Document Sample
					           FLEET TELEMATICS
                                                                                                 information to the vehicle manufacturer,
       Commercial Telematics Market Growth: $2 Billion by 2009                                   fleet manager, or service organization.
       MILLION                                                                                       GPS, AVL, MRM, WiFi, and RFID
         $2,000                                                                                  are just a few acronyms representing
                                                                                                 telematics systems and technologies.
         $1,600                                                                                  The growing list is only one indication
                                                                                                 of the expanding use and variety of
         $1,200                                                                                  applications telematics offer.

                                                                                                 Location Systems Top Use
                                                                                                     The largest segment of the U.S.
                                                                                                 mobile resource management (MRM)
              $0                                                                                 market is installed vehicle location
                           2005            2006         2007          2008          2009         systems for local fleets. In 2006, this
                                                                                                 market segment experienced a 30-
              Trailer Monitoring Units                    GPS Cell Phones/Portable Devices
                                                                                                 percent growth and is expected to
              Installed Units - Long Haul Fleet           Installed Units - Local Fleet
                                                                                                 continue growing at a healthy rate.
              SOURCE: C.J. Driscoll & Associates                                                     Most MRM suppliers for local fleets
     Table 1. The commercial telematics market is set to expand to 5.8 million units by 2009.
                                                                                                 are small, privately held companies,
                                                                                                 resulting in a fragmented market. Some
                                                                                                 consolidation of local MRM suppliers
     By Lauren Colin & Clem Driscoll                                                             is expected.

            he results are in — telematics is no longer considered a “nice thing to have.” For       The widespread availability of
            many fleet operators and enterprises, it’s a “must-have.” Currently, more than       broadband cellular data networks has
            2.5 million units are in service, managing fleet vehicles, mobile workers, trail-    been a major factor in the growth of the
     ers, heavy equipment, and other assets. However, with more than 20 million fleet ve-        local fleet telematics / MRM market.
     hicles, nearly 5 million trailers, and more than 1 million pieces of heavy construction     These networks provide reliable
     equipment in service in the U.S., most of telematics’ potential remains untapped.           wireless data communications with
         According to a C.J. Driscoll & Associates study, the commercial telematics              broad coverage at a reasonable cost.
     market, also known as mobile resource management (MRM), is expected to expand               The Cingular General Packet Radio
     to 5.8 million units by 2009, with revenues growing to more than $2 billion                 Service (GPRS) network is widely used
     (Table 1). Fleet benefits from telematics include increased productivity, dispatching       for MRM services due to extensive
     efficiency, improved customer service, and vehicle, driver, and cargo safety.               network coverage and the availability
                                                                                                 of low-cost GPRS modems.
     What is Telematics?                                                                             The long-haul MRM market is large
        The term telematics combines “telecommunications” and “informatics.”                     (annual revenues of more than $350
     Literally defined, telematics is the integration of wireless communications,                million). However, this mature market is
     vehicle monitoring systems, and location devices. Telematics has become a tool              growing more slowly than the local fleet
     to monitor idling time, help reduce bad driving behaviors, and eliminate                    market. New system introductions by
     unauthorized vehicle use. Vehicle telematics systems also are increasingly used to          QUALCOMM, the market leader, and
     provide remote diagnostics. A vehicle’s built-in system identifies a mechanical or          several OEM truck manufacturers should
     electronic problem, and the telematics package can automatically transmit this              stimulate added growth in this segment.

16          AUTOMOTIVE FLEET / February 2007
The use of telematics technologies in fleets is expanding rapidly. Currently,
more than 2.5 million units are in service with the market expected to expand
to 5.8 million units by 2009.

