The Car and Truck Fleet and Leasing Management Magazine

How Telematics Increases Fleet Fuel Savings

June 2016, by Chris Wolski - Also by this author

Photo courtesy iStockphoto.com.
Photo courtesy iStockphoto.com.

Telematics have given fleets greater insights into their operations, helping them to become safer and more efficient.

Perhaps one of the seminal moments in telematics’ positive impact on fleet efficiency came with the discovery that idling not only was prevalent among fleets, but how much it was impacting the bottom line.

This single discovery has changed the way many fleets operate their vehicles and has led to millions of dollars in savings. While this may be one of the more well-known ways fleets have used telematics to save fuel, there are more ways fleets are saving fuel on a day-to-day basis thanks to the evolution of telematics technology.

Picking the Low Hanging Fruit

While more fleets are using telematics, adoption still remains relatively low. This means that many fleets are benefiting from the immediate gains that are derived from telematics technology.

At A Glance

Telematics have given fleet managers a number of ways to control fuel spend, including:

  • Integrating fuel card and telematics data.
  • Optimizing routing.
  • Monitoring vehicle health data.
  • “Gamifying” driver behavior.

“The most common ways are the no brainers — I’m not saying simple to do — the most obvious is that if you drive less, you’ll use less fuel,” said Chris Ransom, manager of solution architects for Verizon Telematics. “If you can do the same amount of work in fewer miles, then you’re in great shape in terms of your fuel savings. For me that’s the No. 1 way fleets are saving fuel using telematics. It’s just the operational oversight of where the vehicles are and were. There’s always wasted miles for every company, and telematics help you uncover what those are. The second one that’s really obvious to me is driver behavior. If you can drive at lower speeds and not accelerate too quickly or idle, you can save fuel as well. Both from a fuel savings way it’s the biggest, simplest way to save fuel.”

But this is just the beginning of the insight today’s telematics solutions can provide to help fleets save on their fuel spends.

“Telematics solutions help fleets save fuel by providing insight and coaching opportunities for idling, speeding, rapid acceleration, routing, miles driven, unauthorized usage, and maintenance,” said Ryan Driscoll, marketing director, GPS Insight. “Eliminating speeding and rapid acceleration has also been found to save fuel. Optimizing routing and eliminating unauthorized usage reduce miles driven, and, therefore, the amount of fuel used. Optimizing maintenance procedures to never skip PMs will increase MPG and save on fuel.”

Those fleets that have been using telematics for some time have seen additional benefits, added Ransom.

“Those customers who are used to using it, are benefiting from new technology. So if we look at six or seven years — you could measure your speed or idling, you didn’t know when they were harsh accelerating, so advances in technology are continuing let you ratchet that fuel dial down, because you’re getting a better picture into your fleet,” he said.

For example, some telematics solutions allow fleets to measure the difference between wasted-mile idling and productive idling, such as using the PTO to power a boom.

“The information has become more granular over the years,” Driscoll said. “Instead of just idle and speeding data, we now get accelerometer data to determine more about driver behavior.”

Telematics has been giving more insight into how drivers are operating their vehicles, helping fleet managers to zero in on behaviors that are impacting fleet efficiency and excessive fuel usage.

“Telematics solutions help fleets better understand their fuel consumption, which is the first step to improving fuel efficiency,” said German Parra, director of product management for Lytx. “Collected data has taught us that hard acceleration, braking and cornering, aggressively driving over the speed limit, and idling are all key factors contributing to high fuel consumption. Knowing a driver’s personal pattern helps managers coach them on how to improve driving behavior and become safer and more fuel-efficient drivers.”

The result of these insights, taken together, is to give a more three-dimensional view of the fleet and how it operates.

“Fuel savings comes in many different ways when it comes to telematics,” said Bernie Kavanagh, vice president of North American Fleet for WEX Inc. “The traditional approaches to reducing idling time and optimizing routing are always at the top of the list. As the data returned from the devices has become richer and more frequent, savings opportunities have evolved into driver behavior components such as reducing harsh braking and accelerating, eliminating speeding, and even routing to lower priced fueling locations based on geography.”

