What is Telematics and Why is it Important?

Last Updated: February 8, 2022

There is no question that fleet telematics has become one of the most valuable assets for improving the efficiency of logistics operations. The typical fleet may involve dozens, hundreds, or even thousands of vehicles that may be on the road at any given time. Telematics combines telecommunications with informatics to give fleet managers a complete view of safety, transportation, maintenance, and operational data.

To better understand telematics and its impact on the logistics industry, we’ll review the major components of a telematics setup, why they are important, and how this technology can be used to improve fleet efficiency. Telematics has become a requirement for many operators after government regulations created a requirement for electronic logging devices (ELDs). After studying how a telematics system works, a company can choose a setup that best matches the needs of their business.

Definition of Telematics

Fleet managers reviewing telematics data

Telematics is a combination of hardware and software that provides real-time data about fleet status. This is especially helpful for fleet managers who are working to coordinate shipments across geographic areas that may even include state or country borders. Telematics increases the amount of vehicle and fleet data that can be collected and analyzed.

Telematics Hardware

The primary hardware component of a telematics system is a tracking device with onboard GPS. GPS connectivity is used to provide real-time location data regardless of where the unit is physically located anywhere in the world. The telematics device typically connects to the vehicle through an onboard diagnostic (OBD II) or CAN-BUS port. In some cases, it may also be possible to use a remote device that sits in the truck cabin or have the device hard-wired to another part of the truck or vehicle. Hardware sensors can also be installed on trailers or other transportation hardware for additional data collection.

Telematics Software

A central software system is another requirement for a complete telematics setup. Fleet management software collects all the necessary information including location data, orders, and maintenance records. Accessible through a convenient user interface, fleet managers and other staff can view a map in real-time and better plan their delivery schedules and other work.

Telematics Data

A large amount of data can be transmitted from telematics hardware to the fleet management system. Each company must choose which data is most relevant for their own needs but there are several useful measurements to choose from. Some of the most common are:

  • Speed
  • Vehicle usage
  • Maintenance alerts
  • Engine performance
  • Fuel consumption
  • Idle time
  • Vehicle speed
  • Hard braking or cornering alerts
  • Location data
  • Vehicle usage

Each of these data points can provide important insights to drivers and fleet managers. Ultimately, fleet efficiency can be improved by carefully planning fleet routes, performing regular maintenance, and monitoring driver behavior.

Why is Telematics Important?

Trucking fleet on the highway

Telematics fills an important role in fleet management by enabling the collection of additional data that may be useful for logistics planning. These are a couple of the primary benefits that telematics can bring to fleet operations.

  • Reduced Costs. Improved route planning and managing truck speeds can lead to a reduction in fuel consumption costs. It may also be possible to avoid tickets in some areas by creating speed alerts, and drivers can improve their awareness of best practices as well. Telematics also provides vehicle information that can be used to identify early diagnostic warnings, such as a check engine light, so the issue can be investigated right away. By combining additional sensors, fleet managers may also be able to quickly update pickup and dropoff locations based on real-time data.
  • Improved Visibility. With data continuously sent to the central software platform, it is possible to always monitor the fleet without interruption. This high level of visibility can deter theft and make it easier to locate and retrieve vehicles or cargo at any time. The telematics data also makes it possible to create very accurate route information including delivery times. This adds a higher degree of reliability to the entire logistics network that you are managing. Fleet management staff can also use the system to create custom triggers for events with immediate alerts sent to various devices.
  • Greater Control. Real-time data from a telematics system can also be used to better control the performance of a truck vehicle within the fleet. One popular method is geofencing in which the fleet operators can define a particular geographic zone that the vehicle must remain inside. If the truck or van moves outside of that area, then alerts are provided to correct the situation. Benchmarks can also be set for fuel usage, speed, and other metrics to give operators a good reference when driving.

As you can see, telematics plays a crucial role in fleet and logistics management today. Improvements in both hardware and software have made these systems cheaper and easier to install than ever before. The GPS data is reliable with a high degree of location accuracy, making these systems very important for fleet planning.

Write a comment

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.

MPC identification products perform in any environment at the lowest life-cycle cost.

REQUEST A PRODUCT IDENTIFICATION KIT TO LEARN WHY OUR PRODUCTS ARE PREFERRED BY OEMS​