Summer 2006

Telematics offer vehicle operators many benefits, but to judge from a conference this spring, they still largely represent a technology still in waiting. Robin Meczes finds there are almost as many factors holding the sector back as driving it forward

If there's one group of people who should be embracing the benefits of telematics, it's commercial vehicle operators. Squeezed on all sides by lousy rates, cut-throat competition, the high expenses of running top-weight vehicles and the problems of managing large numbers of drivers, they should, in theory at least, have treated the emergence of vehicle telematics like manna from heaven.

Some have, of course - but despite what you might think, they're very much in the minority. Franck Leveque, programme director at industry analyst Frost & Sullivan, believes there are several reasons. They include a lack of awareness among operators of the potential benefits, the negative experiences of some early adopters, driver resistance issues, and the lack of a standard platform across systems.

Despite all this, however, Leveque believes commercial vehicle operators will increasingly be forced to turn to telematics to satisfy their customers' needs, to meet new legislative requirements and to wring efficiencies out of their operations.

 

A key driver will be pressure from clients like the major retailers to provide new levels of reporting from vehicle operators, says Leveque - information that can only be satisfied using new technology. "Clients are looking for ever-increasing service levels . . . and these kinds of requirements can mainly be provided with telematics," he says, citing as two high-profile examples Marks & Spencer's requirement for transparent monitoring of goods from manufacturing to delivery, and Ikea's requirement for complete "mission reports".

The need for vehicle operators to cut costs - fuel, communications and insurance in particular - is also adding to the pressure, he says, especially in light of increasing competition from eastern European firms and against the background of current fuel price trends.

Regulatory changes designed to increase safety and security or reduce congestion are also likely to add to the need for telematics, Leveque believes, one example being the European Commission's plan for "e-call", a GPS-based emergency call-out system that may soon have to be fitted to all new vehicles by law.

"There is now a real pressure, both internally and externally, on fleet operators to adopt telematics," says Leveque.

The suggestion that legislative pressures might boost telematics take-up isn't, however, necessarily borne out by what's actually happening today - the introduction this year of digital tachographs, for example. Despite the obvious potential for using telematics technology to download data remotely from digital tachographs, there's little hope of operators being able to do so practically, says Sally Thornley, manager of compliance information services at the Freight Transport Association.

It is possible to get data remotely "out of the back door" of digital tachographs, but that data won't carry the electronic signature required to prove compliance with drivers' hours or WTD rules, says Thornley - meaning it is useful only for fleet management purposes. As the current digital tachograph specification is unlikely to be changed, some kind of add-on would be useful to take data out of the "front" with that electronic signature intact and then transmit it somewhere to suit the operator, says Thornley; but so far, that add-on doesn't exist.

The issue of negative experiences among early adopters is also a major one, suggests David Midgley, general manager, telematics at truckmaker MAN ERF. A recent Freight Transport Association survey of user satisfaction with truck telematics systems, says Midgley, suggested that 40 per cent of operators have been disappointed with telematics systems for various reasons, including high costs, poor after-sales support, questionable data accuracy, poor data access times and technology simply not working. "When 40 per cent of respondents say the kit didn't do what it was supposed to, there's a problem . . ." Midgley says.

Oversold systems, sales-related commissions and too much focus on "box-shifting" are the main factors responsible, he adds - but the cost of installing and using telematics systems is probably the biggest single barrier. "A lot of service providers are currently quoting £1 a day for vehicle tracking, but that's still £365 a year, and on a five-year deal, £1,800. If you've got 200 trucks, that's £360,000 - and that's a lot of money."

There are also issues surrounding who to go to for a decent system and service, of course. Phillip Hoare, head of indirect sales at telematics provider Aeromark UK, whose system is sold by Orange as FleetLink, says users should be looking for a trusted company that has a roadmap for product development, a proven and robust solution and a strong customer base. But enter all those phrases, along with "telematics", into a Google search and you'll come up with just four hits, says Hoare.

"I think that's about right. I think there are about four serious choices for telematics solutions in this country at the moment - and I'm not entirely sure who the other three are!"

In some areas of the telematics industry - stolen vehicle recovery systems, for instance - more could perhaps be done by the authorities and other parties like insurers to encourage user take-up. But again, this doesn't seem to be happening as much as it might.

Andrew Miller, director of research at Thatcham - which recently devised the Cat 5 standard for telematics-based recovery systems at the request of the insurance industry and the Association of Chief Police Officers - says that although there are now around 20 Cat 5 aftermarket systems available on the market, reluctance by police to use the ability of such systems to disable vehicles remotely, combined with a lack of engagement by the insurance industry itself, has meant consumer take-up has remained relatively restricted, except in the high-value, luxury vehicle sector.

That police reluctance has been due largely to concerns over liability issues, but negotiations on this are coming to fruition and such disabling is now "imminent", he says. With vehicle theft in the UK currently costing around £500 million a year, meanwhile, Miller says insurers will soon have to face the question of whether they want to encourage users actively to take up theft recovery systems or not. "Do they want to engage further with consumers and the telematics community about actually driving telematics further into the vehicle market? It's a big question . . . and an area insurers need to think more about," he says.

In the end, Miller's comments could equally be applied to much of the telematics industry. Unless it too finds ways to engage with consumers and drive its products further into the market, vehicle operators may just decide to continue waiting and watching - and sitting on their hands as a result - far into the future.

This article is based on presentations made at the Commercial Vehicle Telematics Conference held during the CV Show at the NEC this spring.