Integrating Fuel Data and Telematics

Among the more traditional ways fleets have used to control fuel spend is through the use of fuel cards (see “Fleet Best Practices for Saving Money at the Pump & in the Tank” in the May issue of Automotive Fleet), but telematics is giving fleets new depth into how this long-time tool can be used to improve fuel efficiency.

“We work with a lot of different telematics providers and we see that it’s all about providing actionable data. So if you can take our Voyager Card payment information data and marry that up with telematics data, and both of those are very good information on their own, but they become very actionable when you put them together. And they really help drive better decisions that fleets can make around not only lowering fuel costs, lowering maintenance costs, and increasing safety,” said Jeff Pape, SVP product and marketing for the Global Transportation Group for U.S. Bank.

This integration is part of a larger trend, according to Kavanagh of WEX Inc.

“The integration of data sets is the next step in the evolution of not only telematics but analytics as well,” he said. “Integrating fueling data for example not only helps to identify lower cost options, but provides routing instructions to where the driver should be going and returns benchmarking reports to track success.”

Telematics can also help fleet managers keep an eye on potential abuse of fleet cards, according to Todd Ewing, director of product marketing for Fleetmatics.

“One specific feature related to fuel that Fleetmatics helped pioneer was the integration of our telematics data with fuel card transaction data to give customers an accurate sense of not only MPG, but also events where a fuel card assigned to a specific vehicle is used at a location different than where the actual vehicle is at the same time — indicating theft or card abuse,” he said.

Toby Weir-Jones, product line management director, FleetOutlook for CalAmp, outlined the specifics of how telematics is helping to control abuse of fuel cards.

“By analyzing location, fuel type, and tank volume, companies can determine if the fuel card is being used only for company jobs in company vehicles, or if extra fuel is being purchased for personal use,” he said.

This is particularly useful if the fleet has a personal-use policy.

“When company vehicles are used and taken home after business hours, fleet managers were able to identify any unauthorized use of vehicles that spent fuel for personal use,” said Wyn Partington, VP of marketing for NexTraq. “In addition, fuel card integration and tracking allows managers to identify fuel slippage that they may not have been aware of.” 

Optimizing Routing

With its roots in GPS, it’s not surprising that route optimization is another way fleets are saving fuel.

“Miles driven is a huge area for potential savings for a fleet,” observed Driscoll of GPS Insight. “If each vehicle drives just a few miles less per day, the savings could be huge. Telematics reduces miles driven by optimizing routing and eliminating off-hours usage or unauthorized usage.”

This off-hours usage or other day-to-day inefficiencies could be an untapped area of potential savings that telematics can shine a light on.

“Pertaining to miles driven, investigate usage of take-home vehicles and unnecessary trips,” said Driscoll. “A big chunk of the fuel bill could derive from weekend or after-hours usage of take home vehicles. Drivers may have favorite coffee shops or lunch spots that may be across town. A great way to reduce fuel costs is to eliminate those trips and ask that they get coffee somewhere close by. This reduction in mileage can yield a big savings fleet wide.”

Better use of assets is the key factor to this new “aha” moment.

“If you can send drivers on the most efficient route, and/or if you have discounts at certain locations, wouldn’t it be ideal if your driver knew that in 10 miles there’s a location where the company has a discount, and he or she will stop at that location versus at the one he or she usually stops at because it’s convenient but not optimal for the company?” said Pape of U.S. Bank. “So we really think if you can provide drivers and companies with the best route optimization approach, that’s going to be the next significant savings for fleets.”

Monitoring Vehicle Health

The ability to view vehicle health information holistically is another area that has allowed fleets to find fuel and other cost savings.

“At Lytx, we benchmark how vehicles are performing against other similar fleets. For example, one of our clients used the analytics we provided to identify the worst performing vehicles in their fleet, which were also some of the worst across our entire database of similar vehicles. They picked the worst 10 percent of vehicles to bring in for maintenance and diagnostics checks in their shops. Quickly, they identified all of them had some sort of unreported maintenance issue, like engine lights on and missed tune-ups,” said Parra of Lytx.

