Introduction to Telematics for Fleets

Telematics has rapidly emerged as a key tool in fleet management, blending technologies to help businesses monitor and improve vehicle operations. From tracking vehicles on a map to analyzing engine health and driver behavior, telematics technology has transformed how fleets operate, scale, and thrive in competitive industries. For fleet managers, telematics eliminates blindspots and opens the door to managing larger & more complex fleets.

This article explores telematics, explains how it works, examines the key data it processes, and highlights its significance for modern fleet operations. This blog is the first in a three-part series that explores telematics technology, its benefits, and the future of telematics as a technology & industry. Let's jump in!

What is Telematics?

Telematics, specifically vehicle telematics, combines cellular communication, GPS technology, and vehicle sensors to collect and transmit data about vehicles in real-time. The word itself comes from telecommunications (wireless communication) and informatics (data processing). The term was coined in 1978 and today is mostly used in the context of vehicle telematics. The convergence of GPS technology - made available to civilians in 1993 - with advancements in the both the internet and cellular networks gave way to many innovations in this space. Early providers such as Qualcomm, Orbcomm and Trimble lead the way in commercializing telematics.

At its most basic level, vehicle telematics connects the “brains” of a vehicle—the engine control module (ECM)—to the outside world, enabling fleet managers to remotely access data about their vehicles’ performance. Another way of looking at it is that telematics combines where a vehicle is located with what's going on under the hood, sharing the information over-the-air.

Examples of telematics applications include:

• GPS Tracking: Pinpoint the real-time location of vehicles on a map, often referred to as 'track and trace.'

• Remote Diagnostics: Monitor fault codes and configure alerts about engine health, enabling a more proactive mindset around maintenance vs. reacting to issues as they come up.

• Usage Based Insurance: Insurance driven by telematics, whether an aftermarket device or a mobile solution via an app, is becoming more popular, wherein driving behavior (frequency of harsh events, speeding, etc), miles driven, time of day driving, etc. are aggregated into a risk score by insurers, often passing on savings for fleets (or individuals) that adopt it.

• Streamlining Driver Payroll: By leveraging the GPS location from a telematics device, along with metrics such as ELD (Electronic Logging Device) logs, drivers' pay can be fairly managed based on time spent on the job & in the cab.

These insights provide a more clear lens for fleet managers on what's going on while vehicles are on the road, enabling them to promote efficiency, safety, and overall performance through remote data collection.

Pictured: Interconnected societies, from space. [Unsplash]

How Does Telematics Technology Work?

Telematics systems consist of integrated hardware and software that collect, transmit, and process vehicle data. These come in the form of aftermarket and factory-installed telematics, with the latter being a newer feature of vehicles across industries and manufacturers. Both utilize similar sensor systems to share data back to fleet managers.

Here’s the step-by-step process:

1. Sensors Capture Data: Sensors installed in vehicles gather data, including GPS location, engine diagnostics, and driver behavior metrics. For example, G-force measurements are captured through on-board accelerometers, which can inform when a harsh turn or acceleration event occurs.

2. Telematics Device Processes the Data: Connected through the OBD-II port (cars) or J1939 port (trucks), the device acts as the “hub” for gathering & processing vehicle data.

3. Cellular Transmission: A SIM card in the device sends data over cellular networks to a cloud-based system. Some modern telematics devices contain multiple SIM cards to support network connectivity across rural and urban areas.

4. Cloud-Based Analytics: The data is processed and presented on a fleet management platform and or mobile app, enabling managers to analyze and act on insights. Some systems, such as those offering an ELD for drivers, have an interface dedicated to drivers' daily operations.

Process example: If a vehicle’s engine detects a 'critical' fault code, the telematics system can immediately notify the fleet manager based on notification triggers. That fleet manager can then schedule repairs before the vehicle returns, catching the issue before it causes downtime. Similarly, a driver’s harsh braking activity could trigger an alert, allowing managers to use that driving event as part of a broader coaching program to incentivize better driving behaviors.

What Data Can a Telematics System Analyze?

Telematics technology is capable of processing vast amounts of data to provide actionable insights for fleet operations. A few key data areas include:

1. Vehicle Location

   • Real-time location data to improve route efficiency and overall visibility.

   • Result: Geofencing capabilities for automated alerts, such as changing the billing status of a rental vehicle.

2. Engine Diagnostics and Vehicle Health

   • Transmission of fault codes, fuel levels, oil pressure, and engine temperature, all over-the-air.

   • Result: Maintenance alerts based on odometer, engine hours, time or a combination based on the asset.

3. Driver Behavior Monitoring

   • Speeding, harsh braking, rapid acceleration, and seat belt use.

   • Result: Data-driven coaching to encourage safe driving habits & gamify driver performance.

4. Fuel Efficiency Metrics

   • Fuel use, idle time, and route optimization data.

   • Result: Identifying wasteful fuel usage - such as excessive idling - to lower operational costs & extend vehicle life.