                                               system operational in the early1990s.       maintenance through diagnostic alert
                                               Today, GPS is everywhere, and               handling,” said Coleman. “Our core
                                               adopting it in fleets is relatively easy    service offerings are now enhanced by
                                               and inexpensive. In-vehicle                 data captured by these devices.”
                                               GPS/cellular devises are available for          An early leader in telematics-based
                                               about $500, and monthly service fees        fleet programs, PHH Arval completed
                                               average $35-$40 per month.                  successful beta-tests of PHH Onboard
                                                  As a low-cost alternative to installed   in 2004. PHH Onboard integrates
                                               MRM systems, some fleet operators opt       vehicle location and engine diagnostic
                                               for GPS-equipped cell phones. Sprint        data into core fleet management
                                               Nextel has spearheaded the cell phone-      services offered by PHH Arval. The
                                               based MRM market. Sprint Nextel             data, collected by an onboard computer,
                                               launched the first cell phone-based         is transmitted via a cellular antenna to a
                                               MRM applications in 2003. The               network operating center, then made
                                               company established partnerships with       available to fleet, risk, and productivity
                                               selected MRM providers under which          managers through a suite of Internet-
                                               they sell and bill for the services,        based applications and automated
Fleets can expect to use navigation ser-       making it easy for Nextel customers to      exception reporting.
vices such as this Telenav system on a
BlackBerry with their drivers in the future.   add GPS tracking and other                      When the onboard computer is also
                                               functionality for managing mobile           connected to the OBD II engine
   The private trucking fleet market has       workers. This approach has enabled          diagnostic portal, vehicle diagnostic
been slower to adopt MRM than the              Sprint Nextel and its MRM partners to       data, such as dynamic sensor data and
truckload market, but this trend is            hold about 80 percent of the market for     trouble codes, is collected and can be
changing as private trucking fleets            cell phone-based MRM applications.          tracked and analyzed. Suppliers such as
(local and long-haul) recognize the            Verizon Wireless and Sprint (CDMA)          Symbol and Intermec now offer
benefits of MRM. Several MRM                   also offer handset-based MRM                “ruggedized” handheld computers that
suppliers to the private trucking market,      services, with Cingular expected to         incorporate GPS and cellular
such as XATA and PeopleNet, are                launch its program in later this year.      technology. These devices provide
experiencing strong growth.                       “The use of telematics in fleet          portable MRM functionality in a form
   Overall, while the number of U.S.           applications today is primarily focused     factor suitable for the typically rough-
fleet vehicles equipped with telematics /      on basic programs that increase
MRM systems has grown to more than             productivity and safety, lower risk
1.7 million, the total market penetration      factors, and improve performance,”                   At a Glance
remains at only 10 percent, leaving ample      says David Coleman, VP of telematics

opportunities for continued market                                                                      ew fleet-beneficial fea-
                                               strategy for PHH Arval, a fleet leasing
growth and expansion.                                                                                   tures being added by
                                               and management company. As
                                                                                                        MRM suppliers include:
                                               corporate America increasingly accepts
GPS is Everywhere                                                                                   • Navigation.
                                               telematics as a tool, “we can offer
   The first experimental global                                                                    • Traffic information.
                                               sophisticated applications for the data
positioning satellite (GPS) was                                                                     • Local weather conditions.
                                               provided by the vehicle. For example,
launched in February 1978. The U.S.                                                                 • Remote diagnostics.
                                               collision prevention through predictive
Defense Department declared the GPS            driver activity modeling and proactive

