How Commercial Vehicle Telematics Can Streamline Your Business

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According to the 2022 Penske report, Telematics Use and Trends, 54% of large fleets, 51% of medium fleets and 37% of small fleets use telematics to improve efficiency, cost-savings and safety.[1] Since 2022, even more companies have incorporated this technology into their fleet management model and most larger corporations have been using telematics solutions for years.

If you have a small to medium-sized fleet or multiple trucks or cars that are used for business, telematics may benefit your fleet management team by improving operational efficiency and lower operating costs.

Here’s everything you need to know about commercial vehicle telematics and if it’s the right choice for your business.

Key Takeaways

  • More than half of medium-sized businesses and just under 40% of small businesses use telematics for commercial vehicles.
  • Having a commercial telematics system promotes safe driving, gas efficiency and fast response times to emergency situations.
  • GPS can track location and how long a trip took, but telematics can tell you that and how to save money and time the next time around.
  • Fleet telematics can help prevent accidents and save money.
  • Fleet managers can better track drivers using fleet telematics

What Is Commercial Telematics?

Telematics systems combine the technology of GPS with other forms of telecommunication to provide data on driving routes, location, fuel consumption, vehicle speed, engine health, hard braking and even driver fatigue as it relates to company vehicles. Telematics have been around since the 1990s and even passenger vehicles are equipped with them for safe drivers who want to save money on car insurance.

Commercial telematics works a little differently than telematics for passenger vehicles in that the data the device tracks does not go solely to the insurer, but also to the company’s fleet manager via the cloud so that they can note all the driving behaviors and routes taken by the driver.

Commercial telematics helps the manager offer alternative route suggestions, if necessary, or emergency help while the vehicle is on the road, thereby avoiding wasted time and fuel as well as providing more safety. It will detect excessive idling, which is wasteful of gas.

Used correctly, commercial telematics systems can also regulate vehicle temperature, detect mechanical problems or signs of fatigue, seat belt usage and more, all depending on the purpose of the vehicle’s usage. Also, commercial telematics helps promote accountability for safe driving when using business vehicles.

How Does Business Vehicle Telematics Work?

A telematics device, often called a “black box” is connected to the GPS. The device has a SIM card, much like a smartphone’s, which transmits information (telematics data) from the car’s engine to a modem or server that is connected to the company's computer systems. A fleet manager can download the data any time and data refreshes every 30 seconds or so.[2]

It can be used to see what route a driver is taking, the amount of fuel usage during the trip or to see why the fleet vehicles may be delayed and potentially see if a vehicle has been in an accident. People in the food industry can make sure temperatures are at safe levels and take measures to quickly rectify the problem if they are not.

Aftermarket commercial vehicle telematics also come with smartphone-based telematics devices, Bluetooth-powered telematics devices, OBD-II port telematics devices and video telematics systems.

Is Commercial Telematics the Same as GPS Tracking?

A commercial telematics system works with GPS to deliver information about the vehicle’s journey and driving behavior. GPS data alone is limited, but commercial fleet telematics can deliver more data than GPS alone, which mainly tracks vehicle location. Commercial telematics are also more nuanced than personal telematics devices, giving fleet managers more insight into various factors, like harsh braking, idling, transit routes, vehicle temperatures, all while the vehicles are in transit.

GPS can only tell you how long the vehicle journey took to complete, but commercial telematics can optimize the trip so that the next time around the driver will take a better route that avoids traffic or excessive gas usage.

What Types of Companies Use Commercial Vehicle Telematics?

Here are the top industries that favor fleet telematics as a fleet management solutions over traditional commercial auto insurance, which does not provide fleet tracking:

  • Construction
  • Commercial fleets
  • Public transport vehicles
  • Rental/car sharing programs
  • Marine
  • Aviation
  • Agricultural vehicles
  • Service Companies (HVAC, plumbers, etc.)
  • Government fleets (street sweepers, etc)

In general, any industry that employs drivers and wants to improve driver safety and accountability should look into commercial vehicle telematics. The information collected can tell telematics fleet managers which drivers need more training and can help weed out high-risk drivers who refuse to comply with following the legal speed limit and other safety requirements. This is why having a telematics system is becoming a necessary part of fleet management requirements in a business insurance policy.

What Are the Benefits of Commercial Vehicle Telematics?

The greatest benefit of telematics is the reduction of car accidents and traffic violations. Not only does the tracking encourage safer driving, fleet telematics can save your business time and money, by becoming more gas efficient after optimizing routes and avoiding hard braking and idling.

Not only will your organization save money but the fleet will remain in better condition for a longer period of time. A fleet telematics program may also anticipate mechanical breakdowns before they happen, making vehicle maintenance an easier task for fleet managers. For those who handle food or other temperature-sensitive materials, it’s possible to maintain optimal temperatures without fail, as long as the fleet manager is overseeing the driver’s journey.

Telematics devices also allow you the opportunity to coach employees on improving their driving behavior based on telematics data. Be sure to speak with your employees about telematics before you begin using it. Transparency about why you’re adopting commercial vehicle telematics should ease your workers’ minds.

What Are the Downsides?

Some people are generally wary of any devices that track their behavior and location. Some companies are worried about data security. It’s a good idea to speak with the people who will be operating the commercial vehicles about the benefits of telematics technology and to explain what the device can and cannot track.

Sometimes it’s just a matter of explaining that it won’t be able to capture what you had for lunch or when you went to the bathroom and other private matters. Vehicle tracking is different from surveillance. The fleet telematics system tracks the car, mostly based on its engine activity, not the driver.

While high-risk driving behavior will be tracked, a telematics device is not an all-seeing camera that watches the employees every move.

Another downside to commercial vehicle telematics is the sheer volume of data that gets sent to a fleet manager. It’s a good idea to work with your insurer to come up with a system that helps you streamline the information in a way that is most useful for your organization.

While you can save money each month in premiums and fuel efficiency, the reverse is true too. If your employees brake fast and speed or have frequent accidents, you may have to pay higher rates.

How To Get Commercial Vehicle Telematics for Your Business

When you compare commercial auto insurance rates, ask the insurance companies if they offer a telematics program for commercial vehicles. Also ask about what types of activities you can track with their device and what kind of information you need. It’s generally assumed that the device will be working with a car’s GPS system. There are workarounds with aftermarket telematics if your commercial vehicle doesn’t have GPS, but the data will be less accurate.

Get a Free Commercial Insurance Quote for Your Fleet Today!


Are commercial telematics secure?

The data collected from the telematics device will be securely transmitted to the hub of choice, such as modem or in the cloud. Some devices allow you to refresh data every 30 seconds.[2]

What type of data can commercial telematics collect?

Fleet telematics can collect vehicle specific data on route adherence, more optimal routes via traffic data, harsh braking, speeding, idling, gas consumption, CO2 emissions, vehicle temperature, driver performance and engine and overall vehicle health, vehicle location and more.

Can commercial telematics help our business save on insurance?

If your drivers are exhibiting safe driving behaviors, your insurance rate will probably be cheaper than a standard commercial auto policy rate. However, if you have some workers who are consistently speeding or hitting their brakes hard, your rate may increase.

Get a Free Commercial Insurance Quote.