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Telematics and Fleet Management – A Revolution is Coming

Telematics is a buzz word around the fleet management industry, but knowledge about what telematics really means and how businesses can benefit from these systems is limited. Fleet telematics systems are about the use of wireless devices and “black box” technologies that transmit and collect data about how a vehicle is operating and how the driver is operating it. They are much more than a GPS unit. 

Telematics and Business Productivity

The telematics systems of today and tomorrow have far-reaching impacts for businesses and the way vehicle fleets and other business assets are managed. There is the potential to track much more than vehicles themselves and the data that is collected can be mined and analysed in multiple ways to increase asset utilization and productivity. Fundamentally, telematics are about helping organisations run better and safer. 

Telematics Market Research: Who is Using Telematics?

So how many fleet managers in Australia are embracing this new technology, who is using telematics and how? ACA Research has recently conducted a study of the use of telematics by Australian fleet managers to provide some answers to these questions. 226 fleet managers were interviewed in November and December 2013. The results are striking.

Despite the much heralded potential benefits of telematics, only 15% of fleet managers are currently using a telematics system. A further 10% said that they are not currently using a telematics system but they intend to do so in the next 12 months – of these just over half (55%) did not know what brand of system they would use. As the chart below shows, it is the larger organisations that have implemented telematics or intend to do so in the next year. 

Telematics Market Research

Telematics Market Research: How Are Businesses Using Telematics?

Of the 33 organisations that are currently using a telematics system, 10 were using it for vehicle tracking, seven utilised navigation features, six were monitoring vehicle performance and five were monitoring driver performance. This suggests that even among earlier adopters of telematics, the full benefits and features are not being utilised. The primary benefits of telematics are considered to be either cost reduction through more efficient asset utilisation, or improved driver and vehicle safety. Real time information about vehicle location also means there are potential customer service and communication benefits.

For Steven Douglas, a fleet manager at Northam Hospital in Western Australia’s Wheatbelt, telematics help him provide immediate support for vehicles that encounter difficulties when operating in remote areas. “One of our vehicles was recently involved in an accident, and we were immediately able to see the vehicle’s speed at the time of the accident.” Douglas said. That can sound like Big Brother, but Douglas argues that safety concerns should be paramount: “You need to start saying to people ‘it’s about your safety, we are paying for a vehicle for you to use and we want you to use it properly. It’s as simple as that’.

For cost reasons alone, it would be unrealistic to assume that all vehicles within a fleet, especially the larger fleets, will be fitted with telematics units. Douglas said that he has 21 units operating on a trial basis across the 271 vehicles he manages. We expect many more organisations will initially be looking to trial systems out in a portion of their fleet and to evaluate whether the benefits materialise. Douglas is an advocate of the driver safety benefits and said: ”The system we use has significantly improved driver safety. I would recommend looking at telematics if that is one of your primary concerns.”

The market place will inevitably become increasingly competitive. ACA Research anticipates that technology companies will face competition from OEMs. More fleet vehicles will be coming off manufacturers’ production lines with in-built telematics systems. It is then up to organisations to decide whether or not to activate these systems.

The size of the prize for the telematics market is significant. ACA Research estimates there are approximately 340,000 organisations across Australia operating a total of 3,500,000 fleet vehicles.  While we expect more of the larger businesses with over 250 fleet vehicles to be adopting telematics in the near future, the total number of vehicles they manage is significant as is the opportunity for those businesses developing telematics systems.

ACA Research plans to conduct further research into telematics. Please get in touch with us for further details about this exciting opportunity. Alternatively, to keep up to date with our latest research, subscribe to "in the headlights" below:


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