The rapid growth in online shopping is placing ever greater demands on an increasing number of fleets.
A study by RetailMeNot and the Centre for Retail Research found that online retail expenditure in the UK was £38.84 billion in 2013, rising to £52.25bn last year.
Its research anticipates this will rise 15.3% this year, to £60.25bn.
This has been driven by the growth of companies such as Amazon, while the number of people having groceries delivered after buying them through supermarket websites is also rising.
To cope with the extra demands, more fleets are using telematics to improve their productivity. Consequently, vans can deliver more goods in less time while using more efficient routes.
The technology can also be used to manage deliveries in real time for improved customer service.
“Telematics really enhances home delivery companies’ ability to give real-world delivery windows to customers,” says Steve Towe, chief operating officer and UK managing director at Masternaut.
“Where planned schedules are theoretical, telematics offers a concrete, proven schedule that allows delivery firms to give accurate information to customers, which isn’t based on theory.”
However, Towe says the benefits of using telematics to increase fleet productivity are not just restricted to home delivery companies.
“I don’t think productivity is an issue for businesses in just one sector,” he explains.
“There’s no single fleet that benefits the most from telematics for routing and scheduling, as it helps every fleet, regardless of size.
“By using better scheduling and better routing, you can access savings that can be invested into other areas of your business.
Towe says the benefits for service fleets include improvements in the accuracy of in-day replanning.
“Live vehicle positions are used to ensure that fleets are making the most cost-effective replanning decisions based on real-world data,” he adds.
For a delivery company, telematics is used to calibrate your service engine with real-world data on turnaround and travel times.
“Telematics tells them exactly what is happening, so they don’t need to make decisions based on guesswork or assumptions.”
Kings Security Systems, which has a 331-strong fleet of job-need vehicles (142 cars and 189 vans), has already experienced an increase in productivity since its web-based planning and tracking system went live in January.
The telematics system has been fitted to the company’s service fleet to improve scheduling as well as recording driver behaviours such as speeding and idling.
When a job comes into the security systems provider, the technology seeks out the nearest available driver who has the right skillset to carry out the work.
“Since the implementation of the Aeromark system, our customer response time has improved enormously, increasing the number of calls we can do by 1.5 per day, per engineer,” says Jacob Telemacque, fleet manager at Kings Security Systems.
As well as increased response times and improved vehicle allocation, the ability to allow vehicles to be used based on their specific location or the job has other benefits, according to John Webb, principal consultant at Lex Autolease.
“It can prevent unnecessary journeys, potentially saving the company money on fuel, the number of vehicles used, maintenance spend and overall resourcing,” he adds. “Another benefit is a reduction in CO2 and NOx emissions.”
DPD says that the increase in productivity that followed the launch of its Predict system in 2010 resulted in the average carbon per parcel reducing by 15%, as well as an increase in the number of parcels on each delivery route.
The £2 million system, a combination of satellite navigation, parcel technology and route optimisation, was developed by the company’s own IT department and operations team in close association with local depot managers.
“The benefits from Predict have been huge – from helping retailers drive repeat sales from happy customers to massive efficiency and cost savings from dramatically fewer failed deliveries,” says Dwain McDonald, CEO of DPD Group UK.
“To deliver an equal number of parcels, we can now run significantly fewer vehicles and drive a lot less miles, which in turn reduces our cost per stop and our CO2 emissions.”
Predict aims to deliver parcels within a one-hour window and notifies recipients of their delivery slot via text or email.
It then allows them to watch the progress of their DPD driver during their round.
It also provides them with a real-time countdown to their own delivery.
The company, which delivers more than 2.5 million parcels a week, delivers 98% of parcels within that one-hour time slot, with the majority of depots achieving 100%.
A further development of its system will see the company launch new platform DPD Precise in the summer, which will allow customers to choose their own one-hour delivery slots. This will be narrowed down to 15 minutes nearer the expected time.
The use of telematics technology also enables fleets to increase awareness of issues which may delay a scheduled delivery or appointment.
“Using telematics for routing and scheduling gives you a much better idea of the estimated time of arrival,” says Paul Foster, director of solutions engineering at Telogis.
“If the driver is running a bit late because of traffic or a delay with the previous customer, because we know where the driver is, we can calculate in real time a fresh estimated time of arrival and start to warn relevant parties about that.”
The potential to improve customer service was a key driver in Rexel UK’s decision to fit telematics across its fleet of more than 350 light commercial vehicles at the beginning of the year.
“We pride ourselves on putting customer service at the heart of our business,” says Melvin Teale, head of logistics at the electrical supplier and services distributor.
“Speed and consistency of service to all our customers is key and we are now moving ahead to implement a telematics solution which will help us achieve our goals.”
The company will also implement journey management and electronic proof of delivery systems.
Teale adds: “It is too early to be able to give definitive data as to productivity improvements, but we do know from previous trials that fuel savings of nearly 10% have been achieved.”
Supermarket giant Iceland has also reduced fuel bills by 10% after introducing telematics to improve driver behaviour – which it did, leading to 40% fewer accidents – for a welcome side-effect.
“An unexpected outcome was the benefit to our customers,” says Alex McKinlay, commercial fleet manager at Iceland, which has a fleet of 1,500 vans making a combined 200,000 deliveries each week.
“We have seen an improvement in customer service as vehicles are now leaving the stores earlier and arriving on time so complaints from customers are very low indeed, meaning they are more likely to shop with us again and recommend us to their friends and family.
