Is Telematics Right for Your Fleet?

Is Telematics Right for Your Fleet?

Posted by Greg Carson, Vice President Operations on May 03, 2016

When you think about what telematics is capable of, it’s no wonder it is making headlines. Here’s aUnionLeasingCarIcon.png
technology that can not only elevate customer experience, but can improve the efficiency of operations. For the first time, fleet managers can monitor logistics, route times, vehicle speeds and driving behavior from afar. Telematics can also produce information invaluable for monitoring idle times and associated fuel costs, and for isolating questionable driving practices.

Most importantly for fleets, telematics can automatically retrieve that coveted odometer information, which is crucial for accurate cost per mile calculations and maintenance forecasting.

Whether or not telematics is right for your fleet is a great question to ask. Even though there are many clear benefits of the technology, there isn’t always a hard and fast ROI model.

For one company, the return on investment could be easily measured and tracked. For another company, that same model may not apply because they’re using telematics for different purposes and for different industry.

In situations where the ROI model is less clear, it can be difficult to weigh the benefits against the costs. While everyone agrees that telematics can improve safety, service levels and cost efficiencies, it can come with significant expense and administration.

If your fleet chooses a hard-wired telematics system, for example, there are costs for the actual device, its installation, and the monitoring software that connects to the device. When it comes time to trade in the vehicle, there are additional costs to uninstall and then reinstall the device to the new vehicle.

Every telematics installation is a little different depending on models and requirements —but all in, a successfully wired installation and activation can be around $400 per unit. Not an immaterial investment.

For those who don’t want a hardwired device, there are plug-and-play telematics options. These are generally less expensive and easier to install. The main concern with this option is that it is possible for drivers to disable a device, producing inaccurate readings or masking vehicle use.

So… is a telematics solution right for my fleet?

It depends. If you have identified your fleet as having liability risks that need monitoring, then telematics might be a solid solution.

If your industry is service-based—and you rely on efficient logistics and happy customers—telematics can be an excellent way to improve experience. For companies not in a position to invest in telematics today due to cost constraints, the best option might just be to wait.

Telematics technology is still in a fledgling stage. Vehicle manufacturers will let the technology pick up speed, and then begin to install telematics devices during the manufacturing process—just like they did with Bluetooth wireless technology.

As with most all technology, telematics will mature and it will most likely become more affordable, possibly working the way Netflix or OnStar does: you subscribe to an app and the data streams to your device, wherever you are logged in.

Only time will tell, of course. But if you find yourself struggling to determine whether telematics is right for your fleet, there is no harm in waiting for the early adopters to pave the way for better technology, and with any luck, a better price.

I’m not sure that there’s a hotter topic right now than telematics.UnionLeasingCarIcon.png

Blog Post Author: 
Greg Carson, Vice President Operations