Telematics and managing commercial auto risks

Telematics and managing commercial auto risks: 3 steps to success

AUTO FLEET MANAGEMENT  •  2 MIN READ

More cars on the roads, rising medical costs, distracted drivers, and higher repair costs are just a few of the factors driving the increase in commercial auto losses. In an effort to help minimize risks and better control costs, more businesses are exploring telematics technology. According to the most recent Fleet Management Technology Report, 44 percent of fleets now use some form of telematics.

However, to get the most return on investment from telematics, businesses need to consider a variety of factors. Here are three steps that can help companies successfully adopt and implement telematics in their operations:

Select a vendor that can help solve your business challenge.

Certain vendors are better at certain things, so it’s important to know in advance the problem your company is trying to solve to help ensure your vendor’s capabilities will meet your needs. For example, a company with a fleet of service vehicles that charges by the hour may want to track exactly when a commercial vehicle arrives at and departs from a specific location to help avoid billing discrepancies. A delivery operation may want to optimize routes to improve productivity and manage fuel costs. A business that is experiencing an uptick in vehicle accidents may prefer to review driver performance by individual, location and vehicle type to identify potential issues.

Translate data into useful information.

The high volume of data, notifications and detailed reports generated from a telematics system can be overwhelming. A business wishing to develop a successful program must know how to transform the data into information that can be applied strategically. For a company that uses telematics to track driver performance, getting an alert for every “aggressive” driving event (speeding, hard braking, etc.) may not provide much value. However, being able to review event rates (number of events per 100 miles driven) for individual drivers could be a better way to compare performance and identify outliers. Establishing suitable reporting parameters to create driver rankings or “scorecards” can help a fleet manager understand “average” performance, set realistic goals that support company objectives, and develop action plans for drivers in need of improvement.

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Telematics and managing commercial auto risks