“Telematics also provides us with the ability to understand exactly where our vehicles are and when they are, and are not, being used.”
A further benefit of using telematics is that fleets can use it to ensure the optimum routes are being followed.
“You can use optimisation and scheduling tools to plan what the most efficient route is going to be, but telematics allows you to monitor what your drivers are doing and make sure that your optimised plan is being executed,” says Foster.
“Quite often drivers feel they know best and they’ll sometimes try to execute a route in an order that’s not what you intended, so by comparing the plan against actual monitoring, you can tell where they are going off route and take corrective action within real time.”
Telematics can also provide tangible evidence for fleets which work to service level agreements (SLAs).
“SLAs could be based on number of visits or jobs done per day or reducing CO2 emissions, which can be achieved by creating better route schedules,” says Masternaut’s Towe.
“The climate out there is driving many businesses with fleets to look at how they can optimise utilisation, and ultimately drive profitability through efficient and excellent customer service.
“Every fleet has scope to improve, and if you’re not driving increasing efficiency on an ongoing basis, and your competitors are, then your business will suffer.”
How can … telematics improve vehicle reliability?
Telematics can increase productivity and vehicle utilisation by reducing the time vehicles are off the road due to unscheduled maintenance issues, says Paul Foster, of Telogis.
“Real-time feedback, served by intelligent telematics-based solutions, is helping fleet maintenance managers make smarter decisions on which vehicles to service and when,” he says.
“Maintenance scheduling is changing from the standard distance/periodic/hours used model towards more intelligent ‘as required’ scheduling based on real feedback and analysis of the vehicle condition and usage.
“In addition, telematics can more easily store a maintenance schedule and record for every vehicle, helping businesses plan ahead as well as to set, measure and review safety benchmarks more efficiently.”
Foster says manufacturers such as Ford are now directly building these preventative solutions into vehicles on the factory floor, offering fleets a range of integrated vehicle health information and alerts on mechanical issues including water contamination in the diesel and oil life remaining.
How can … telematics reduce the impact of vehicle theft?
Fleets can reduce vehicle downtime and improve productivity by using stolen vehicle tracking, says Andy Barrs, head of police liaison at Tracker.
While tracking will not prevent the theft of a car or van, it significantly increases the chances of it being located and recovered, he adds.
“We’ve seen businesses, such as local plumbing firms, have a vehicle stolen, but being able to repatriate that vehicle and all of the kit in it quickly saves so much time and money,” says Barrs.
“Around 83% of all our recoveries are made within the first 24 hours and this is so important to the customer because we find that any longer than that any equipment in the vehicle is usually whipped out and sold on.”
How can … telematics improve driver behaviour?
Information collected by telematics systems can be used to improve driver behaviour, thereby reducing the number of accidents that require a vehicle to be off the road while it is repaired.
The technology can be used to record instances of harsh braking or acceleration, as well as excessive cornering speeds, and these can be used to identify training needs.
“From a safety perspective, logistics managers can also identify and correct erratic and dangerous driving using telematics systems,” says Paul O’Dowd of In-Car Cleverness.
“Many devices use ‘risk portals’, which can flag erratic, dangerous and speeding drivers in the form of an email or text message.
“This can offer a further proactive route to monitoring vehicle wear-and-tear, improving fleet mileage and avoiding unnecessary incidents and speeding fines in liveried vehicles which ultimately carry a firm’s reputation.”
John Webb, principal consultant at Lex Autolease, adds: “Telematics systems are most effective when combined with driver training. The two, while implemented in conjunction, will make for a safer, more efficient fleet.”
How can … fleets choose the right technology?
Fleets considering introducing telematics to increase productivity should take care to select the right system, says Paul O’Dowd.
“Potential pitfalls can usually be avoided by selecting the right technology for the business in question,” he adds.
“Satellite-based telematics systems, known as hardwired systems, suffer some issues in accuracy because they rely solely on satellite positioning. These signals can be intermittent, for example when a vehicle is in a tunnel or driving in a remote area.
“On-board diagnostics (OBD) systems now integrate the functionality of satellite-based systems but offer a more layered approach to data diagnostics – tracking both satellite data and vehicle CANbus readings.
“The on-board systems can therefore generate more accurate data – essential to the home-delivery market, where precision is key.”
Case study: Clymac
Fire detection and security system provider Clymac has had an increase in operating efficiency after installing a new vehicle tracking system across its fleet.
The company, which operates 39 cars and two vans, last year replaced an under-performing product with a Ctrack telematics solution.
“Our drivers are all fire and security alarm engineers, so there’s a split between pre-planned maintenance engineers and on-call guys,” says Mark Connolly, operations manager at Clymac.
“The primary reason we’ve got the devices in the vehicles is to allow us to meet our prescribed service level agreements and get the right engineer for the right job.
“It’s a live location finder for us and the software is intelligent enough for us to pre-install all our sites on to the system.
“We can punch in ‘fire alarm going off at XYZ store, we need an engineer’ and then a quick couple of clicks of the mouse and the guys on the help desk can figure out who the nearest engineer is and get them there as quickly as possible.
“The Ctrack system is reliable and has helped with our efficiency. I couldn’t put a stat on it, but it has had an increase in the efficiency of getting the right person to the nearest job.”
Connolly recommends that any fleets considering adopting telematics to improve productivity should carry out comprehensive market research.
“Don’t be swayed on price when choosing a solution,” he says. “Although there were cheaper solutions out there when we were looking at them, we’ve had our fingers burned by an economy product in the past.”