Is Your Fleet Management Plan Factoring in These Compelling Strategies?

Market Overview

Before laying out practical fleet management strategies, let’s take a look at several market dynamics and forecasts that freight operators, logistics service providers, and fleet managers should know about.

• E-commerce is expected to account for an astronomical 22% (about US$7.5 trillion) of retail sales worldwide by 2023.
• The impressive delivery times offered by large suppliers have raised the bar and placed pressure on retailers to up the ante (learn more in the Location Platforms: Shaping the Future of Fleet Management whitepaper).
• Shipments for dashcams, a key video telematics technology, will be a longtail trend, notably in emerging markets. While growing at a Compound Annual Growth Rate (CAGR) of 12% between 2020 and 2027, shipments will slow down after 2025 due to more integrated solutions being adopted, more advanced solutions entering the market, and the increase in Original Equipment Manufacturer (OEM) factory fits.
• Peak dashcam shipments are expected in 2025, with about 5.5 million shipments forecast for that year. More than 3 million Advanced Driver Assistance Systems (ADASs) will ship that year as well.
• There will be 130 million commercial telematics systems subscriptions worldwide by 2027, which is roughly double the subscriptions in 2020.
• The three fastest-growing regional markets for commercial telematics systems adoption between 2020 and 2027 are Asia-Pacific (16% CAGR), Latin America (12.5% CAGR), and Eastern Europe (12.5% CAGR).
• Developed markets like Western Europe and North America are saturated when it comes to basic track and trace solutions and have CAGRs lower than 10%. These brownfield markets are seeing more demand for advanced video telematics solutions.
• By 2027, ABI Research expects almost half of all commercial vehicles and their operations to use fleet management software.
• Total cargo shipments (trailer tracking, cold chain, and cargo tracking) are forecast to increase by almost 13% from 2020 to 2027. Revenue for cargo monitoring solutions will climb to US$1.2 billion in 2026.
• Surround (dash + external) camera systems, considered an affordable option for fleet vehicle safety, will experience a revenue increase of 37% between 2021 and 2026. By 2026, surround camera system revenue will approach the US$1.8 billion mark.

“Present-day telematics technology is synonymous with Fleet Management Systems (FMSs) and represents the heart of Machine-to-Machine (M2M)- and Internet of Things (IoT)-based business model innovation.” – Adhish Luitel, Senior Analyst at ABI Research

Key Decision Items

The following six sections provide recommended fleet management strategies for both adopters (fleet managers) and telematics solution providers. Whereas the first three sections explain how to manage fleet transport, the latter three sections offer strategic guidance for vendors targeting the fleet telematics space.

Fleet Managers Should Track Everything

The first strategy to develop an effective fleet management plan is to ensure that you are tracking as much information as possible. To optimize fleet utilization or make sensible purchasing decisions in the future, fleet managers need to gather actionable data about how their freight transportation operations, such as vehicles, drivers, and mechanics are performing. Widespread data collection should be a primary goal. Some of the key metrics and other data to focus on will undoubtedly be industry-specific; however, it's a good strategy to incorporate the following performance metrics in any fleet management plan:

• Fuel Usage: Including fueling dates and locations, fuel type, quantity, and cost.
• Estimated Times of Arrival (ETAs): There is a need for better route planning capabilities dedicated to specific fleets with custom needs. Vehicles not being dispatched or not arriving on time is a common issue as well.
• Maintenance: Scheduled maintenance and unscheduled repairs, including data on the work required, maintenance dates, the parts required, the parts’ costs, and labor costs.
• Purchasing and Leasing: The contract and warranty details for each vehicle purchased.
• Utilization: Who is signing out vehicles, as well as the time, date, and mileage of their trips. Make sure to record odometer readings.
• Driver Licensing: Licensing and certification dates.
• Driver Performance: The dates, times, locations, and nature of all accidents. Record which personnel were present and any insurance claim information.

Use Driver Logs

To improve fleet tracking and promote greater accountability, freight managers and logistics service providers should plan to use driver logs. While some managers may think this fleet management strategy requires tracking every transport vehicle each time they enter and leave the facility, this approach is unnecessary. ABI Research recommends that fleet managers simply track critical transactions and provide required logging checklists to drivers when they sign out and give the keys back. This strategy could also entail freight transport drivers completing an inspection checklist before the keys are released or returned. Key issuance—and even vehicle immobilization—could be carried out digitally (Over-the-Air (OTA)) with automated platforms like Ridecell Fleet Automation and Mobility.

