How Fleets Are Using Cellular and its Future Applications

Over the past few years the cellular network has grown to encompass areas in which 95 percent of Americans live and work. Along with this expansion of coverage, cellular phone prices have declined dramatically. Cellular phones can be purchased today for $200-$300, or even less if you're willing to sign up for airtime agreements and minimum subscription periods packaged with the phones.

The extensive cellular coverage and low prices, along with consolidated billings, have caused an increasing number of companies to adopt cellular communications for their fleets. Cellular users range from fleets with fewer than 10 vehicles to major corporations with thousands of units. Sales departments are the largest corporate users of cellular, but the use of cellular by field technicians and delivery personnel is increasing as companies have become more willing to invest in the tools needed to improve customer service.

Cellular Use In Sales & Service

Dallas Security Systems in Dallas, TX, has installed cellular phones in 16 corporate vehicles used by managers, salesmen, and technicians. According to Kevin Meadows, operations manager, cellular phones enable the company's field personnel to provide faster response to its customers. When a customer reports a problem with their security system, a technician is contacted via pager or two-way radio. The technician can then use the cellular phone to communicate directly with the customer to determine the nature of the problem and to let the customer know when he or she will arrive. Meadows feels that cellular enables the company to provide a higher level of service, which helps retain customers, as well as add new customers generated through referrals.

Meadows stated that Dallas Security Systems controls cellular cost by limiting its sales force to $100 per month in reimbursable expenses. Cellular expenses above this amount are paid by the salesperson. Although technicians are sometimes allowed a higher usage level when necessary, their airtime bill seldom exceeds $150 a month.

Meadows feels the company's cellular bill of $1,500-$1,600 a month is more than offset by the increase in business resulting from faster response to customer needs.

Columbia Pipe & Supply in Chicago, IL, has equipped 35 sales cars and delivery trucks with cellular phones. Ken Proia, warehouse supervisor, reports that the company has been using cellular for more than a year. According to Proia, the field sales force needed more efficient communications with customers and company headquarters. Management responded by giving salespeople the opportunity to earn company-purchased cellular phones, based on performance and to reimburse a major portion of the airtime charges.

A number of Columbia Pipe & Supply's trucks also have been equipped with cellular phones. Drivers are now able to provide customers with an accurate estimate of their arrival time - saving time for both the driver and the customer. While still using beepers and two-way radios, Columbia finds that the enhanced customer service is well worth the $75 a month average cellular bill.

A&R Transport, in San Bernardino, CA, started using cellular phones about 10 years ago. According to Jerry Curl, a manager with A&R, about 75percent of the company's fleet of 100-plus trucks currently have cellular phones. Curl says the reason is improved communications with the drivers and customers. The extensive coverage available with cellular allows for continuous communications (in most areas) as the trucks move between cities. This is particularly important when transporting hazardous materials. While A&R, like all companies, is always looking for ways to reduce costs, Curl feels the $100 a month average airtime bill is more than justified by the improvement it provides in fleet control and customer service.

Trends in Cellular Management

A number of cellular management programs are currently being offered to help nationally-dispersed fleet manage cellular expenses.

Overall, these programs seek to minimize the cost of cellular and to provide companies an alternative to dealing with multiple cellular operators, rate plans, and equipment suppliers. Fleet managers are provided with a single point of contact to simplify program administration.

The cellular management programs offer reports that can be customized to highlight data specified by company management. Exception reports can highlight the most expensive calls, longest calls, most frequently called numbers, or other desired data. Cellular usage can be analyzed on a daily basis or compared on a quarterly or annual basis.

Mobile Data Transmission

Fleet use of cellular for voice communication will continue to grow as more companies realize that the cost of cellular is offset by increased efficiency and customer service. In addition, fleet use of cellular also will be dramatically impacted over the next few years by the deployment of Cellular Digital Packet Data (CDPD). McCaw Cellular and a number of major cellular operating companies will begin, before the end of 1993, to implement an overlay of the current cellular network that will make it possible to communicate data over cellular at an estimated cost of $.05 per packet (up to 136 bytes). The use of cellular for mobile data transmission today is limited by the relatively high minimum charge incurred for transmitting even short data messages. CDPD will reduce this charge to a fraction of it current level. With CDPD, the cellular network will support data rates of up to 19,200 bps.

The implementation of CDPD will enable fleets to transmit data very economically from mobile data very economically from mobile data terminals installed in vehicles or from hand-held devices. In addition to status and free text messaging to and from vehicles, CDPD will support credit card verification, vehicle location, emergency messages, and other services.

The preceding article was written by Clement Driscoll, president of C.J. Driscoll & Associates in Rancho Palos Verdes. CA.