Managing and maintaining a fleet of motor vehicles poses a significant asset tracking challenge. These large, expensive, and highly mobile assets have to be tracked and utilized effectively in order to maintain customer service and hold down operating costs.
Companies have increasingly turned to AVL systems to help track vehicles (and by extension their drivers), improve vehicle utilization and maintenance, and (when combined with other software applications) provide valuable operating data that can help improve business productivity.
"Increased fuel costs and other operating costs are forcing fleet operators to evaluate technology many have ignored in the past. Now, they can monitor and track those costs using technology and near-real-time communications," says Harold Allen, senior manager of industry solutions, transportation and logistics at AT&T Business Solutions.
AVL systems use geographic data to track motor vehicles, usually for fleet tracking and management applications. An AVL system typically includes a GPS receiver that is mounted on the truck or other vehicle, a communications link between the driver and the dispatcher, and software that can be used to keep track of vehicles and (in many cases) to optimize routing and scheduling. The software may include some type of geographic information system (GIS), a program that can store and manipulate geographic information.
Commonly associated with long-haul trucking and logistics companies, smaller fleet operators are now adopting the technology for service and repair, utility, delivery, telecom, construction, and public transportation applications. As GPS hardware costs have fallen, many of these companies have migrated from simple vehicle tracking to full-blown fleet management systems that provide more advanced functionality (such as vehicle diagnostics or on-board computing systems for the drivers) to improve routing and vehicle utilization while reducing fuel and maintenance costs.
"Monitoring your fleet for unauthorized use, speeding, and idling was the key metric for returns on investment over the past few years," says Jeffrey Cohen, CEO of Intergis. "While those continue to be driving factors, the economy is forcing providers to provide more for less. Now, customers want navigation capabilities, the ability to track assets other than vehicles, and if the fleet is large enough, some level of dispatch routing and scheduling."
"It's clear that the GPS market is maturing, especially with buying trends displayed by enterprises with large fleets," says Michael Jakab, vice president of sales and marketing at Wireless Matrix. "The prospective customer is educated about their options and aware of the challenges associated with deploying GPS solutions, and many appear to understand what it takes to make a project succeed."
HARDWARE PRICES CONTINUE TO DROP
The most significant trend in the AVL/GPS space has been a significant drop in hardware costs, coupled with an increase in functionality.
"The GPS/GIS/AVL industry has been advancing rapidly over the last year," says Randall Frantz, manager of telecommunications and location-based service solutions at ESRI. "The emphasis is on tracking vehicles, managing crews, and locating field assets."
Systems now have a greater capability to collect telemetry and other data from the vehicle, and thanks to increased bandwidth from wireless carriers, in-vehicle computer systems with 3G capabilities can also support richer applications.
"Greater bandwidth in the current environment will allow mobile applications to update back end systems more quickly and more frequently," Allen says. "This also allows mobile workers to have faster access to more information, such as quicker map updates for turn-by-turn directions, near real-time traffic advisories, etc."
Location systems can also be easily integrated with other applications such as dispatch, outage management, workforce management, safety, and human resources. Combined with in-cab navigation, AVL systems can improve safety, productivity, and predictability of estimated and actual arrival times (ETAs and ATAs).
"The in-cab GPS integrated platform calculates ETA and ATA values and makes the information available in the hosted application," Jakab says. "Once in the application at the server, these values can be shared with other systems like interactive voice response (IVR) for 'customer call aheads' or customer relationship management applications that need predictive information to use during customer interactions."
"Route optimization and planning, connected to navigation, are allowing operators of fleets to realize efficiency improvements of 15 to 25%," Frantz says. "This allows them to realize considerable cost reductions for fuel, labor, capital expense, etc. By integrating connected navigation and real-time location, these fleet operators can ensure that they realize the cost and environmental benefits of smart optimization and routing while improving on-time performance and customer service."
A few companies are even utilizing hosted software solutions, often referred to as application service provider (ASP) or software as a service (SaaS) solutions. "It's not widely accepted yet, but what we've found that is certain is that companies, especially in this economy, don't care whether this is a server-based system or an ASP," Cohen says. It is important, however, to recognize the difference between simple routing and scheduling solutions and those that actually perform route optimization, Cohen adds.
TAKE CARE SELECTING A VENDOR IN THIS FRAGMENTED MARKET
There has been an explosion in the number of AVL and fleet management system providers over the past few years, making it critical that customers perform due diligence before purchasing a system. "There are many new providers in the field. End-users need to be conscious that they are getting a solution (and solutions provider) that has the experience in their market and will enable them to realize the potential benefits of the technology," Frantz says. "These systems will continue to evolve to provide new capabilities. Users should select providers that will meet their need today and will invest the resources to continue to develop new future capabilities."
A number of financially less-stable vendors may fold as a result of the recession, so it's important to make sure your solutions provider is on solid footing and will be around to provide service and support for the term of the contract — and that their application can meet your requirements.
Companies shopping for an AVL or integrated fleet/route management solution should outline their business needs in advance of their search in order to evaluate the appropriateness of the wide range of hardware and software solutions available. "Checking references is key," says Jakab. "You need to know what use case you are attempting to resolve, and make sure it is being solved by others with a reasonable degree of accuracy."
By carefully evaluating vendors and outlining system requirements, a fleet operator can achieve a return on investment in a fairly short time based on the improved utilization and efficiency made possible with an integrated AVL system. With budgets tightening and operating costs rising, AVL-based fleet management could be the key to long-term profitability.