There can be little argument that 2016 was a significant year for the fleet telematics industry with mergers, 2G sunsetting, and the increasing use of connected technology among the top developments for the year.
Automotive Fleet asked those in the industry what they saw as the top events of 2016. Their answers follow in no particular order:
1. The Purchase of Telogis and Fleetmatics by Verizon
Verizon’s purchase of Telogis and Fleetmatics was, perhaps, one of the most significant events of 2016, pointing to a period of consolidation in the industry as it matures.
Kurt Thearling, VP of analytics for WEX sees these acquisitions as transformative.
“These acquisitions will allow for servicing of a broad spectrum of the market, from small to local to OTR, with a worldwide presence,” he said. “They have a lot to do to integrate these businesses, but in the long run they will be collecting data across the full breadth of commercial fleets. This is going to give them an outsized understanding of fleet behaviors.”
The acquisitions may offer opportunities and challenges for competing brands.
“These acquisitions present both an opportunity and a threat to competing telematics providers,” said Ryan Driscoll, marketing director for GPS Insight. “We feel that providers will benefit from these acquisitions as a result of the significant organizational changes, and the challenges involved therein, that will be required to successfully merge the respective products. There is also no question that it presents a significant threat as the acquisitions have resulted in a very large competitor with almost endless resources, all sitting behind a very powerful brand.”
2. AT&T’s 2G Sunset
AT&T’s 2G sunset had an impact on telematics providers and the fleets they serve, which have created some benefits for fleets as providers worked to retain these customers with legacy systems.
“Many fleets have opted to explore other options in the marketplace given their need to replace their legacy hardware on the 2G GSM network, which has led to higher churn across the industry,” said Driscoll of GPS Insight. “Telematics providers have put together programs to win new business due to the sunset, and special programs to retain customers, e.g. low-cost or free device swaps.”
The 2G sunset has helped fleets by allowing them to upgrade their technology, but Colin Sutherland, executive vice president, sales & marketing for Geotab, warned that these upgrades shouldn’t be seen as adding to the market, simply updating it.
“Throughout 2016, the sunset of AT&T’s 2G network has enabled customers to upgrade from older GPS-only tracking technology to engine diagnostics and safety related features,” he said. “The impact of AT&T’s 2G sunset meant that industry suppliers ‘shipped’ a large number of devices to swap older technology, which should not be confused with fleet vehicles that established new telematics connections.”
3. OEM Products
This year has seen the continued expansion of OEMs who are including telematics devices into their vehicles at the factory, making them key telematics players.
“Increasingly telematics is being ‘built-in’ with companies such as Telogis, a Verizon Company, and our partners Ford, GM, Hino, Volvo, Mack, Nissan, and Isuzu leading the way,” said Kelly Frey, VP product marketing for Telogis, a Verizon Company. “At our recent Latitude conference this year we announced a new built-in telematics solution with John Deere that extends built-in solutions with our other off-road equipment providers such as Manitowoc, Case, Caterpillar, Volvo, and others.”
This trend could be seen as a natural extension of the increasingly connected world where everything from light bulbs to pickup trucks is connected, observed Thearling of WEX.
“Having a vehicle come straight off the assembly line with the ability to collect and transmit information about a vehicle’s operation and environment will have the potential to help fleet managers lower costs and maximize fleet effectiveness,” he added. “The challenge with this trend is that the manufacturers might be tempted to limit access to this data, creating walled gardens that prevent third parties, repair shops, and even customers from accessing this data. If the manufacturers limit the use of this data, they risk slowing adoption and/or Balkanizing the market.”
As a corollary, aftermarket solutions are still a key part of the industry, according to Jeffrey Newman, vice president of business development for CalAmp.
“For dealers, new connected car applications are improving dealer inventory management and enhancing the customer buying experience,” he said. “For consumers, these applications are tightly integrating the vehicle with the consumer’s connected life and delivering enhanced safety features.”
4. Telematics Driving Operational Efficiencies
The biggest argument for fleets to implement telematics is the increase in efficiency. According to Sutherland of Geotab, the past year has changed the bottom-line relationship between fleets and their companies thanks, at least in part, to telematics.
“We have seen our customers shift their thinking of a vehicle from an operating expense to a profit driver,” he explained. “With a strong focus on extending telematics data from fleet expense management to enriching the data with back office software, telematics is becoming a key source of business intelligence.”
Efficiency has also extended beyond the vehicle.
“Enhancements in smart vehicle technology are streamlining the connectivity between fleet information and worker information,” said Newman of CalAmp. “Historically, typical fleet applications provided vehicle location information in parallel with work order information. Today’s technology innovations are allowing for significantly enhanced vehicle, driver, and route information.”
5. Greater Connection Between Driver and Telematics Solutions
Connected with this growing efficiency is the change in the locus of telematics’ focus from the vehicle first to the driver and his or her behavior in the vehicle.
“There has been a rise of a new era where the connected worker is really an extension of the connected vehicle in terms of the opportunity to connect, optimize, and automate the modern commercial operation,” said Frey of Telogis, a Verizon Company. “Progressive fleets are realizing that telematics is really better represented by the term mobile resource management (MRM), in that it encompasses so much more than just the vehicle telematics.”
The benefits of this further connection may not be immediately apparent.
“The amount of fleet data that is being collected and managed is growing quickly. As would be expected, telematics data is a critical component of this. Throw in maintenance, fuel, accident, and vehicle data and you would know a lot about your fleet. The hard part is putting it all together to paint a rich picture of the behaviors you care about, things like risk and costs,” said Thearling of WEX. “The value of these kinds of platforms usually starts out slow, answering simple counting questions. But quickly they can be used to answer more complex questions, veering into the world of predictive analytics. Distilling these insights into scorecards that are aligned with business goals will give fleet managers the ability to make data-driven decisions, and ultimately make better decisions.”
Most important, telematics continues to drive fleets’ quest for improved safety.
“Fleet managers now have access to extensive vehicle diagnostic interface data that can be used to track vehicle speed and location, and monitor key driver behavior metrics like hard braking, cornering and acceleration,” said Newman of CalAmp. “These advanced technologies enhance operational efficiencies, reduce costs, and improve driver safety.”
6. The ELD Mandate
Perhaps one of the most controversial developments in 2016 was the announcement that the ELD mandate will go into effect by early December 2017.
“As a result, many telematics providers are devoting significant resources to their ELD compliance efforts,” said Driscoll of GPS Insight. “Most providers are now waiting to certify their solutions until the FMCSA announces the universal standards regulating how enforcement officers will be able to quickly verify e-logs regardless of the ELD provider.”
7. The Emergence the Chief Mobile Officer as a Strategic Role in the Mobile Enterprise
A less obvious trend has been an evolution of the role of a new fleet professional type with the emergence of the chief mobile officer or CMO.
“The CMO is responsible for everything mobile, everything outside the four walls of the organization,” said Frey of Telogis, a Verizon Company. “It’s really about the elevation of the traditional fleet manager’s role to something much more strategic, especially for organizations where the money is earned outside the four walls, such as in the distribution, construction, and services industries, to name a few.”