmit and receive telemetry — or computer-based information — about the vehicle.

Activation

When the vehicle is on the road, the onboard monitoring equipment records location and vehicle diagnostic information.

Transmission

The system then transmits the data via a cellular, satellite, or Wi-Fi network to a central server.

Analysis

The servers interpret the data and display updates in near real time when your business connects via a desktop or mobile app.

How Your Fleet Can Use Telematics

Row of fleet vans

1) Track Assets

One of the main ways you can use telematics is to track, organize, and coordinate the use of fleet assets. This includes not just motorized assets but non-motorized assets as well.

For example, installing equipment on a trailer allows a fleet manager to monitor the location of the asset, route other fleet vehicles accordingly, and prevent the trailer from being moved without authorization.

2) Implement Preventative Maintenance

Another way your business can use telematics is to improve the maintenance and overall condition of the vehicles in your fleet.

Tracking hours of use (and other onboard data) can help you create an effective preventative maintenance 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.

3) Control Fuel Costs

Fuel costs are one of the highest expenses fleets have to contend with these days. Telematics can help control, and even reduce, what your business spends to keep fuel tanks full and ready to go.

How? By giving you the data necessary to identify areas of waste, such as:

  • Increased vehicle idling
  • Fuel slippage
  • Engine inefficiency
  • Excessive acceleration
  • Non-optimal routing

With that information in hand, you can put programs in place to reduce waste and increase fuel-efficiency practices throughout your business.

4) Monitor Driver Activity

Man driving a bus

Driver activity plays a huge role in some of the most critical fleet components, including vehicle wear and tear, fuel consumption, and route optimization.

Telematics provides a way to monitor driver activity while your team is on the road.

The onboard equipment gives you insight into position, speed, and distance traveled, and it also lets you analyze variables such as:

  • Unnecessary idle time
  • Harsh braking
  • Heavy acceleration
  • Fast cornering
  • Rough driving
  • Seat belt use
  • Inefficient (or detrimental) shifting

Identifying unsafe behavior behind the wheel can help you prevent all sorts of costly issues, including mechanical damage, body damage, property damage, operator injury, and pedestrian injury.

Monitoring driver activity and behavior may seem like an invasion of privacy at first, but safety on the road means less potential for expensive repairs and a longer life for your vehicles.

5) Reduce Operational Expenses

A lot of variables go into the way you operate your fleet. Telematics can help you control them all. We’ve already mentioned a few, but it helps to view them as pieces of a puzzle that, when put together, keep expenses low and profits high.

With the data from onboard telemetry and GPS location, you can:

  • Plan smarter routes
  • Manage fuel consumption
  • Design maintenance programs
  • Acquire the right vehicles for the job
  • Promote safety
  • Perfect training programs
  • Prepare for vehicle replacement

Tracking and data-gathering technology have the potential to help you streamline all those variables (and others) and reduce operational expenses overall.

6) Assess Insurance Risk

The numbers you get from your onboard monitoring equipment can go a long way toward helping your insurance company assess risk factors and tailor your policy accordingly.

In some cases, your premiums may go down because the data shows that your drivers are safe on the road and pose less of a risk that they’ll get into an accident.

As with the other items on this list, using telematics to assess insurance risk goes a long way toward reducing the overall operational expenses of your business.

7) Automate Vehicle Records And Reports

Recordkeeping and reporting for a fleet is a labor-intensive process.

Drivers have to keep track of the hours they work, the miles they drive, and a host of other variables. Fleet managers have to keep track of all their driver records and verify them against odometers, MPGs, and fuel costs (just to name a few).

Both activities — driver and fleet manager recordkeeping — take up a lot of time. Time that would be better spent getting the job done or moving your business forward.

Telematics automates a good portion of the reporting and recordkeeping necessary to keep a fleet compliant and on the road to success.

The end-user software can be set up to use the data from onboard computers to create all the requisite reports a driver and a fleet manager need for the day, the week, the month, and the year.

That cuts down on all the busy work and data gathering and frees up time so that everyone can focus on making your business better.

8) Set Up Geofences

Ariel view of freeways

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 even remind the driver that they’ve taken the vehicle “out of bounds.”

For example, if your fleet operates on a specific north/south route (e.g., Interstate 75), you can set a geofence around that corridor. If a driver takes a vehicle outside the marked area, you’ll both receive a message indicating that they’re outside their defined path of travel.

