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What Is Telematics?

What Is Telematics?


Telematics provides fleet operators with unique insight into their vehicles and drivers.

Telematics systems provide fleet operators with critical insights about their vehicles and drivers.

Combined with GPS tracking, telematics provides a complete picture of where vehicles are and how they are being operated.

The data from telematics allows fleet managers to develop more efficient routes and maintenance schedules and train drivers more safely.

This article is intended for business owners and fleet managers who want to learn how telematics can improve their company vehicle operations.

Telematics has become an essential tool in the trucking and transportation industry. By combining telematics systems with fleet management software, you can make informed decisions to improve the efficiency of your fleet and your business. To get the most out of your fleet, you need to understand what a telematics system is, how it works, and its benefits.

What Is Telematics?

What is a telematics system?

Telematics is the transmission of information from a remote location over long distances. Telematics is a fusion of two scientific disciplines: telecommunications and informatics (the practice of information processing).

Telematics systems (also called fleet telematics) use GPS technology, sensors, and onboard diagnostic codes to collect data. This data includes real-time engine diagnostics, vehicle location, driver behavior, and vehicle activity. Telematics systems typically have the following components


  • Fleet communication software system
  • GPS tracking device
  • Engine interface
  • Input/output interface
  • SIM card
  • Accelerometer
  • Buzzer
  • Telematics vs. GPS Tracking

GPS tracking is at the core of telematics systems. A black box-like GPS receiver is installed under the dashboard of each vehicle to collect real-time data on the vehicle’s location and condition. The telematics system transmits the GPS tracker data to the fleet system’s central server via a cellular network. The server processes the data and converts it into usable information that can be accessed by other computers on the network.

How do telematics systems work?

Telematics systems use the vehicle’s GPS tracking device to send, receive, and store telemetry data. The device connects to an on-board diagnostics (OBD-II) port or CAN bus port with a SIM card. It also uses an on-board modem to communicate with the company’s central server via a wireless network.


The telematics system collects GPS and vehicle-specific data and transmits it to the central server using a variety of methods (cellular networks, satellite communications, 4G mobile data, and general packet radio services). The server analyzes the data and allows the end user to view the results through a secure website or mobile app.


The telematics system collects these and other data about the vehicle


  • Location
  • Usage status
  • Maintenance issues
  • Fuel consumption
  • Idling time
  • Extreme driving (e.g., emergency braking and cornering)
  • Speed and sudden acceleration

Data can be analyzed for specific events or patterns and reports can be generated on the entire fleet, not just specific drivers or vehicles.


Other uses of telematics systems

Telematics systems can be integrated with fleet management software and other systems to support a variety of applications


Vehicle tracking: Vehicles can be tracked in real time using GPS receivers, satellites, GPRS networks, and cloud computing.

Asset tracking: GPS trackers can be attached to trailers and non-motorized assets to know where they are at all times and direct drivers to specific trailers. Drivers can tag a specific location when exiting a trailer. The system can also be set to alert the driver if the trailer moves without prior permission.

Maintenance Telematics systems can be used to manage vehicle maintenance and asset life cycles. The system can track time-of-use records, engine hours, and service records to help schedule preventive maintenance and monitor warranty recovery. Tracking engine diagnostics (oxygen sensors, battery voltage, intake valves, coolant temperature, powertrain, etc.) can help manage maintenance costs and monitor vehicle operating conditions.

Track safety: Telematics systems can monitor truck speed and position, identify harsh driving practices, and verify that drivers are wearing seat belts. This information can be used to determine how best to help drivers prevent accidents and improve safety.

Insurance risk assessment: Insurance companies can use telematics to monitor driver behavior, assess risk levels, and set insurance premiums.

What vehicles can telematics be used in?

Telematics can be used in most modern commercial vehicles. Many commercial vehicle manufacturers already have GPS tracking and telematics systems in their fleet vehicles. Aftermarket GPS devices can be installed in most modern commercial vehicles. These devices are powered by the vehicle’s electrical system or internal battery.


Some vehicle manufacturers have partnered with telematics systems.

What are the benefits of telematics for fleets?

Telematics offers a variety of benefits to fleet operators


  1. increased efficiency and productivity.

