Better exploitation of telematics looms: ACA Research

Systems have huge potential but must prove profitability for smaller transport operations

Better exploitation of telematics looms: ACA Research
Large firms, such as Linfox, are taking advantage of telematics


Market research and strategy firm ACA Research believes the relatively modest take-up of telematics in the wider trucking industry may be at a tipping point but much depends on proof of value for all but the biggest firms.

While telematics systems are used more thoroughly in the biggest transport firms, smaller ones are struggling to take advantage all the services available.

"Fundamentally, this technology offers the potential for real time connectivity across multiple assets," ACA says.

"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 [global positions system] 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."

It notes that GPS is an entry to the telematics market for some organisations and provides an opportunity to road test products in terms of navigation, vehicle tracking, delivery tracking by customers, traffic and route information, route planning and scheduling, order taking and dispatch, along with electronic proof of delivery.

ACA has used a ‘maturity curve’ with the value proposition increasing as organisations move along the curve.

The curve is based on a six level, three section graph developed by US cloud platform provider Axeda.

The three sections are ‘connect’, ‘manage’ and ‘innovate’ while the levels are for Road freight companies that:

  • operate unconnected vehicles and use traditional technology to track and communicate
  • operate connected vehicles and use GPS technology to monitor and track vehicle and freight location and movement
  • extend telematics functionality to include cost reduction, productivity improvement and safety management measures
  • fully utilise the analytic capabilities of the technology including predictive maintenance and data leveraging to offer customers an enhanced experience
  • optimise the benefits of fully integrated communications and tracking technologies, with hardware platforms and software applications operating across vehicles, associated assets, drivers and freight
  • use telematics to innovate their service offering and monetise the value of the data that is collected.

"Progression will depend on whether the value created by telematics significantly outweighs the investment and ongoing running costs," ACA’s researchers add. 

"There is also the possibility of regulations being introduced which mandate the use of telematics to monitor compliance with mandatory safety requirements.

"This could result in telematics 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."

The researchers foresee more choice in the market, with "black box" telematics providers likely to face increasing competition from software providers that provide lower cost telematics solutions through tablets and smartphone and original equipment manufacturers who offer in-built solutions.

ACA notes that Isuzu is to launch its telematics program, which provides an extensive range of real-time vehicle tracking and monitoring systems, at this week’s International Truck, Trailer and Equipment Show (ITTES) in Melbourne.

ACA will be there, too.

The research item can be found here.

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