Similarly, you could set up a geofence to keep vehicles out of a certain area rather than in a certain area.

The ability to set boundaries around where your vehicles should and shouldn’t go can help you bring order to the chaos and keep drivers on the best routes to maximize fuel consumption and minimize equipment wear and tear.

9) Streamline Communication

The hardware and software built into vehicle tracking equipment make it possible (and easier than ever before) to establish real-time, two-way communication between drivers and their home base.

Communication of this type helps keep everyone up-to-date, where they need to be, and on the right track to keep your business operating smoothly and efficiently.

10) Provide Support In Legal Matters

Accidents do happen. And while no business wants to be involved in legal proceedings, sometimes they’re unavoidable.

In such cases, dashcam video and other driver tracking data help support the innocence of your drivers and protect your business against sky-high legal and financial penalties.

How To Make The Most Of Telematics


1) Create A Plan For Your Telematics Data

In the previous section, we discussed some of the foundational ways you can use telematics to improve the way your team works. But those aren’t the only options available to you.

As you’ll see in this section, telemetrics can do incredible things for your business — but only if you have a plan for all the data coming in.

At first, the sheer amount of data may seem overwhelming. You can avoid this speed bump by first analyzing your fleet and identifying areas where things could be better.

Then, you can isolate the telematics data to help you in your efforts to improve.

Whether you’re restructuring an existing telematics program or creating a new one, make a plan for the data you’ll receive — what points to look at and how to apply them to your business — so you don’t get lost in all the numbers.

2) Get In The Habit Of Monitoring Your Data

Installing telematics in your fleet vehicles comes with a certain set of responsibilities that can mean the difference between success and failure. On the management side of things, those responsibilities include monitoring your data regularly.

If you don’t get in the habit of analyzing the information that rolls in — and acting on what you learn — the hardware and software may not be worth the expense.

Installing telematics and then neglecting to monitor the data may even send the message to your team that you’re not taking things as seriously as you should.

That can lead them to disregard any fuel, route, and safety procedures you put in place.

Get in the habit of monitoring telematics data right from the get-go so you and your team can make the most of this comprehensive technology.

3) Keep Drivers In The Loop

From your drivers’ point of view, installing vehicle telematics may seem like an invasion of their privacy or a signal that you don’t trust them to do their job correctly.

You can defuse this issue by talking to your team about whatever programs you implement and keeping them in the loop about why your business needs this new technology.

Be sure to discuss what you’re tracking and how you’ll use the data to improve the way your business works.

4) Train Your Team For Best Results

Your telematics plan will only be as successful as each driver’s ability to operate the technology correctly.

Provide hands-on training for everyone on your team so that they are familiar with everything the vehicle tracking hardware and software does and how they can use it all to do their job better.

It can also be beneficial to hold a review class once or twice a year to keep those skills fresh in their mind. This is especially important if you add new features or want to improve the way they’re using the technology on the job.

5) Roll Out New Features To Your Customers

telematics on a smart phone

While telematics is mainly used to provide real-time information to drivers, management, and support staff, some of the data can also be extremely useful for your customers.

With the right features engaged, you can provide hyper-accurate information about such things as vehicle location, estimated time of arrival (ETA), and route taken so that your customers and clients can plan accordingly.

6) Optimize Your Safety Training Program

One of the best things you can do with telematics data is to optimize your safety training program.

The hardware and software you install on your fleet vehicles can give you insight into such detrimental driving behavior as:

  • Rapid acceleration
  • Heavy braking
  • Rough steering
  • Unsteady cruising
  • Excessive idling
  • Unsafe cornering

These bad habits can do a number on your vehicles — including increasing fuel consumption, causing unnecessary wear and tear, and shortening their useful life — and result in your business having to spend more than planned for upkeep and maintenance.

Your business can avoid such expenses by identifying bad behaviors early on and training your team to improve.

7) Reward Safe Driving

With telematics data in hand, you’ll be able to see which drivers are operating their vehicles according to your high standards (and which drivers are not).

Training is a big part of making everything better, but so is rewarding those who take safe driving seriously.

Consider implementing some type of driver recognition program that highlights good behaviors and provides rewards for meeting certain benchmarks.

Such programs help to reinforce the importance of staying safe on the road and make it worth your drivers’ effort and time to do so.

8) Automate Pre- And Post-Trip Inspections

Pre– and post-trip inspections are the lifeblood of your fleet. But such reporting and recordkeeping can be a labor-intensive job.

