What does Telematics mean?

Telematics is a method to store and receive information from telecommunications devices to remote objects over a network. According to Motive, one of the leading telematics companies in the transportation space, the word telematics derives from combining telecommunications and information. As defined by Geotab, in the transportation and logistics space, telematics refers to the process of monitoring commercial vehicles and other assets using GPS technology and onboard diagnostics (OBDs).

Broadly speaking, in the logistics space, fleet telematics solutions are used by fleet managers to keep track of the vehicles and most of the details in them: location, driving speed, braking, fuel consumption, and many more, which we’ll detail later. 

The power of telematics solutions resides in offering real-time vehicle monitoring that allows carriers to optimize many operational processes. Although it is needed for compliance in some cases, the value it adds seems to make it a no-brainer for every logistics company to install this technology. 

How does it work?

Verizon Connect explains that telematics systems consist of software devices that are connected to the vehicle’s onboard diagnostics port. Then, a modem remotely shares the gathered information to a central server. 

At that point, the server receives data, processes it, and then displays it to the fleet managers and owners through a platform, a mobile app, or even a browser. This way, management can interpret the information and gain insight to make better decisions towards efficiency and best practices. 

So, what kind of vehicle-specific data do the telematics devices collect to help carriers be more efficient in their fleet management?

Telematics providers can share many aspects of the trucks that can be measured by electronic logging devices (ELDs) and OBDs. These kinds of data include vehicle location with real-time GPS tracking, vehicle maintenance issues from the OBD, vehicle usage, fuel consumption, hard braking, hard cornering, vehicle speed, idling time, and driver information. 

Why is it important?

Compliance: Some of the information gathered with telematics is needed due to regulations and compliance. Monitoring drivers’ hours of service and vehicle tracking to control the trucks' location are mandatory in the United States. 

Operational Efficiency: Trucking companies utilizing ELDs can improve many of their processes, including dispatch and routing, fleet maintenance planning, and fuel card security. These will be outlined below.

Sustainability: Optimizing certain operations can also positively impact a carrier or shipper’s carbon footprint, making telematics systems a solid solution for sustainability. Utilizing telematics can result in reducing distance traveled and fuel usage, minimizing the carbon footprint and the negative effects on the environment. 

Transparency and Customer Service: Telematics can also help maintain and improve relationships with many of the logistics stakeholders, especially professional drivers, dispatchers, brokers, and shippers. Having fair and accurate locations and ETAs makes for a trusted player in the transportation industry.

Safety, security, and insurance: 

Regarding safety improvements, keeping track of driving behaviors, like speeding, braking, and cornering, enables both fleet managers and insurers to identify and mitigate risky driving behaviors. Fleet managers can utilize telematics device data to identify coaching opportunities in real time. Insurers can use this data to adjust risk models in underwriting and hopefully provide discounts to companies with a clean driving record and safe behaviors. 

Moreover, to support security measures, certain door-monitoring telematics devices can monitor when trailer doors are opened and closed, ensuring that they are only opened by authorized employees, ensuring cargo remains in the right hands. In other cases, companies may use telematics devices to ensure that trucks are where they are supposed to be, whether in cases of delivery, fueling up at the pump, or in cases of companies making advanced payments to carriers. In all these cases, companies may use vehicle and telematics provider data to ensure that trucks and their cargo are in the appropriate place at the right time and in the right hands.

Vehicle maintenance:

Using modern telematics systems can have a significant impact on the fleet’s vehicle maintenance lifecycle. Because ELDs plug into the diagnostic port of tractors, they can often collect diagnostics about the state of the vehicle and any major fault-codes. Early detection of these codes by fleet managers can help fleets mitigate repair costs and potentially dangerous driving conditions.

Additionally, since ELDs gather information from the engine and the diagnostic port, they also provide data to build preventive and predictive maintenance plans. In the long run, engine and diagnostic data can support carriers. These benefits allow fleets to utilize trucks and capacity efficiently while also extending the life of their assets.

Operational efficiency:

A telematics system can provide motor carriers with insight into fuel economy and opportunities to decrease fuel costs. These opportunities present in a few different ways. First, some ELDs and connected applications provide real-time and retrospective miles per gallon (MPG) data. These applications can integrate indicators like speeding, braking, and tire pressure that significantly impact fuel spending. Monitoring them and understanding the best ways in which truckers can drive to lower fuel consumption can save money and also help the environment by reducing the carbon footprint– a double win. These types of applications and programs can help fleets maximize their mpg over short and long hauls. 

Secondly, there are some fuel programs that can utilize telematics data to help fleet managers and drivers to identify partner fuel stations along a driver’s intended route. These types of programs can help fleets ensure they are getting the best fuel discounts at the pump. 

Third, fleet managers can utilize telematics data to support truck routing. Connected telematics and third-party applications utilize a variety of telematics and GPS data to find the best route that can minimize risk, improve fuel consumption, and get the truck and cargo to its destination faster. These aspects make telematics systems attractive in terms of ROI. 

With this level of understanding of what's happening with every vehicle, fleet managers can also question and rethink the fleet’s operations. Since they can track each vehicle and driver's performance, they can decide on changing the fleet size, the vehicles they work with, and the driving time.

Reduction of disputes:

Implementing telematics technology is a great way to avoid or mitigate common timing issues in the transportation industry. Some companies have begun utilizing telematics data and geofence data to understand when trucks enter shipping and warehouse facilities. These data can both help shippers prepare for incoming cargo from fleet vehicles. 

In addition, telematics help carriers, shippers, and freight forwarders agree upon payments for detention fees. Why? When all parties have visibility into the current and historical location data on the cargo, all parties have a common data understanding of when a truck arrived and if and how long that truck waited before unloading. 

Better customer service experience: 

Lastly, vehicle telematics systems can help trucking companies improve their customer service, reputation, and relationships with clients and other stakeholders. With optimized routing, trucks can get to shippers and warehouse facilities in the time promised. Telematics platforms also allow fleets to share location information to keep all parties up to date on potential delivery delays.

Having the capacity to consistently deliver on time and keep your word make the company a trusted player. This reputation is key to receiving new opportunities and keeping sustainable growth. Reputational capital is as important as the rest of the assets.

Telematics systems are a smart solution:

Adding suitable fleet management software means ensuring your entire fleet complies with driving regulations. However, it is also the best way to gain many additional benefits: assuring driver safety and monitoring driving habits, establishing optimal preventative maintenance, improving fuel efficiency, collecting data to solve disputes, and providing transparency to clients on the status of current deliveries.

How TruckerCloud helps:

Above are among some of the ways that telematics can help transportation companies grow, look after the environment, and improve performance. TruckerCloud helps companies integrate systems and applications with ELDs and other telematics devices, so that these companies can leverage these data and optimize business processes and technology.

Learn more about our platform here.

Learn more about ELDs and what ELD data is used for here.