Telematics: A Resource to Managing and Optimizing Mixed Fleet Assets

The traffic slowed to a crawl in the summer heat as cars waited an eternity to pass the lane-widening project. The arrow board continuously sequenced letting all the cars know that the lanes were closed.  As I made my way past the project I saw it. Each arrow board was missing a tire. Utility construction equipment comes in many shapes and sizes from a Takeuchi mini excavator, Caterpillar skid steer to a Wanco arrow board. These assets are on the job all summer long just like their larger construction equipment counterparts. In this case the tire had been removed to prevent the theft of a valuable asset. You’ll never see a Volvo 250G wheel loader with its tire removed for security. However, nearly any vehicle with a tow hitch can take an arrow board. 

Construction equipment has unique needs. For nearly a decade, telematics has been used on smaller pieces of equipment both to keep them from getting stolen and to maximize the chance of recovery if it does go missing. On average, most fleets lose two to three pieces of equipment annually due to theft. The average value of a piece of stolen equipment is estimated at more than $22,000, according to the National Equipment Register (NER) and a recent report from the National Insurance Crime Bureau (NICB).

The same report estimates that the annual cost of all stolen equipment theft is about $400 million and the recovery rate is only 21 percent. The theft rate of compact equipment is even higher and the recovery rate is lower. Telematics systems can increase the rate of recovery by monitoring valuable assets and giving you a head start on finding it. Geofencing capability allows you to set up location boundaries on all your equipment and be alerted as soon as anything leaves the fenced-in area or is disabled. This helps you speed up asset recovery, reduce liability and avoid insurance premium hikes. Some companies justify telematics based solely on its ability to thwart thieves from stealing equipment from yards and jobsites.   

Improving Efficiency

Telematics can provide much more critical information to an organization than just dots on a map. In most cases, judging ROI on a telematics system versus removing the tire comes out in favor of a telematics system every time, and here’s how: A good telematics system is an enterprise resource planning tool that makes your business more efficient.

Optimizing asset use has become more important than ever, as public and private budgets are increasingly stretched thin. Project budgets are even tighter. Any asset, even an arrow board, parked unused on the side of the road for a month or two is wasted capital. Fleet managers are responsible for millions of dollars of equipment. Each year they need to replace a set percentage based typically off the size, age and usage of their existing fleet, but this is only accurate if the size of fleet and usage directly correlate. These managers wake up at night thinking about what gear is in their yard, whether they’ll have the right gear and how they’ll get it on site. Telematics systems tell you where your gear is, when it leaves the yard or the site and if it is in use.

Managers sleep easier, but here’s how the business improves. Let’s say you have a $10 million fleet of approximately 50 pieces of compact equipment that turns over 10 years. That results in an annualized capital expenditure, just to maintain your fleet, of $1 million. If better monitoring of your equipment can improve utilization by just 10 percent, then your business is saving at least $100,000 per year by reducing the need for a larger fleet. Many fleet owners report that utilization improves by almost 20 percent.

Telematics as a true enterprise tool extends well beyond just your compact equipment. Most compact equipment is small enough to be delivered on site by a Ford F-550 or smaller type vehicle. And many operators and site foremen will arrive in a company truck. While the physical assets compose the biggest portion of the balance sheet, human resources are the largest part of the P & L. 

Managers need to know where their trucks and people are too. Liability for your trucks and employees does not end when the quitting time bell rings. If one of your employees gets into an accident even after hours, employers are liable. And, these accidents are costly: $74,000 on average according to OSHA. Some telematics solutions allow seamless integration of truck fleet monitoring, asset monitoring and back office ERP. Telematics solutions also provide reporting for asset usage and truck idle times. An enterprise can now reduce after-hour’s usage and fuel consumption by monitoring truck idling while ensuring that customers are billed according to usage.

Now trucks, assets and the central office operate in unison and the whole enterprise is optimized — not just the fleet. Trucks know where to go. Assets are utilized and aren’t lost on the side of a highway, but are utilized to the fullest. Billing and the central office are able to see and react to it all.

AEMP Changes

Some fleet managers are not familiar with the recent telematics standard put forth by the Association of Equipment Management Professionals (AEMP), but they should be. The standard affects mixed fleets of all sizes. Heavy equipment manufacturers including Caterpillar, Komatsu, John Deere and Volvo have all agreed to provide some telematics data they collect to third parties in a common format. What does this mean to fleet owners and operators?

Your trucks, heavy iron and compact equipment data can more easily be viewed in one screen. OEMs have factory-installed hardware and the standard now allows you to take advantage of that. There’s no need to take your yellow iron out of service to install telematics hardware because all of your AEMP enabled equipment can push data into your telematics system. Currently, AEMP equipment is providing v1.0 data, which includes basic location, engine status and engine hours. Soon, AEMP will provide v2.0 data that will include more than 40 diagnostic troubleshooting codes. With this richer set of data, fleet managers will be able to provide their service technicians with the critical information needed to get the most out of any trucks on the jobsite.

Telematics systems have been deployed throughout the world on fleets large and small because of the inherent value to fleet owners, operators and managers. These systems allow users to optimize asset utilization, reduce theft and liability and centrally plan and manage equipment cycles, not to mention answer the age-old question, “What gear is in the yard?” 

The AEMP Telematics Standard facilitates the integration of heavy iron with the rest of your fleet providing more value and ease to mixed fleet operators. Compact equipment, heavy iron and trucks can now enjoy the big benefits of telematics.