How Has Telematics Transformed Fleet Management?

Widespread adoption of telematics technology, both in consumer and commercial vehicles, has made the United States the largest telematics market in the world, according to analysis firm IHS. Forecasts suggest that total sale and installations of telematics devices will surpass 16 million units by 2021, with the market enjoying a compound annual growth rate of just over 10 percent. IHS also predicts that by 2021 every new vehicle will be outfitted with some type of telematics hardware, bringing the total adoption rate for the nation up over 99 percent. These numbers serve as hard evidence that telematics are the way of the future, and the technology has already affected a fundamental shift in fleet management.

Large fleets see big results
A recent article by Entrepreneur demonstrated how a company as well known as UPS has improved performance and cut costs through the use of telematics. The company has seen such a turnaround in vehicle performance that required inspections were cut in half, reduced by 120,000 check ups over the past five years. This huge reduction in maintenance costs was a result of telematics tracking software providing targeted ways to improve the company’s maintenance schedules. By spotting signs of wear and bad driver decisions early, UPS fleet managers are able to schedule repairs or correct behaviors before maintenance costs escalate. Changes made based on telematics data also helped the company’s fleet to improve vehicle efficiency of medium-duty trucks by 50 percent. Dale Spencer, UPS’ top fleet manager, noted that even small-businesses with fleets smaller than 10 vehicles can use telematics to reduce maintenance spending.

Risk assessment reloaded
Fleet telematics has had as big an influence on insurance companies as it has on driver behaviors. Insurance companies have recognized telematics as an opportunity to evaluate claims with more hard data and less assumptive conclusions. Likewise, drivers and fleet managers have gravitated toward insurance policies that take advantage of telematics, preferring the perceived objectivity of claims based on telematics data, according to Baseline Magazine.

As a result, insurance companies now offer hefty incentives to coax managers into telematics upgrades for the fleet. Some companies are willing to reduce rates by up to 30 percent for drivers being monitored by telematics. Even a driver with a poor record can receive a small discount for simply installing telematics gear in his or her cab. This precedent will likely grow even more pervasive as telematics technology advances and begins to deliver driver behavior details with even greater accuracy.

Security drives adoption
Telematics devices, specifically the GPS devices typically included in a telematics suite, have also made an impact on stolen vehicle recovery. Fleet managers now enjoy extra peace of mind. Lost or stolen vehicles can quickly be located with telematics, and this data has also made it significantly easier to recover lost trucks. Insurance companies are likely to add additional incentives for fleet managers to install telematics in their vehicles to account for the value of this theft prevention, according to Insurance Tech. The growing adoption of telematics will likely force car thieves to change their tactics as the technology becomes the new standard for deterring grand theft auto.