Your 1st Steps to Connected Fleet ROI

It's no surprise that connected fleet telematics can deliver awesome efficiency savings, after all, this industry has been perfecting the art of effective telematics for over 20 years.

But often, the facts with tangible examples as to how that ROI manifests itself and under what conditions seem to be shrouded in hyperbole. That's why I've put together a bitesize summary of some real-world scenarios that help fleet leaders to get their heads around what they should expect to achieve with a top connected fleet implementation.

A whole thesis could be written on this topic, but here's the basics, all derived from real customer stories.

Cut Collision Costs by 60%+

A key logistics provider for a major international delivery company with a fleet of over 80 vehicles that deliver more than 8000 packages and 500 pallets daily realised that they were losing money and experiencing excessive risk due to collisions. They saw immediate benefits after connecting their fleet with a rich vehicle + video telematics solution.

Firstly, they saw a huge 96% decrease in accidents, dropping from 50 collisions per year to 2. The financial impact of reducing these accidents is approximately $50,000.

Secondly, customer complaints related to poor driving behavior were non-existent by the end of the implementation. Prior to implementation the customer received around 20 to 30 customer complaints every month. By monitoring driver behavior both visually and by using engine diagnostics, customer complaints were completely eliminated. This led to an ongoing saving of tens of thousands of dollars.

AI machine-vision-powered video is the key to managing not just the driving events but also the causal risky driving behaviors - that gets the collision reduction rate really towards the highest echelons.

Decrease Maintenance Costs by 20%+

Due to engineers having the ability to measure engine temperature, oil level pressure, battery voltage and accelerometer data, a passenger transport organization calculate that they have saved at least three engines in 6 months. 

This equates to a cost saving of $37,500, taking into consideration both the purchase of a new engine and downtime caused by the maintenance. Maintenance can now be carried out before further damage occurs, which helps increase the longevity of the vehicles.

Reduce Fuel Costs by 12%+

For over 60 years, this customer has been the leading provider of natural gas compression services across 20 states and boast the largest fleet of its kind in the US with over 1,200 vehicles but they came to us to help with their safety and fuel costs. In terms of financial benefits, there was a noticeable improvement in fuel economy, which, in return, resulted in cost savings. 

Monthly economy increased by 8% to 12% while it rose by 12% annually. This was due to the 20% reduction in idling time as well as the decrease in inefficient and risky driving behaviors such as speeding, harsh acceleration and harsh braking. 

For a fleet of 1,200 vehicles, this saving annually exceeds $200,000.

Cut mileage by 7% & increase utilization by 20%, whilst increasing productivity

There’s two ways to achieve cost reductions with respect to mileage – the first is the perspective of optimizing the utilization of the fleet and therefore being able to decrease the number of vehicles required to do all of the jobs.

The second is reducing wasted mileage across the existing fleet without downsizing, and then achieving greater productivity by converted wasted mileage to profitable jobs. Both ways require the visibility of mileage driven and vehicle utilization that only come from telematics.

Customers start to see positive results with respect to mileage reduction soon after rollout. In this customer example, results included a 17.54% reduction in harsh braking and acceleration events, a 10% reduction in continuous driving events, an 88.89% reduction in over-speeding events and a 7.44% reduction in total miles driven.

Exonerate drivers from false claims, saving 60%+ on claim costs

This customer is a key member of a leading distributor of steel and metal products in both European and North American markets. The company operates across 11 depots with a fleet of 100 trucks and were suffering from having to take the blame for crashes that weren’t their drivers’ fault. Their crash liability dropped 60% in 4 months, saving $75,000k after introducing fleet dashcams.

Not only were all the up-front costs made back in savings, but the company was able to prove its drivers not liable for incidents in 6 out of 10 claims. In one personal injury case against the company, connected fleet video telematics helped disprove the claimant’s accusations, saving the company more than $12,000 in damages.

Lower fleet insurance cost by 10%

The customer above also reduced their insurance premium by 10% by using fleet dashcams with telematics visibility and data. For a fleet of 100 trucks, this insurance cost reduction approaches $50,000k per year.

Minimize recruitment costs by increasing driver retention by 10%

Telematics programs lead to better, safer drivers and certainly more engaged and motivated drivers. This minimizes losing your best drivers to the competition. Typically organizations that use telematics increase their driver retention by at least 10%. For every driver that you keep you’re saving over $6,000 in replacement and recruitment costs.

Save 20% on overtime costs by eliminating erroneous claims

Most small businesses run on tight margins, needing to stretch every dollar to maintain a profit. One customer, a California-based excavation and landscaping company, is no exception. The 13-person operation runs eight vehicles, ranging from pickups to dump trucks. As the owner says, “We wanted visibility into where our staff and vehicles were – how long they were on job sites, and if they were where they were supposed to be.”

The owner also wanted to track driver behavior such as speed, hard accelerations and harsh decelerations. Within the first week, the solution identified a longstanding time calculation error that resulted in 50+ hours of unnecessary overtime each week. This alone saved the company almost $1,000 a week.

Conclusion

Effectively, the typical ROI ratio I see is $5 saved for every $1 spent on a connected fleet solution, increasing to as much as $10 to every $1 for a rich video AI dashcam + rich telematics solution. To give some idea of scale for a fully-fledged solution delivering 10:1 ROI, for a fleet of 100 trucks in a typical logistics scenario the annual saving would equate to around $450,000.

I hope that this short introduction to the first steps to ROI was a worthwhile read for you!