Telematics uses GPS tracking to monitor vehicle locations in real time. The data collected can be used to create safer and more efficient routes for drivers, reducing delivery times and fuel usage. Geo-fencing can also be used to track and compare driver performance against delivery schedules to reduce driver hold times.


  1. reduce fuel and operating expenses.

Telematics can be used to plan smarter routes and reduce fuel usage and other expenses. For example, software can be used to track and reduce vehicle idling time. By comparing idling times of different drivers and vehicles, you can quickly determine who needs improvement in this area. Reducing idling time can further reduce fuel costs, the largest expense for fleets.


  1. payroll management is automated.

Telematics provides accurate data on how long and how far a particular vehicle has been on the road. This allows for automation of employee records and payroll management. This reduces administrative and clerical work required manually and minimizes potential errors.


  1. it facilitates proactive vehicle maintenance.

Telematics allows vehicle maintenance issues to be identified and addressed remotely. Hours-of-service information can be used to schedule preventive maintenance. Real-time alerts notify you of detected vehicle fault codes so you can correct maintenance concerns before they escalate. This can keep vehicles running longer, save significant repair costs, prevent serious safety violations, and protect your CSA (Compliance, Safety, Accountability) score.


  1. streamline communication with your organization and customers.

Fleet management software can support real-time, two-way communication between office staff and drivers. Telematics also allows customer support personnel to better serve their customers by providing real-time information on vehicle locations and accurate delivery forecasts.


  1. driver safety.

Car accidents can negatively impact not only business, but also driver health and safety. Telematics can be used to improve driver behavior and increase overall road safety. Vehicle management software can collect telematics data on your team’s driving behavior and rank drivers by safety scores. It can then instruct drivers on safer driving habits and improve the overall safety level of the fleet.

  1. assist drivers with legal proceedings.

Most accidents are caused by collisions with cars or other vehicles. Without evidence to corroborate the driver’s testimony, it is difficult to prove who was at fault. Since courts often accept video footage as evidence, we can use dashcam footage to prove the driver’s innocence and protect your company from legal and financial liability.

  1. automate IFTA reporting.

Telematics and fleet management software can automatically calculate mileage and fuel costs for different drivers in different jurisdictions. It can also automate the calculation of International Fuel Tax Association reports, increasing administrative efficiency, reducing calculation errors, and minimizing the risk of a company being audited.


The Future of Telematics

Telematics is becoming an integral part of the trucking and transportation industry. The resulting savings and efficiencies tend to far outweigh the costs of implementing and managing the technology.


With the introduction of electronic logging devices and ELD mandates, the trucking industry will continue to evolve with increased use of telematics technology.


Expansion into the Open Marketplace

Telematics providers previously operated strictly within a closed ecosystem. Fleet operators would purchase and install their own in-vehicle computers that would only work with the provider’s telematics software. Operators would be required to use available add-on applications, which would be updated on the provider’s schedule and would only share certain data.


Smartphones and tablets can create applications for specific hardware, such as telematics systems. Fleet owners can address the needs of individual drivers by downloading the appropriate apps, and they can use and integrate different apps on the same device. They can also download apps for the back office or management team.


The option to use multiple apps gives fleet owners this ability:


  • Find appropriate solutions to specific problems.
  • Automate tasks across multiple platforms.
  • Discover new insights from different sources.
  • Transform data into insights.

Telematics collects vast amounts of data (mileage, driver speed, fault codes, fuel usage, idle time, aggressive driving behavior, etc.). But data alone cannot solve problems or answer questions. It is difficult to draw insights or identify problems or opportunities when data is simply organized in a spreadsheet.


Telematics systems can assist fleet owners by using analytics to identify trends and problems. For example, they can reveal unusual failure codes that have occurred in a particular vehicle, drivers with more significant driving events than average, underutilized vehicles, etc. It can also identify potential events (e.g., drivers who may cause accidents in the future) and make recommendations to optimize vehicle usage.


Increased use of video

The increase in telematics systems, including dash cams, will allow fleet owners to supplement the data collected with the context of video. Instead of relying solely on data, they will be able to use video to evaluate drivers and instruct them on how to drive better. They can also use video to review specific situations (e.g., how to park a truck) and find ways to improve or address problems.Deployment to Business Management. Telematics can do more than just track vehicles.