                                                                                       AUTOMOTIVE FLEET / February 2007             17
and-tough fleet environment.                                                            known as a vehicle asset commander
   Suppliers of transportation/logistics                                                (VAC). A vehicle’s ignition would only
systems are increasingly integrating                                                    start if the VAC detected the driver was
mobile workforce location information                                                   wearing an active RFID-enabled badge.
from GPS-equipped handsets into
applications for improved time and task                                                 Wireless Networks on the Rise
management, dispatching efficiency,          OnStar’s Turn-by-Turn                          Approximately 70 percent of U.S.
route optimization, and customer             Navigation Guides                          subscribers to MRM applications use
service. Declining prices are also           Drivers to Destination                     terrestrial networks, including
expected to lead to a greater adoption                                                  broadband cellular networks, such as
of this technology.                          O     nStar’s Turn-by-Turn
                                                   Navigation service will be
                                             standard for the first year on a
                                                                                        GPRS and 1xRTT. Nearly 30 percent of
                                                                                        MRM subscribers, including
RFID Saves Fleets Time                       number of GM retail vehicles sold          QUALCOMM’s OmniTRACS
    Radio Frequency Identification           in 2007, including all Buick and           customers, access MRM applications
(RFID) technology relies on storing          nearly all Cadillac models. Turn-by-       over satellite networks. Some MRM
and remotely retrieving data using           Turn Navigation will also be               systems include wireless fidelity (WiFi)
devices called RFID tags, or                 available on other GM vehicles with        communications capability that
transponders. An RFID tag is an object       a $100 optional OnStar package             transmits vehicle data with no wireless
that can be attached to, or incorporated     upgrade in the initial year of service.    network charges.
into, a vehicle for identification           Afterwards, customers can renew                WiFi networks typically provide
purposes using radio waves.                  the package for an annual fee, which       anyone with a wireless laptop
    RFID tags have been installed on         includes OnStar’s safety, security         computer, cell phone, or other portable
taxicabs and other commercial vehicles       and communication services.                Web-enabled device free public access
servicing several major airports, such as       Drivers of OnStar-equipped              to the Internet in a specific area, known
Los Angeles and Salt Lake City               vehicles with the Directions &             as a hot spot, which can range from one
International airports. RFID systems are     Connections can reach a live advisor       building to an entire city.
used to identify taxis picking up fares at   and obtain audio step-by-step                  Public sector fleets already use WiFi
the airport, automatically charging taxi     destination directions based on            technology for a variety of tasks. In
operators, thus avoiding delays in           location, pinpointed by satellite. Turn-   Corpus Christi, Texas, utility
manually paying airport-use fees.            by-Turn will be expanded further           employees collect gas and water meter
    Around the country, Wal-Mart has         within the GM portfolio in 2008.           readings simply by driving down the
used RFID to track trucks, forklifts, and       Turn-by-Turn Navigation system          street in a WiFi-equipped city vehicle.
other mobile devices in Dallas, and the      advantages include:                        The Milipitas, Calif., police department
company plans to expand its RFID                • Hands on the Wheel, Eyes on           can monitor real-time video from
asset-tracking program to other              the Road. Drivers are not distracted       cameras mounted in high-traffic areas.
locations. United Parcel Service (UPS)       by data entry or touch screen.             In-vehicle computers provide police
is testing a mix of active and passive          • Ease of Use. Simply press the         officers in the field incident video feeds
RFID to monitor vehicle movement and         OnStar blue button and request             and detailed crime databases. The U.S.
location. Walgreens has deployed I.D.        directions.                                Department of Transportation considers
Systems’ Wireless Asset Net industrial          • Live Advisor Access. OnStar           WiFi a potential means to create a
fleet management system on a fleet of        advisors are available 24 hours a          national road safety network.
material-handling vehicles at Illinois       day, seven days a week, and 365
and South Carolina distribution centers.     days a year.                               The Market Expands
    The U.S. Transportation Security            • Route Corrections. The system            Growth of the mobile resource
Administration (TSA) also used the I.D.      detects when the driver leaves a           management market is fueled by many
System program in a successful RFID          planned route and automatically offers     factors, including:
trial at Newark Liberty International        updated directions.                               • The commercial market has
Airport. The test tracked baggage-              • Pinpoint Positioning. OnStar’s               begun to recognize the benefits
loaders, fueling trucks, and other           enhanced GPS system is fully                      of GPS.
maintenance vehicles as they traveled        integrated with the vehicle’s ABS                 • Fleet operators are becoming
airport roadways and approached              module to deliver a more precise                  more aware of MRM benefits in
airplanes. Each vehicle was equipped         positioning solution.                             improved productivity, operating
with an RFID (interrogator) reader                                                             efficiency, and customer service.