Focus on Dispatch Digitalization

A third fleet management strategy for telematics adopters to incorporate in their business plan is to recognize the importance of dispatch digitalization. This comes from the fact that fleet dispatching can be complex and can ultimately introduce inefficiencies.

Fleet dispatching is the process of organizing and delegating drivers and vehicles to carry out tasks. This act is used to manage deliveries, pickups, and in-field service teams for businesses of all sizes. However, fleet dispatching can be tricky to drill down. It necessitates harmony across stakeholders and involves many specific details that need to be established before dispatching the vehicle. This makes fleet dispatching vulnerable to manual errors, not to mention it’s a time-consuming process.

For these reasons, it’s crucial that freight transportation and logistics managers make it a goal to digitalize their dispatching operations. Through auto-generation of workflows based on various alerts, fleets can ensure that communication with stakeholders is not delayed and there is minimal latency. As a result, this fleet management strategy will lead to a boost in customer satisfaction through improved delivery times.

Now, we explore three strategies that solution providers can use in their fleet management product rollout plans.

Telematics Vendors Should Enable Integration with Complementary Technologies

Fleet management software providers like Targa Telematics, Samsara, Motive, and Verizon Connect, among others, share one key thing in common that sets these companies up for long-term success in the road freight sector: their business strategy includes support for integration with other technologies. Indeed,  one of the most crucial parts of a solution provider’s fleet management plan is to excel at technology integration. Fleet telematics solutions need to work seamlessly with various levels of automated processes and other types of technologies, such as telematics platforms, camera systems, different Electric Vehicle (EV) models, Enterprise Resource Planning (ERP) systems, yard management, and of course, Transportation Management Systems (TMSs).

Vendors can deliver effective integration by developing a robust partner network. For example, Samsara has amassed 200 (and growing) partner integrations across the fleet management ecosystem, including FLEETCOR (fuel management), Fleetio (maintenance), Garmin (navigation), Shipwell (visibility), and Trimble (TMS).

Vendors should also plan to create an integration strategy that accounts for complementary technologies. Trucking Original Equipment Manufacturers (OEMs) and solution providers can support fleet telematics solution integration by leveraging open Application Programming Interfaces (APIs) and Software Development Kits (SDKs), edge computing, and Artificial Intelligence (AI)/Machine Learning (ML) analytics. To illustrate, there is a growing trend for integrated fleet telematics platforms to use advanced algorithms to track transit times and routes. Such a solution better optimizes the performance of a fleet—encompassing real-time feedback on road conditions, highly accurate traffic data, route suggestions, and desired arrival times.

Plan for Product Enhancements

A fleet telematics solution that is deemed attractive to freight transportation operators today could easily become obsolete in the future if the vendor doesn’t iterate technological features. Larger vendors with capital to expand Research and Development (R&D) should plan on improving fleet operations and organizational efficiency. As various industry standards and market needs evolve, it should be the vendor’s goal to consistently strategize ways to enhance existing solutions to satisfy prevailing trends.

Customization Is Key

Vendors targeting the freight transportation market should offer customized solutions, as enterprise needs are not uniform. Third-Party Logistics (3PL) service providers and freight operators vary in their needs based on the type of market(s) they focus on and how their supply chains function. Consequently, organizations are gravitating toward fleet telematics platforms tailored to their unique requirements. In this regard, it’s key that telematics vendors recognize this trend and make it their mission to provide widescale customization capabilities within the platform’s dashboard and functionalities.

Key Market Players to Watch

• A. Duie Pyle
• AWS
• GE Appliances
• General Motors Corporation
• Geotab
• Lytx
• Mercedes-Benz
• Motive
• Penske
• Ridecell
• Samsara
• Targa Telematics
• Verizon

Dig Deeper for the Full Picture

To take a closer look at the evolution of fleet management technology in road freight operations and the key strategies you need to develop a sound business plan, download ABI Research’s Road Freight Transportation Technology Trends research report today.

Not ready for the report yet? Check out our following Research Highlights:

• Is Seaport Automation the Answer to Supply Chain Constraints?
• Expanding Supply Chain Tracking with Returnable Transport Assets (RTAs)
• How Digital Transformation Fits into the Food and Grocery Retail Supply Chain

This content is part of the company’s Supply Chain Management & Logistics Research Service.