5. Maintenance Data

   • Insights into tire pressure, mileage intervals, and wear-and-tear indicators.

   • Result: Extending the longevity of a fleet's tire program through data-driven re-inflation & replacement notifications for drivers & fleet managers.

By consolidating this information in one application, fleet managers can make decisions that directly impact performance, safety, and costs. Further, many fleet managers transition from a spreadsheet & paper-driven operation to a digitized & organized system when adopting tools like telematics.

Example: If a fleet manager notices consistent fuel spikes tied to a particular route, they can reroute vehicles for greater efficiency—saving thousands of dollars annually.

Pictured: Geotab’s modular dashboard, a leading Vehicle Telematics provider.

The Evolution of Telematics

The history of telematics began with basic GPS tracking systems in the 1980s and 1990s. By the early 2000s, advancements in wireless communication allowed real-time data transmission, transforming telematics into a sophisticated fleet management tool. The convergence of these systems with the proliferation of the internet & web-driven software applications provided the scaffolding for a fleet manager's dream: a central platform to monitor vehicles with data streaming back to a management dashboard. Iterations of this model are still the norm today.

A major turning point came with the ELD mandate in 2017, which required commercial vehicles to adopt electronic logging devices. This legislation drove the widespread adoption of telematics, especially in the trucking industry. For context, there are over 900 registered ELD devices (some tied to telematics providers, others leveraging a mobile telematics approach) through the FMCSA today, representing the impact of this ruling.

Today, telematics systems integrate cutting-edge technology, including:

• AI and Machine Learning: Transforming millions of datapoints into key insights, such as predictive maintenance and route optimization, enabling smaller teams to handle larger fleets.

• Video Telematics: Incorporating video data into the system, offering rich insights such as tailgating alerts and alerting drivers if they're not wearing their seatbelt.

• Mobile-Based Solutions: Easy-to-deploy apps that reduce hardware installation costs; a mobile application that leverages the cellular & GPS capabilities of modern smartphones.

Pictured: A consumer dash camera, representative of the emergence of vehicle telematics. [Unsplash]

Why is Telematics Critical for Fleet Management?

For businesses managing multiple vehicles, understanding the real-time status and health of assets is essential. Telematics provides the tools to:

1. Improve Operational Visibility

   • Know where vehicles are and whether they’re on schedule.

   • Result: Reduce delays and inefficiencies through live route monitoring & sharing vehicle location with your end-customer.

2. Enhance Driver Safety

   • Monitor risky behaviors like speeding, harsh braking, or not wearing seat belts.

   • Result: Reduce accidents and improve fleet safety scores through a data-driven safety program, incentivizing great drivers & encouraging those with room to improve via gamification.

3. Lower Fuel and Maintenance Costs

   • Optimize routes to reduce mileage and idle time.

   • Result: Proactively schedule maintenance to prevent costly breakdowns by relying on streams asset-specific, vehicle-level data in the place of fixed schedules that apply to the whole fleet.

4. Ensure Compliance

   • For trucking fleets, electronic logging devices (ELDs) ensure compliance with Hours of Service (HOS) regulations, protecting drivers and fleets from fines. Further regulations such as the International Fuel Tax Agreement, or IFTA, data can be gathered in-part through telematics systems.

   • Result: Driver compliance made-easier as a tertiary benefit to installing telematics on your fleet beyond improving daily operations.

Industries That Rely on Fleet Telematics

Telematics technology isn’t exclusive to one industry—it serves a range of sectors that depend on vehicle fleets for their operations. Key industries include:

1. Transportation & Logistics

   • Track delivery vehicles, optimize routes, and ensure timely deliveries.

2. Construction & Heavy Equipment

   • Monitor machinery health, fuel usage, and location across worksites.

3. Utilities & Field Services

   • Manage service vehicles efficiently for on-site repairs or inspections.

4. Rental & Leasing Companies

   • Track mileage, driver behavior, and vehicle utilization for asset management.

5. Public Transportation

   • Monitor routes, fuel usage, and maintenance schedules for buses and shuttles.

In each industry, vehicle telematics systems enable businesses to gain better control, reduce operating expenses, and improve customer satisfaction.

Conclusion: Telematics & the Future of Fleet Management

Telematics has become an indispensable tool for fleet managers, providing increased visibility into vehicle operations, driver performance, and maintenance needs. By processing real-time data, telematics systems empower businesses to improve efficiency, reduce costs, and ensure compliance.

As industries continue to embrace connected vehicles and predictive analytics, telematics will play a central role in shaping the future of fleet management. We'll explore more of the benefits of telematics in fleet management on our upcoming blog; click here to subscribe for updates.

As a team who has worked with telematics data for many years, Flete is positioned to offer a robust experience for fleet managers across industries. Flete is natively integrated with more than 45 telematics providers on the market, enabling most fleets to enjoy a turnkey experience with our solution.

Ready to see how telematics can transform your fleet operations? Book a demo with Flete today and discover how actionable insights can save you time, reduce downtime, and improve fleet performance.