Telematics can make it easier.

With some systems, you can set the hardware and software to automate the information-gathering process so that the data your drivers need is available at the touch of a button.

In some cases, the system can be set to produce and save the reports your drivers and managers need for the day (and, in some cases, for the week, month, and year).

Such automation can help reduce the amount of time it takes to gather all the data your business needs to stay compliant, safe, and productive on the road.

9) Maintain Up-To-Date CSA Scores

Speaking of compliance, telematics can also help your business maintain each driver’s Compliance, Safety, and Accountability (or CSA) score.

With the help of onboard systems, you can work to improve many of the variables that go into calculating the CSA score, including:

  • Vehicle maintenance
  • Frequency or intensity of collisions (the Crash Indicator)
  • Driver fitness
  • Compliance with hours-of-service requirements
  • Controlled substance or alcohol
  • Unsafe driving
  • Hazardous material compliance

By keeping CSA scores within acceptable limits, you can avoid penalties and keep your drivers and vehicles in service longer.

10) Simplify Fuel Tax Reporting

Simplify Fuel Tax Reporting with telematics

In 1983, the U.S. and Canada enacted the International Fuel Tax Agreement (or IFTA for short) to track and control commercial vehicle fuel taxes.

Under this agreement, businesses that field commercial motor vehicles (regardless of size) must record:

  • Miles driven
  • Fuel purchased
  • Purchase locations

Every three months, they must then submit this information to their local IFTA office, which will then distribute fuel taxes to the appropriate location based on the number and location of miles driven while on the job.

Before telematics, all of this had to be done with numbers from hard-copy records that were subject to loss, damage, and inaccuracy.

However, with help from onboard systems, businesses can record the necessary data automatically, streamline the recording and reporting processes, and make everything more accurate and secure.

11) Get Accurate Trip Miles

Another way you can make the most of telematics is to set the systems so that they record and report accurate trip miles.

This information is extremely important for effective fleet management. But collecting it manually can introduce all manner of errors into the mix, including:

  • Reporting tenths of a mile
  • Writing numbers in kilometers instead of miles
  • Rounding mileage down or up
  • Guessing the miles driven

Telematics can help your drivers avoid these common mistakes and provide them with true trip miles so that their reporting and recordkeeping are as accurate as possible.

Some systems even make it possible for you to set mileage limits and warn drivers if they attempt to record numbers that exceed a certain value or that don’t match the previous post-trip report.

12) Maximize Cost Analysis

Maximize Cost Analysis with telematics

Telematics can also help you maximize the two cost analysis variables — Total Cost of Ownership (TCO) and Vehicle Cost Per Mile (VCPM) — for your fleet.

You can, of course, conduct a cost analysis manually, but onboard tracking and reporting systems can make the entire process easier.

Here’s how to use telematics data to get the most accurate cost analysis possible.

Total Cost Of Ownership

Calculate Total Cost Of Ownership with the following formula:

Total Cost Of Ownership = Fixed Vehicle Costs + Variable Vehicle Costs

First, add up all the fixed vehicle costs, such as lease payments, insurance, licenses, and permits.

Second, add up all the variable vehicle costs, such as fuel, tolls, and maintenance. Plug those numbers into the equation and work through the math to find the TCO for each vehicle in your fleet.

As you do, be sure that all the numbers are for the same period (e.g., one day, one week, one month). If you neglect to account for this part of the math, you could find yourself calculating the TCO of one vehicle for a week and the TCO of another vehicle for a month.

Vehicle Cost Per Mile

Once you’ve calculated Total Cost Of Ownership, you can find the Vehicle Cost Per Mile (VCPM) with this formula:

Vehicle Cost Per Mile = Total Cost Of Ownership / Total Miles Driven

Obtain the total miles driven from your telematics software and plug it into the equation along with the TCO from the previous step. Then, chug through the math to find the VCPM.

The final values can help you improve the way you and your drivers operate fleet vehicles.

Telematics And Fleet Management

Spending report for fleet management

As we’ve discussed in this article, telematics can revolutionize the way your fleet operates — particularly when it comes to fuel management. But all the data in the world won’t do any good unless you apply it where the rubber meets the road.

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.

And, with integrations that connect Coast to the telematics, fleet management, and accounting tools you use every day, you’ll be able to streamline your team’s activities like never before.

For more information on how Coast can help you control fleet costs and streamline your fleet management program, visit CoastPay.com today.