FM: How can a telematics system help reduce fuel usage in a fleet?
MS: There are a couple of things. One is trip routing and scheduling, as I just mentioned, but there are also the idling and speeding components. There's an opportunity to reduce non-compliant vehicle usage, meaning someone who may be using a company vehicle after hours.
And then there's the opportunity to look at the broader supply chain, and use analytics to drive savings as well. For example, let's say that you have a service fleet and you notice, using telematics, that your drivers are stopping in to replenish their parts three or four times a day, and they're spending a half-hour to forty-five minutes at your supply vendors. So then you need to think about whether there's a different way to do this. If they're actually having to go to those locations that often, that could be costing you an hour and a half to two hours a day in lost productivity, just while they're at the location, not to mention the time to get to it and back to the job. You could look at that and ask, 'Are we sending our drivers out in the morning with the right inventory on their trucks? What's causing them to have to go back to these vendor supply locations multiple times?' And we actually have the ability to put up a 'geofence' around supply vendors like that and track those types of things, and then work with companies and their own internal supply chain teams to do analysis on how to change that model.
FM: What is the potential ROI for a telematics system?
MS: From an ROI perspective, you would recognize that every fleet is different, so I'll give you some broad, broad numbers. What we've seen is reduction in fuel consumption by about 13 percent, and that would be connected to a reduction in CO2 emissions of 13 percent. Those are pretty closely correlated, as you might imagine. Then, also a reduction in overtime. Coincidentally this one is 13 percent, but there's no correlation between overtime and fuel.
Driver productivity is increased by about 26 percent. Reduction in miles driven is about 19 percent, and increase in service response time is about 24 percent.
Depending on how you implement it, what type of modules do you deploy, and how you're going to use it, you would see an ROI of 5 to 10x.
FM: Are fleet managers becoming more sophisticated in their use of these technologies, and their understanding of fuel and emissions issues?
MS: Absolutely. And, in general, fleet managers are becoming more sophisticated. They have to, and with the technology in every area of their jobs increasing, they have to continue to stay current in that technology to be effective in their roles. So, whether that's telematics, or understanding how hybrids work, or using web-based systems to keep track of where their vehicles are at or how much they're spending, or to go in and approve maintenance transactions in real time, technology is a huge part of a fleet manager's job now, and it's actually one of our key differentiators as a business.
FM: Can a telematics system help a fleet manager extend the life cycles of his or her vehicles?
MS: Telematics can be used effectively to reduce vehicle mileage, which in turn impacts annual depreciation, and fuel and maintenance expenses. A fleet may still choose to cycle their vehicles at 60,000 or 75,000 miles, but it may take them an additional 12 to 18 months to reach their cycling point. There are many factors that have to be considered when evaluating optimal replacement parameters, including OEM incentives, resale values, vehicle upfitting.
FM: Can a telematics system help a fleet manager retrain drivers and change their driving habits?
MS: When it's properly implemented, a telematics solution will assist companies in changing driver behavior, and will lead to significant reduction in speeding, idling, at-fault accidents, and unauthorized vehicle usage.
Progressive fleets are using telematics to change the way their drivers approach their work, through routing and scheduling, point-of-interest analysis and other metrics, to increase driver productivity while simultaneously reducing the company's cost to service their customers.
Beyond Fleet campaign is centered on a series of internal and external initiatives designed to promote and advance the fleet management position.
According to a recent PHH Arval survey, driver safety, reducing fuel consumption and maintenance costs top concerns.