The future of trucking telematics could involve revenue sharing between carrier and technology service providers while “e-retailing” is changing the way trucks deliver goods.
That’s the view of Sandeep Kar, group VP of mobility research for global consulting firm Frost & Sullivan, who headlined a webinar this week sponsored by GPS Insight and hosted by Fleet Owner magazine.
As reported by Fleet Owner, Kar – a longtime Torontonian – said that sharing money generated or saved by motor carriers with their telematics providers is being viewed as the “next business model” for the trucking industry. He explained contracts with fleets which provide “cheap” telematics hardware and services in exchange for a “percentage of revenues resulting from technology savings is a business model that should “gain a lot of traction” in the coming years.
In the not-to-distant future, the cost of providing both telematics hardware and backend services will fall dramatically, allowing a much wider segment of the trucking industry to achieve efficiency gains. “The deal here is that telematics providers will be getting into contracts with fleets to a get percentage of any savings,” Kar explained. “And fleets will be happy to do that; if they are saving $8,000 per year per truck and pay $1,000 to get that savings, it’s worth it.”
He added that this new business model is already being tested with select fleets.
One of the main factors driving adoption of this model the adoption is advancements in service and maintenance as prognostics data helps reduce vehicle downtime. “That is the fastest growing proportion of telematics business today,” he said.
Kar, Fleet owner reports, also said that “E-retailing” is changing the way trucks are used to deliver goods – driving the need for more data.
“Same day delivery becoming more important [and] that’s driving demand for city trucks in urban areas to make more ‘last mile’ deliveries,” he explained. “That’s also resulting in a ‘polarization’ of truck classes; with demand for heavy truck and light trucks growing in the future, while the medium duty market, one can argue, will shrink.”
Yet trucking telematics still remains a “highly reactive” service, providing data to both the driver and fleet manager and leaving them to make critical operating decisions with it.
He added that this “proliferation of telematics” in trucking won’t just be driven by technology changes but by demographic changes as well, as younger drivers who want such “vehicle connectivity” enable a “market pull” for more telematics-based services.
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