The Benefits of Telematics for Small Fleet Management!


Commercial fleet managers face a number of challenges, from regulatory compliance to budgetary issues. Juggling these challenges can be overwhelming. Managers have to oversee their employees, optimize routes, manage fuel consumption, and implement safety measures, to name just a few typical tasks.

Fortunately, technology can help. Adopting a data-driven solution, like telematics, can transform just about any operation, helping managers boost efficiency, cut costs, and achieve compliance.

Here, we’ll explain how telematics works and why it is so important for today’s small fleets.   

What is Telematics?

Telematics is a multi-component solution that collects and stores highly detailed vehicular data. Managers can analyze that data for insights into costs, driver behavior, maintenance needs, and more.

Typically, a telematics solution consists of three parts:

  1.  A GPS system that tracks each vehicle’s location and movements
  2.  A “black box” that connects directly to each vehicle’s OBD2 and collects data from the onboard computer
  3.  A server which receives and stores data from the black box

What Does a Telematics Solution Do?

Telematics solutions are often confused with GPS systems. GPS is a key part of telematics software, but a telematics solution goes beyond simply tracking vehicles.

Telematics leverages data from vehicles’ onboard computers to create a detailed picture of driver behavior and vehicle condition. Telematcs data includes granular information like:

  • Idling time
  • Driving patterns (like harsh braking and speeding)
  • Driver behavior like distracted driving, fatigue, and lack of seat belt use
  • Engine fault codes

Collecting this data gives fleet managers the insights they need to increase efficiency throughout the operation. It’s like having eyes and ears in the cab of every truck in the fleet.

What are the Benefits of Telematics for Small Fleets?

Small fleets face a unique set of challenges. They often have limited resources, which means that they need to maximize their use of their labor force and their fleet. Small businesses are also more financially vulnerable, so that expensive repairs – or accidents – impact them more sharply.

Using telematics can can help small fleets overcome these challenges and can make fleet management more efficient by just about every metric.

In the past, only larger fleets used data-driven methods like telematics, while smaller operations tended to rely on “hunches” and legacy approaches. Today, the technology is affordable enough for smaller teams to use too – and it’s transforming operations.

Here are some of the ways telematics can benefit smaller teams:

Increasing Safety

Safety protocols are particularly important for small fleets, given the number of vehicles in operation. One damaged truck can mean that the company can no longer make all of its deliveries on time. The cost of repairs can also be devastating for a small fleet with a lean budget.

Telematics can help small fleets stay up and running for longer. When used correctly, telematics data helps managers prevent accidents and avoid costly auto shop services

Telematics promotes safety by tracking  driving behavior in real-time. It can flag dangerous driving practices like speeding, tailgating, or hard braking. Research shows that using telematics cuts down significantly on these dangerous driving practices – especially when managers provide extra coaching to drivers who are behaving unsafely.

Telematics solutions can issue automatic crash notifications and alerts when cars develop engine trouble. This ensures that accidents always get immediate attention and that vehicles always get the maintenance work they need to stay in optimal condition. Driving with a well-tuned vehicle makes it easier to stay safe on the road.

Reducing Costs

Cost is a major concern for small fleets. Unlike larger operations, small fleets often don’t have a reserve fund to pay for unexpected expenses. Tracking and monitoring costs with a telematics system makes it easier to budget and forecast.

Telematics data helps managers track fuel consumption and map more efficient routes. Practices like route optimization and load management can significantly reduce the cost of operating a small fleet by reducing fuel consumption and maximizing the productivity of each driver so that labor costs are minimized.

Managers can use telematics data to streamline routes and maximize productivity for each route. For example, a delivery van may be able to serve more customers in the same amount of time, simply by making small changes in their route. The result is increased revenue and a reduced cost of labor.

Regulatory Compliance

Transportation and logistics companies are subject to strict regulations. In the United States, truckers are required to comply with DOT regulations; EU and Australian companies face their own sets of regulatory requirements.

For small fleets, regulatory compliance can feel like a major burden. The fines can be onerous. Keeping up with the documentation can also be challenging, especially since most small fleets are operating with a very limited administrative staff. 

Managers can use telematics data collection, monitoring, and documentation capabilities to meet compliance requirements more easily and avoid fines. In North America, managers can also use their telematics solutions to automate IFTA reporting, ensuring compliance with the fuel tax requirements.

Identifying Room for Improvement

Managers are tasked with continually looking for ways to improve their operations. Telematics gives managers eyes and ears everywhere so that they can spot areas of weakness. This means that small fleets can scale, taking on more drivers and covering more territory, without needing to hire more managerial staff.

For example, telematics makes it easy to identify reckless drivers by flagging behaviors like tailgating and speeding. Managers can provide extra, targeted coaching to the drivers who need it, and can monitor their performance closely.

Telematics also flags maintenance needs, so that managers can make smart choices about how to allocate maintenance resources.

These are just a few examples of the way that a data-driven approach to management can increase efficiency.

What are the Drawbacks of Telematics?

Every method has at least one drawback, and telematics is no exception. Some managers feel overwhelmed by all the detail produced by their telematics solutions.

The solution is simple, fortunately. There is a wide range of trucking software for small fleets that can analyze telematics data and organize it in an easy-to-read format. Applications range from simple spreadsheets to cutting edge AI; there is something to fit every budget and every need.

Telematics is a modern solution to a long-standing problem: how can managers make the best possible use of their limited resources? A data-driven approach, combined with modern analytics software, is the best possible answer to this question.

Article and permission to publish here provided by Graham Perry. Originally written for Supply Chain Game Changer and published on February 29, 2024.

Cover photo by Yucel Moran on Unsplash.