Telematics Explained: How It Works and Why It Matters

As a business owner or fleet manager, vehicle telematics can help you transform your fleet into a safer, more efficient operation. It can also empower you with the data you need to make better decisions about your business and provide your customers with the best possible service. 

In this guide, we’ll discuss what telematics is, how it works and why it is the right choice for your fleet.

An Introduction to Telematics

What is telematics? Telematics refers to the transmission of electronically collected information over a long distance from a relevant point of interest — such as a vehicle — to an end-user. Vehicle telematics is a method of monitoring and gathering the logistics of a vehicle or fleet. Telematics technology utilizes computer systems that collect data in several key areas of operation, including driver location and behavior, fuel level and vehicle status, route tracking and more. You may have even encountered telematics in your personal life. For example, telematics technology in cars can help auto insurance companies gather data and analyze your driving habits. Telematics technology is also behind many modern-day car features, like active weather alerts.

Over the years, telematics technology has evolved from basic GPS tracking to include advanced sensors, diagnostics, and communications. This has enabled expanded functionality that makes telematics critical for fleets of all sizes. It provides them with real-time visibility, full accountability, and data-driven decision-making. All of these can be powerful differentiators and enhance the competitive edge of virtually any type of fleet operations.

Several industries and vehicles can utilize tracking via telematics technology, including:

Personal vehicles, such as your car
Truck fleets
Boats — both personal and cargo
School buses
Travel trailers
Heavy equipment
Tow trucks
HVAC and cable companies

Whether you manage a few vehicles or an entire fleet, any company that regularly transports assets can benefit from using a telematics system. 

How Does Telematics Work?

Depending on the features and settings you use, telematics technology works to collect, transfer and help you make sense of important data from the vehicles in your fleet. 

Here’s how it works:

A device captures relevant vehicle data: A telematics device is installed in each vehicle in your fleet, usually in a discreet location. Throughout the operation of each vehicle, this device will harvest information such as speed, acceleration, idle time and vehicle location.
That data is transferred to the telematics provider: The installed telematics device will then transmit this information to a telematics provider via some form of wireless connection. If you choose a telematics system with Smart Tracking enabled, expect to receive updates whenever specific parameters are met, instead of being flooded with dozens or hundreds of unimportant information. For example, Smart Tracking will flag when the vehicle reaches a standstill or when it detects a change in the vehicle’s power supply.
The data is interpreted so you can analyze results: Once the telematics data has been collected and transferred, it is then interpreted and sent to the end-user to be analyzed. Business owners and fleet managers can access this telematics information via computer, smartphone or another internet-enabled device, or export it into a document or spreadsheet. You can then use this information to track patterns, trends and make a plan of action.

The data collected by the telematics varies, depending on the company you work with and the features you choose to track. Depending on your specific needs, you can filter which features you would like to manage, as well as which data is included in regular reports. Fleet managers and business owners can monitor things like:

Fleet location
Travel speed
Acceleration or frequent braking
Idle and stop time
Total distance or time traveled
Total fuel consumption
Engine and vehicle data
Problems with the vehicle

Benefits of Telematics for Fleet Management

So, what kind of benefits can you expect when you implement a telematics solution into your operations? Some of the benefits of telematics systems include the ability to provide better customer service, operate more efficiently and promote driver safety:

1. Provide Better Customer Service 

Offering quality customer service is an essential part of running your business. Occasional delays of arrival times are often unavoidable due to uncontrollable factors, such as road closures or inclement weather. 

With a telematics monitoring system in place, you can provide your customers with better customer service by knowing where a customer’s crew is throughout the entire process and keeping them informed about any changes in status or anticipated arrival time. If your drivers are delivering a shipment, you can also verify that assets are delivered to the right location.

2. Operate More Efficiently 

With the right telematics system, you can operate more efficiently and reduce the amount of time and money it takes to operate your business. Here are just a few examples of how telematics devices can improve your operations:

Reduced operational costs: Reduce operational costs by correcting behaviors and planning routes that minimize fuel waste. You can also avoid costly roadblocks or unexpected reroutes. Telematics reduces how much paperwork your drivers are responsible for, which saves money and time typically associated with things like time cards or reports. Finally, since telematics promotes safer driving, you may be able to reduce costs associated with high insurance, emergencies, accidents and more.
Enhanced security: By monitoring and tracking your assets, you can help prevent after-hours use of vehicles, identify missing shipments, and monitor locations to ensure your assets are not stolen. Telematics also provides you with real-time status updates regarding your drivers and their cargo. For some industries, this enhanced security can offer ultimate peace of mind and help drivers feel safer while transporting valuable goods.
Activity reporting: With truck activity reporting features, you can view, print or export reports and analyze the compiled information to make better business decisions. For example, you can compare trucks and their performance and flag any hazardous or money-wasting driving activity — such as excessive idling or speeding — as well as establish more efficient driving routes. Optional reports can also include things like total operational hours for each truck in your fleet, as well as the amount of time spent in a standstill. Have easy access to critical information, including map replay to set up alerts to verify truck locations and follow the exact route taken. Use this information to identify if a driver is accepting side work using your vehicles or taking unauthorized down time.

3. Promote Driver Safety

As a fleet manager, the safety and wellbeing of your drivers — as well as the people they share the road with — is a top priority. Telematics can help keep your team and your shipment safe and sound. Here are a few of the ways telematics encourages driver safety:

Promote safer driving habits: A telematics system allows you to evaluate driver performance by monitoring whether a driver is speeding or engaging in reckless driving. Driver performance reporting can you help you take corrective action and encourage safer driving among your team. 
Minimize contact with road hazards: By using past map tracking and live status updates, you can pre-plan your fleet route to help your drivers avoid road hazards like unsafe weather or road conditions.
Utilize safety and vehicle alerts: Telematics software can let you know if something is wrong with your vehicle and if it needs servicing. By opting for a telematics system that alerts you to your fleet’s needs, it’s easier to stay on top of routine maintenance like oil changes and tire rotation to prevent costly breakdowns or malfunctions. Awareness of these issues saves time and money but lets you address them before they jeopardize the safety of your drivers. In the event of an accident or break down, GPS monitoring systems can also help first responders quickly locate a vehicle.
Develop an ongoing training program: Use driving data compiled by your telematics system to develop a smarter, more targeted training program for your team. You can also offer rewards and incentives for those who practice safe driving habits.

Integrating Telematics with Other Systems

Visibility into the position of vehicles on the road is critical, but it’s far from the only way telematics delivers value for fleets. Thanks to a wide range of integrations that is always growing, fleet managers can leverage telematics to provide them with broader data sets that enable stronger decisioning.

For example, modern telematics systems offer integrations with maintenance planning software, giving teams the ability to plan predictive maintenance activities based on which vehicles are most likely to need them based on usage patterns. Connecting to dashcams and fuel cards also enables cross-referencing with driver behavior and fuel consumption patterns. This gives fleets insights they can use to curb unsafe or inefficient behaviors and reduce unnecessary fuel usage.

Although integrations provide added functionality to telematics systems, fleet managers must be careful about how they plan them. They need to make sure their platforms have API support to enable smooth communication between systems. Caution must also be employed to prevent data silos that result in disparate information and missing data points.

Privacy and Ethical Considerations

As with most forms of connected technology, there are some considerations fleet managers need to keep in mind with regard to privacy when using telematics. Some drivers may be uncomfortable with the idea of being watched remotely whenever they’re behind the wheel, and there is the potential for the data collected by these systems to be abused.

This is why it’s important to implement security controls such as role-based access, encryption, and limited data retention. These help cut down on the risk of data being misused and ensures only those who should have access to the information can make use of it. Fleet managers also must be aware that the role of telematics should be to improve the safety and efficiency of their operations. Using telematics as a surveillance tool to punish drivers is not only unethical but can hurt a carrier’s ability to recruit and retain employees.

The Future of Telematics and Emerging Trends

Even as the technology reaches maturity, there’s still a lot of unrealized upside for telematics. Whether the technology ever reaches its true potential will come down to how well it can integrate with other emerging concepts. For example, AI can bolster the predictive analytics capabilities of telematics platforms, helping streamline the decision-making process based on trends without much need for human intervention or analysis. Assuming autonomous driving lives up to its promises, there’s a lot that telematics can do to support self-driving fleet vehicles.

On the other side of the coin, fleets must be aware that data privacy laws may continue to evolve to address whatever new capabilities are unlocked by these integrations. This means fleet managers need to be proactive in their compliance efforts to ensure they are not left behind.

Request a Quote from Track Your Truck Today

As one of the top telematics providers, Track Your Truck provides business owners and fleet managers with solutions that can help you maximize driver safety and productivity, reduce operational costs, streamline operations and provide your clientele with better customer service. 

To learn more about what Track Your Truck telematics and GPS fleet management can do for your business, request a demo or a quote today.