How to Calculate Trucking Telematics ROI

How to Calculate Trucking Telematics ROI

Fleet SafetyTrucking companies can use telematics to improve several areas of fleet management. Telematics can help reduce fuel costs, lower insurance rates, improve safety, and manage maintenance proactively. Trucking companies need to document their returns to understand what they’re getting out of their investment. The following are several steps to understanding the true value of telematics data.

  1. Measure the existing data. It’s impossible to understand the effect of telematics without establishing a starting point first. Fleet managers should document current expenses and pain points before implementing new telematics. After the software or hardware is in place for a few months, fleets have concrete data to provide a reliable synopsis.
  2. Identify which metrics to track. Not all telematics data are relevant for any given fleet. Some fleets may need to focus on safety and fuel costs, whereas productivity and customer service may be of great concern to others. Too much data can make it difficult to calculate the true value of telematics. Aligning metrics with fleet goals can avoid this issue.
  3. Take direct and indirect costs and savings into consideration. Some cost savings are straightforward, such as spending less money on fuel. However, some cost savings are indirect, such as incurring fewer violation fines. Expenses work the same way. Fleets have the upfront cost of their initial investment in telematics, but they likely have other long-term expenses (e.g., training employees how to use new hardware or software, monthly service charges, etc.).
  4. Establish goals for telematics ROI. Telematics data isn’t useful for goals that are too broad or general. Setting fleet-specific goals provides a focal point for measuring telematics ROI. Fleets should also avoid trying to improve everything at once. Pick one area that needs improvement and create goals to achieve it.
  5. Document and share the findings. Data is a powerful tool for fleet managers. Documenting improvements can establish clear returns on implementing telematics. Fleets can also use that information to make data-driven decisions and show company leadership the benefits of telematics. Fleets can also use the data to show drivers the fruits of their efforts, such as fewer accidents, fewer safety violations, reduced fuel costs, and more.

Telematics can reduce fleet operating costs, improve safety compliance, and decrease driver risks. Contact the experts at Interstate Motor Carriers to learn more ways to improve safety and reduce costs for your trucking company.