The financial benefits to the bottom line were clear.

“Some of the issues took only $30-$50 to fix, but, if left unattended for a couple of months, could have cost close to a $1,000 per vehicle to replace broken catalytic converters,” Parra continued. “The holistic approach meant these clients were able to fix those issues, tune up inefficient vehicles, address drivers’ idling behavior, and continue to coach on video-based safe driving, which, in return, could save $400 to $900 per vehicle per year in fuel efficiency improvements alone.”

Vehicle health reports can give fleets a deep dive into every aspect of the vehicle’s operation with immediate benefits across the board.

“With reports on vehicle health, companies can minimize operating costs and maximize fuel savings with real-time monitoring of oil life, tire pressure, engine hours, and idling,” said Mark Wallin, vice president, product management for Telogis. “It enables companies to share vehicle diagnostics and maintenance reports with service centers to ensure proactive fleet maintenance, avoid more serious and costly breakdowns, and maximize fleet uptime.”

Telematics solutions can also tell fleet managers when it’s time to schedule preventive maintenance.

“Well-maintained vehicles run at their most fuel-efficient levels and telematics solutions offer comprehensive fuel maintenance modules, which remind fleet managers of when vehicles are due for routine oil changes, tire checkups and other minor maintenance needs,” said Partington of NexTraq.

‘Gamifying’ Operations

Of course it’s not just the vehicle that needs to be kept operating at peak performance to save fuel, but drivers need to also be performing at their level best.

One way to encourage this is by implementing a “gamification” program, which puts drivers either in direct competition with other drivers or as members of competing teams of company drivers for some sort of monetary or other reward.

“Driver behavior tools, such as gamification, are seeing much greater adoption with powerful analytics and rich data that’s coming straight off of the embedded OEM connection in the vehicles. This inspires a more productive and safe mobile workforce,” said Wallin of Telogis. “Telogis Coach is a mobile gamification app that uses metrics derived from the rich data pulled from a company’s connected vehicles, and creates a snapshot or leaderboard for workers in the field. The ultimate goal is to create friendly competition among teams to improve performance metrics the company sets and empower people to compete against each other to be the best — it’s hugely motivating.”

There are other ways that fleets are helping drivers stay on track and drive more efficiently.

“We have fleets that are testing real-time text notifications to ‘remind’ drivers of policies that may not have been adhered to,” said Kavanagh of WEX Inc. “In a very short period of time, you can see the behavior change and the savings begin to accumulate. We also have some customers using the safe driving records to reward the behavior of their drivers, a true win-win for the fleet.” 

Thinking Outside of the Box

While telematics have already established a large playbook of tactics and strategies to help fleets save fuel, more techniques are being developed constantly thanks to the ability to collect an increasing amount of vehicle data.

“Imagine a scenario where you start with a telematics company, but two years later you have real-world experience of what your fuel mileage is, not what the EPA says it is on the sticker, but what Vehicle A vs. Vehicle B is doing in a real environment and you understand the usage of your vehicles really, really well,” said Ransom of Verizon Telematics. “Now you can go source vehicles that you need, so now maybe I can replace a pickup with a hybrid sedan, because I don’t need a pickup to do that work, I can use a hybrid, and now I get an immediate fuel benefit, and that’s a vehicle benefit, but I wouldn’t have known to get that vehicle if I didn’t know my work patterns or the type of work that my vehicles did, which telematics tells me about. Or as part of it, I know that I get better gasoline mileage from Vehicle A than my mileage from Vehicle B.”

Lytx is also benchmarking vehicles in this way across all its fleet customers, and is working to better identify issues caused by driver behaviors that impact fuel usage.

“Looking at a vehicle’s RPMs and throttle in different ways than data-only telematics has looked at them in the past, we can turn that information into ‘behaviors’ that a driver can seek to improve,” said Parra of Lytx. “For example, we can tell a driver that he is only better than 15% of drivers with similar vehicles when it comes to managing his throttle and tell him exactly what he is doing that he could improve on.”

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