What is Telematics? (UPDATED JULY 2020)

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Overview

The word “telematics” is a portmanteau of the words telecommunications and informatics. Telematics is the collection and use of information about remote or mobile assets. It is an example of the “Internet of Things”.

The term “telematics” is often used in the context of vehicle telematics. Vehicle telematics relies on a black box, that aggregates the required information. The information collected usually includes location history, speed, engine status and diagnostic information. Other typical data collected includes engine idling time, harsh braking or harsh acceleration. All this data comes directly from the vehicle, or from an accelerometer within the black box. In some cases, custom sensors are also added to collect specific information. For example, a sensor can be to the door of a refrigerated truck to track the time the door is open. The black box then sends this aggregated information via the the phone network to a data centre.

A fleet management system uses this raw data to help optimise fleet performance.

Telematics is not only limited to vehicles. It is also used to manage mobile assets such as pumps, generators and the like. Telematics is often used to track the location of these types of high value assets. It helps locate them as required.

Recent rapid advancements in IT and telecommunications have made telematics much more affordable. It means the cost to a fleet owner of not having a telematics system far outweighs the investment.

How do Telematics Systems Work?

The vehicle has a telematics black box installed in it (“In Vehicle Unit”). This device almost always includes GPS tracker hardware. It may also include an accelerometer to record harsh braking or acceleration. The IVU is usually connected to the vehicle’s On-board Diagnostics via the OBD-II port. Sometimes it is also connected to other non-standard sensors or monitoring systems.

The mobile phone network transmits the information to the data centre. The owner may also opt for a backup Iridium connection if they expect use in remote locations.
A fleet management system receives the data in an online data centre.
The data is then accessed by the user on the public internet.

Business Benefits of Telematics

Telematics paired with fleet management systems can deliver the following benefits –

Fuel Tax Credits Optimisation

When businesses use fuel in certain ways, they are eligible to claim part or all the tax included in the fuel price. They can claim the refund as tax credits, hence the term Fuel Tax Credits. Telematics systems track vehicle and equipment use and thus fuel use. They can help maximise fuel tax credit claims, as well as minimise effort required to make the claims.

Organisations can claim fuel tax credits for up to four years retrospectively. They can base these claims on current use patterns, ie, they don’t need to have recorded the fuel use at the time of use. Retrospective fuel tax credit claim can be huge if they were underclaimed in the past.

Reduced Maintenance Costs

The In-Vehicle Unit can send vehicle status information to the fleet management system . This information can trigger either corrective or scheduled maintenance work orders. This type of system reduces reliance on the driver reporting faults. It makes maintenance more effective, and results in less equipment downtime.

Increased Return on Assets

Fleet management systems help fleet managers schedule preventive maintenance as effectively as possible. They help reduce the risk of unplanned downtime, and optimise return on assets.

Reduction in Unauthorised Use of Vehicles

Telematics systems track the use of fleet vehicles at all times. Also, geofencing can create alerts when vehicles enter predefined areas. Hence fleet management systems make it easy to control unauthorised vehicle use.

Improved Productivity

Many fleet management systems include route optimisation functionality. This helps ensure that drivers spend the least possible time driving. It makes them more productive.

Fleet management systems also include efficient communication systems, which further contribute to productivity.

Reduction in Fuel Costs

Telematics systems can help reduce fuel use in the following ways –

Tracking the idling state of engines
More effective route planning
Reduction in unauthorised vehicle use

Better Communication

Telematics systems are communication systems, and make keeping in touch with drivers straightforward. Drivers can spend less time on updating management about location, activity and so on. Management have direct access to current information, thus improving decision making.

Better Safety, Risk Management, and Legal Compliance

Telematics systems can track driver behaviour such as harsh braking, cornering, and acceleration. Drivers can receive alerts in real-time, and change their driving style as necessary. This data can also foster internal competition between drivers

The accelerometer in the In Vehicle Unit can automate crash detection. This information is then passed to the fleet management system. The fleet management system can send automated alerts to enable a quick response. This improves driver safety, especially in remote locations.

Fleet Management systems help formalise safety procedures. An example is the Pre Start Checklist. Drivers use their phones or tablet devices to record the results of their daily check. This ensures that the vehicle operators maintain their vehicles to required safety standards. It reduces both risk and liability.

Improved Customer Service

Dispatchers can get real time information about their workforce. Examples include vehicle location, skillset of drivers, and traffic conditions.

They can use this information to provide the best possible service. Also, the fleet management system can send arrival time advisories direct to customers. These contribute to improved customer satisfaction.