What is Telematics?

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If you’re a fleet manager, you may have a wish list for your business. It may include things like meeting compliance standards without having to think about it, saving on fuel costs across your entire fleet, streamlining your maintenance processes, improving your fleet’s safety record, and saving on insurance. Good news! All of these goals can be accomplished with telematics.

What is Telematics?

Telematics is a large and growing field. You’ve likely heard talk about it in the news and at industry events. If you manage a fleet, you probably encounter some form of telematics every day. But do you really understand what they are and what they can do for your business?

The term telematics refers to the convergence of telecommunications, vehicle technology, and computer science. In practice, telematics refers to the tools onboard vehicles that communicate and share data with fleet tracking systems. It includes a broad range of technologies like vehicle tracking, e-logging, remote control or self-driving vehicles, GPS tracking, and more.

How Does Telematics Work?

Telematics works with a piece or pieces of technology installed in a vehicle to monitor its status. This typically includes information like speed, location, fuel efficiency, driver hours of service (HOS), and more. This form of technology is part of any modern fleet tracking system since onboard devices are necessary to report accurate and exhaustive data on fleet status and activities.

First, the device must capture the data that will be tracked. This typically is done through GPS technology interfacing with the vehicle’s onboard computer system. The easiest options are plug-n-play OBD-II devices that simply plug into the vehicle’s diagnostic port. Next, the onboard technology transmits the data via a communications linkup with a fleet tracking system elsewhere, such as at a company’s office. Finally, the data is recorded and presented to be analyzed and to improve fleet practices.

Benefits of Fleet Telematics

Telematics has been shown to have real benefits for companies that use them, beyond the requirements set forth in the ELD mandate. Compliance is, of course, paramount. But other real benefits gained through telematics include better fuel efficiency, improved driver safety, predictive maintenance programs, and lower insurance premiums.


Some federal regulations, such as the ELD (electronic logging device) mandate, require the use of telematics in vehicles for specific purposes such as e-logging. The ELD mandate is a federal requirement for all commercial fleets. It’s a policy implemented to help make our roadways safer. In order to ensure that drivers are sticking to HOS compliance rules, ELDs must record and report driver data. For most fleets, the deadline for compliance passed in December 2017. The last compliance deadline will expire in December of 2019.

Even if there were no such mandate, telematics can help you monitor your own safety and efficiency practices to ensure that they fall within the legal requirements that apply to your fleet.

Fuel Efficiency

Fuel is one of the biggest costs incurred by a commercial fleet. Data from vehicle telematics can help a company to analyze its driving practices, improving its fuel efficiency over time. Fuel efficiency is impacted by problems like speeding, excessive idling, inefficient routing, unauthorized vehicle use, and sometimes even poor vehicle maintenance. Since telematics devices can help monitor and correct all of these problems, they’re a great way to lower your fleet’s fuel costs and improve driver efficiency and safety practices.


Wouldn’t it be wonderful if you could get an alert days before a truck will have a blowout or overheat? Vehicle telematics can pave the way for predictive maintenance on your fleet. With a good telematics program, you should be able to identify maintenance issues before they arise. Using a combination of machine learning, outside data sets, and advanced analytics, these programs can often alert operators and fleet managers to issues before they become acute, making repairs easier, faster, and less costly too.


By monitoring driver activity and practices, telematics allows companies to make decisions about what sort of fleet-wide training programs and driving guidelines to implement and improve safety practices. Some telematics programs even allow you to offer incentives to your drivers for using best safety practices in their everyday routines. This means you can gamify your safety program, so that your drivers actually compete to be the safest vehicles on the road.

According to Automotive Fleet Magazine, commercial fleets have a 1 in 5 annual accident rate, and the average cost of one of these accidents is around $70,000. Some commercial fleets have seen as much as a 50% reduction in the frequency and severity of accidents by using telematics technologies. Imagine the savings your fleet could enjoy by employing this life-saving technology. And since your drivers will be involved in fewer safety incidents on the road, you’ll also enjoy a boost in brand reputation. Most importantly, you can rest easier knowing your fleet is less likely to be involved in accidents which could result in injuries to your drivers or others on the road.


Vehicle telematics data can help to reduce insurance costs on your fleet by demonstrating a consistent record of driver and vehicle safety that cannot be disputed. Additionally, GPS trackers can help recover stolen assets quickly and with minimal interruption to your daily business. All of this adds up to lower insurance premiums for your fleet, and less impact on your bottom line. And we’re not talking about small change. In fact, given the dramatic improvement in safety that telematics can deliver, you could see as much as a 20% reduction in fleet insurance premiums!

What’s Next for Telematics?

Telematics is a field that has emerged relatively recently. It stands to reason that it will only continue to develop as technology improves. In particular, we may see more developments coming out of the convergence of big data and telematics. As technological wonders like self-driving cars and smart cities begin to see greater deployment, telematics may play an even bigger role in the Internet of Things .

Improvements in cellular technology continue to march forward. We’ve already seen many technologies make the switch from 3G to 4G, and looking forward, 5G technology is on the way. These improvements allow for more data to be transmitted in real-time. When you pair these advances with the adoption of technologies such as dashcam and telematics pairings, artificial intelligence advances, and the implementation of accelerated machine learning, we’re only beginning to scratch the surface of the ways telematics can improve commercial fleet operations.

If you haven’t taken stock of how a telematics system could positively influence your business, perhaps it’s time for a closer look. The real question is, can you afford to miss out on this vital fleet technology?