The Future of Fleet Tracking Systems and Fleet Tracking Market

Chapter 16

The future of fleet telematics can be summarized in one word: Growth.

It is an interesting time to be in fleet telematics, because there are so many things going for it.

• First, more and more businesses are finding that fleet telematics and fleet management in general brings in significant benefits to their businesses. It is something that they cannot live without if they want to stay competitive.
• Second, the components of a fleet telematics systems is getting more and more affordable as it gains more and more capabilities. We now have sensors and transmitters that are extra powerful and that cover more functionalities at a fraction of the prices of sensors that were introduced a few years ago.

But what are propelling the growth of the fleet telematics industry are the government-mandated regulations for vehicles to have them onboard. For instance, Contran 245 wants all new vehicles in Brazil to be equipped with tracking devices to help fight rampant car theft, while Russia has built infrastructure called the ERA-GLONASS, which is aimed at making the roads safer. Nations in Europe are working on eCall, which uses telematics to send immediate help to those who are involved in a collision. What all of these mandates mean is that telematics would soon be required in all new vehicles, and ultimately, it will mean that all fleets would have it in the near future. It would also mean that we could expect to have a boost in the technologies behind tracking solutions and fleet management systems.

Couple that with the falling prices of hardware, and we should see more and more businesses putting up their own fleet management systems for their use.

No longer just for big corporate fleets

Reuters, citing a study from ABI Research, reports that in 2016, there would be at least 30 million subscriptions for both fleet management and trailer tracking systems around the world. That is from only 13.3 million recorded in 2012.

This growth is expected to be fueled by fleet telematics and fleet management providers that are offering more affordable systems that many small fleets are taking advantage of. Also, non-trucking enterprises such as service, private and public transportation and delivery companies are also getting into fleet tracking and fleet management precisely because of the cheaper price tags on the hardware. For instance WEBFLEET’s best hardware costs less than $500 with a monthly subscription as low as $12. Then Qualcomm offers its MCP50 fleet management systems for less than $800 and a monthly subscription of around $20.

Even if the lower cost fleet management and fleet tracking systems are not that fully featured, it would serve its purpose for smaller fleets composed of around 10 vehicles, and we are seeing small fleets fueling the growth for fleet telematics.

Latin America, Russia, China, Japan and Southeast Asia Markets

There are several key markets in fleet telematics. These markets are duplicating the growth that we have seen in North America and Europe.

For instance, you have the Latin American market where Brazil’s Contran 245 is helping fuel the growth of in-car telematics. And if the law is fully implemented, new vehicles with onboard telematics would give rise to value added services related to the new technology. You should also expect more growth coming from Chile and Mexico, both of which have their own projects that involves telematics on cars. When it comes to Latin America, the focus of fleet telematics providers is on driver behavior monitoring, efficiency and driver safety, with Brazil focusing more on risk management.

Then you have the Russian market. Russia has ERA-GLONASS, which is a road accident emergency response systems that would mandate all new vehicles be fitted with a tracking device. The systems would allow new vehicles to communicate with rescue services, insurance companies, location-based content providers, and yes, fleet management software.

Then you have the Asian market. As expected, China is leading the way for commercial vehicle telematics to grow in the region. Already, we are seeing companies setting up shop in the country, including Navman Wireless, which successfully signed up one of the country’s biggest logistic fleets with more than 5,000 vehicles. It also includes Daimler, which has launched FleetBoard in every Mercedes Benz tractor truck sold in the country. The Chinese government has a hand in this growth, requiring most taxi and bus fleets to have some sort of tracking systems in place. On top of this, growth is expected in other areas as well, such as motorcycle delivery.

The rest of Asia is also on the growth curve. You might think that Southeast Asia, with its poor road conditions, low income and poor telecommunications infrastructure, is not a good market for fleet telematics. However, looking at each country, you would find that there are those with rising economies. Asian markets such as those in Japan, Thailand and Malaysia are leading the way. Malaysia’s Proton now has 4G Internet on their cars, Thailand and Japan has Toyota’s Smart G-BOOK, which is a telematics application that can be accessed on smartphones and gives you the best route to your destination by checking your location and traffic information. It also allows you to request roadside assistance in an emergency situation.

The established markets (United States and Europe)

Then you have the continued growth in the established markets of the United States and Europe. Europe’s eCall is requiring all new passenger vehicles sold in the entire European Union to have in band modems that would be able to dial the nearest emergency systems when the car or light commercial vehicle gets into a collision. Yet the region has been experiencing a recession that is derailing the growth of fleet telematics. However, several companies in the region can expand the applications and services they offer to get more revenues while they wait for it to tide over.

In the US, there are two laws that are seen to benefit fleet tracking and fleet management systems. There is the Federal Motor Carrier Safety Administration’s Compliance, Safety, Accountability program. This law seeks to improve the safety of trucks and buses and uses telematics to gauge vehicle maintenance, driver fitness, unsafe driving behaviors and other factors.

Then you have the Highway-Funding Bill that includes a provision to require everyone to have an onboard recorder to track hours of service rendered by a driver. The law will directly affect more than 3 million trucks and drivers.