18       AUTOMOTIVE FLEET / February 2007
                                                                                               Table 2.
                                                                                               Fleet MRM Suppliers
       Ford Teams Up with Microsoft to Launch ‘Sync’                                           Some of the many company players
                                                                                               in fleet telematics services include:
                                                   Mercury products in Fall 2007, Sync
     F    ord Sync, the newest technology
          produced by a Ford and
     Microsoft collaboration, will offer
                                                   requires a simple pairing of a mobile
                                                   phone to the vehicle to allow voice
                                                                                               Service & Delivery Fleet Installed
                                                                                               MRM Systems
     fleets a software platform to improve         access to the phone’s contact list.         @Road*
     productivity and operational                  Sync can pair up to 12                      www.atroad.com
     efficiency,                                                       communications          Cadec
     according to the                                                  devices.                www.cadec.com
                                                                           With the            Davis Instruments
         The fully                                                     upgradeable Sync
                                                                                               Discrete Wireless
     integrated, voice-                                                platform, Ford can
     activated in-vehicle                                              offer new features      Geologic Solutions
     communications and                                                and technology.         www.geologic.com
     entertainment                                                     New applications        Geotab
     system is powered         Ford Sync, powered by Microsoft         will also be            www.geotab.com
                               Auto software, offers the potential
     by Microsoft Auto         to download key fleet applications      downloadable            GPS Insight, LLC
     platform. Users can       to an onboard vehicle terminal.         from a personal         www.gpsinsight.com
     access their mobile phones or digital                             computer via the        Netistix
     media players via voice commands or           Internet and installed on the vehicle       www.netistix.com
     steering-wheel controls. Connectivity is      through the USB port, according to          PeopleNet Communications
                                                   Ford. The automaker is working with         www.peoplenetonline.com
     provided by Bluetooth technology or a
     USB 2.0 port.                                 its Fleet Advisory Board to identify
         Fleet managers who previewed Sync key applications for future integration             SageQuest
     appreciated the system’s potential for        to help increase fleet productivity and     www.sage-quest.com
     keeping employees more connected and improve operational efficiencies.                    Skytel Wireless
     its hand-free activation, allowing drivers        Introduced in January at the North      www.skytel.com
     to use the technology without taking          American International Auto Show            Teletrac
     their eyes off the road.                      (NAIAS), Sync has already received          www.Teletrac.net
         The system is compatible with a           the CNET “Peoples Choice” award at
                                                                                               Cell Phone-based MRM
     wide range of wireless carriers and           the Consumer Electronics Show,
     the majority of Bluetooth-enabled             Popular Mechanics Editors Choice
     applications. Available factory-              Award, and the Detroit News Coolest
     installed in 12 Ford, Lincoln, and            New Feature Award.                          Cube Route, Inc.
       • Low-cost, reliable wireless data              exceptions or other critical data.      Gearworks
       communications networks now                     • More MRM applications are             www.gearworks.com
       offer broad coverage.                                                                   TeleNav
                                                       now integrated with field force
       • In-vehicle telematics devices                 automation and transportation or
       are more affordable.                            logistics applications.                 www.xora.com
       • GPS-enabled cell phones allow
                                                                                               *@Road acquired by Trimble Feb. 2007
       fleet operators and enterprises to       What’s Next?
       implement MRM services with                 MRM suppliers are adding new              Services in first quarter 2007. The
       little cost or risk.                     fleet-beneficial features and functions,     survey will assess U.S. fleet operator
       • Web-based monitoring                   including:                                   interest in installed and handset-based
       applications eliminate the need              • Navigation.                            MRM systems and services, such as
       for dedicated software and                   • Traffic information.                   navigation assistance, traffic
       computer terminals.                          • Local weather conditions.              information, and remote diagnostics.
       • Increasingly, MRM suppliers                • Remote diagnostics.                    The study, scheduled to be published in
       are offering customizable                   C.J. Driscoll & Associates will           April, will also cover fleet operator
       vehicle activity reports enabling        conduct its 2007 Survey of Fleet             satisfaction with installed and handset-
       fleet operator access to                 Operator Interest in MRM Systems and         based MRM systems and services. AF

20          AUTOMOTIVE FLEET / February 2007