The International Truck, Trailer and Equipment Show (ITTES) takes place from 3rd-6th April. Some of the latest technology will be on show including new telematics systems that provide reporting about the location, movement and safety of trucks, trailers, drivers and freight. In this blog we have a quick look into the rapid progression of telematics technology and its future in helping optimise fleets and freight around the world.
The Customer Journey for Telematics
As we have previously reported, telematics systems are commonly used among road freight businesses with larger fleets. Fundamentally, this technology offers the potential for real time connectivity across multiple assets. Despite the enormous potential on offer, our research shows that about half of the businesses that say they are using a telematics system are only using GPS features and are not currently accessing other more advanced capabilities.
The majority of those companies that have taken advantage of a wider range of telematics features are predominantly using driver safety features including fatigue management and driver performance monitoring.
GPS is an entry to the telematics market for some organisations and provides an opportunity to road test products in terms of:
- Vehicle tracking
- Delivery tracking by customers
- Traffic / route information
- Route planning / scheduling
- Order taking / dispatch
- Electronic proof of delivery
But we believe the customer telematics journey has potential to progress from this starting point and that there is a maturity curve (see image below) for this technology. This product maturity model, which was originally developed by Axeda for connected products in general, has different levels, with the value proposition increasing as organisations move along the curve.
Level 1 - Road freight companies that operate unconnected vehicles and use traditional technology to track and communicate.
Level 2 - Road freight transport companies that operate connected vehicles and use GPS technology to monitor and track vehicle and freight location and movement.
Level 3 - Road freight transport companies that extend telematics functionality to include cost reduction, productivity improvement and safety management measures.
Level 4 - Road freight transport companies that fully utilise the analytic capabilities of the technology including predictive maintenance and data leveraging to offer customers an enhanced experience.
Level 5 - Road freight transport companies that optimise the benefits of fully integrated communications and tracking technologies, with hardware platforms and software applications operating across vehicles, associated assets, drivers and freight.
Level 6 - Road freight transport companies that use this technology to innovate their service offering and monetise the value of the data that is collected.
The Evolution of the Telematics Market
The telematics maturity curve portrays a smooth and seamless transition across each evolutionary stage. The reality is likely to be a somewhat bumpier journey.
Progression will depend on whether the value created by this technology significantly outweighs the investment and ongoing running costs.
There is also the possibility of regulations being introduced which mandate the use of this rechnology to monitor compliance with mandatory safety requirements. This could result in the technology being seen primarily as a driver safety product.
The take-up of User Based Insurance (UBI), which has grown rapidly in North America and Europe, may also be a game changer for the telematics industry. It is claimed that UBI can help reduce insurance premiums, promote safer driving behaviours and reduce the risk of road accidents.
We are also likely to see more choice in the market. The “black box” telematics providers are likely to face increasing competition from:
i) Software providers that provide lower cost telematics solutions via tablets and smartphone and
ii) OEMs who offer in-built solutions. For example, Isuzu has announced it will launch its telematics program, which provides an extensive range of real-time vehicle tracking and monitoring systems, at The International Truck And Trailer and Equipment Show.
Meet up with ACA Research at ITTES
ACA Research will be attending ITTES and we look forward to meeting with the providers of telematics systems. Please contact us if you would like to meet with us to discuss your needs around telematics or any other topics about the industry.
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