Tapping fleet management growth opportunities

A continued tough economic climate is driving trucking companies to look for new and creative ways to master two critical business challenges: cost control and regulatory compliance.




While wireless fleet management solutions may have been
met with some hesitation in the past, it’s time to realize that mobile solutions can
significantly reduce paperwork, increase productivity, and improve vehicle maintenance and safety.
New mobile software products can even streamline onerous government compliance tasks
and proactively identify safety issues – letting you address problems well before the
government has to step in.




According to a 2010 Frost & Sullivan study of U.S.
mobile and wireless purchase decision-makers, an expanding majority (60 percent) of
respondent companies recognize the business value of mobile fleet solutions.1 Those
companies that have actually implemented a mobile fleet solution report impressively
high levels of satisfaction and real hard-dollar ROI impacts.




Price points have dropped. Capabilities have become more
robust. Usability has improved. It’s time to move to mobile.








As we settle firmly into the 21st century, it would be
difficult to overstate the continuing importance of our nation’s transportation and
distribution industry. For just under a century, the trucking segment has transported and
distributed goods to a complex network of cities and communities across the country. As a
result, trucks and fleets have become a key component of the massive distribution system that
supports the U.S. economy and our citizens’ current standard of living. In fact, as of
2009, trucks were responsible for delivering about 70 percent of total freight tonnage and reaping 82
percent of total freight revenues.2



Consider what would happen if this effort came to a




Clearly, today’s trucking industry is a major force in
keeping the U.S. economy humming. However, this industry faces an uncertain future, and
individual companies are battling on multiple fronts to survive and thrive. With the recession
causing thousands of bankruptcies, massive layoffs, and sharply reduced trucking volumes,
experts are still looking for the long-awaited turnaround year. Turnaround or not, however,
most companies will continue to have to deal with two major business challenges that
directly impact a fleet’s bottom line – government regulations compliance and ongoing expense




Regulatory Compliance:




Motor carrier regulations are a fact of life, with
government agencies and fleet operators continuously negotiating to a set of win-win
rules that help ensure both safety and profitability.




The introduction of CSA 2010 (Compliance, Safety,
Accountability) has caused a high level of angst on the part of commercial motor vehicle
entities. This new program was introduced by the Federal Motor Carrier Safety
Administration (FMCSA) with the goal of reducing crashes and fatalities. It measures the previous
two years of roadside violations and crash data for drivers and carriers, scores the
individual carriers according to safety level, and intervenes to identify and correct problems
before a crash occurs. Seven performance categories are measured:




Corrective actions for these violations can range in
severity, from simply implementing an agreed-upon safety plan to receiving an operations
out-of-service order that requires the carrier to cease all vehicle operations.




CSA 2010 encompasses previous Hours of Service
regulations, which were devised to reduce driver fatigue, increase alertness, and avoid
accidents. While they may continue to be legally contested, the HOS 11-hour driving and 34-hour
restart provisions remain in place. Any driver who is driving beyond 100 air miles
from his or her home depot has to declare at least seven days of HOS history.



Behavior Analysis and Safety Improvement Categories



– Unsafe Driving – Operating a vehicle in a dangerous or
careless manner.



– Fatigued Driving – Utilizing drivers who are sick,
fatigued, or in violation of Hours of Service (HOS) regulations.



– Driver Fitness – Utilizing drivers who do not have the
necessary training, experience, or medical qualifications.



– Controlled Substance/Alcohol-Operating a vehicle while
impaired by alcohol, illegal drugs, or misused medications.



– Vehicle Maintenance – Failure to properly maintain a



– Cargo-Related – Failure to properly load cargo and/or
safely handle hazardous materials.



– Crash Indicator – A history of high crash involvement.




IFTA (International Fuel Tax Agreement) laws constitute
another set of mandates. Any heavy truck that crosses state, province, or country boundaries
must file IFTA paperwork that declares the number of miles driven in each jurisdiction.
The paperwork must also record where the vehicle’s fuel was purchased. Then, based on
this information, the gas tax portion of fuel purchases is distributed among the various
jurisdictions traveled.



Lastly, increased attention is being given to anti-idling
laws. In an effort to decrease toxic emissions, these legal regulations also hold the
promise of greatly reducing fuel usage and costs. However, as with the other federal, state, and
local requirements, these laws also present yet another administrative burden to
financially-stretched companies and busy drivers.



Expense Control:



At the same time government compliance requirements are
expanding, fleet profitability is on life support. Typical operating margins hover at a
miserly 1- 3 percent, making expense control absolutely critical to a company’s survival.
Trucking companies are looking for ways to drive down costs and remain viable in a still-tough, hyper-competitive
business climate.



Top cost categories are no surprise – fuel, labor, and
vehicle wear and tear.




Fuel costs are always a headache, with diesel costs
commonly comprising 20-25 percent of expenses for a trucking company. Managing this critical
expense category remains a constant challenge. Pricing has stayed volatile, first
soaring and then plummeting in erratic cycles that make financial planning an unpleasant




In terms of labor expense, recruiting and training new
drivers can cost between $5,000 and $8,000 per new employee. With driver turnover of up to
100 percent, companies never seem to stop spending valuable time and money on training
and worker retention programs.




Worker shortages – and the accompanying expense – are
expected to exacerbate as the economy improves.




The vehicle itself also presents cost control issues.
Maintenance expenses – including tire rotation, oil changes, regular servicing – all remain a
challenge to effectively manage and minimize. Bad driver behavior – hard braking, speeding, and
quick acceleration – can result in premature and expensive wear and tear. These behaviors
don’t just hurt the vehicle; they can also jeopardize the safety of the driver and the




Firms that effectively address these two cornerstone
challenges – expense control and regulatory compliance – will be best positioned to succeed
and lead as our economy heals.







It should come as no surprise that today’s mobile
technology can help fleets save money and efficiently address regulatory requirements. Early
on, the potential benefits of wireless were so significant that the transportation sector was
one of the first specific vertical industries U.S. mobile vendors targeted with solutions.
Building on that belief, today’s 6 Frost & Sullivan second- and third-generation portfolios present a wide
array of products and services that ratchet up your ability to reduce expense, boost
efficiency, and proactively address government compliance mandates – all at surprisingly
affordable price points.




It’s time for fleet operators to revisit their mobility
options. During recent years, mobile fleet management applications, mobile devices, and mobile
data networks have all been significantly enhanced in terms of capabilities, cost,
and ease of use:



GPS-Based Mobile Applications




Unlike the complicated and expensive first-generation
solutions, today’s fleet management offerings are designed and priced to be used by all sizes
and types of trucking companies and fleets – long haul, regional, and local. Canny vendors
focus on flexibility by providing software applications in tiered modules that allow you to
augment and grow as needed.



Capabilities can include:




Workforce Management – Real-time visibility into driver
behavior, combined with instant information capture, can enhance productivity and
actually increase driver safety.



– Embedded GPS functionality tracks worker location on
both a real-time and historical basis, and typically refreshes this
information every 15 minutes (or more often, if needed).



– Geo-fencing defines a virtual geographic area and emits
an alert if boundaries are crossed.



–  Wireless time cards provide drivers with the ability to
remotely clock in and out, allowing companies to track the time needed to complete
tasks and to also gather timesheet data.



–  Wireless forms allow drivers to quickly collect data,
enter information directly on their devices, and then transmit that information to
centralized back-office systems.



– Methods of data capture can include image/photo
capture, electronic signatures, RFID and barcode scanning.



Alone or combined, these workforce management
capabilities can maximize productivity and save on fuel costs by reducing the number of stops,
minimizing out-of-route miles, and decreasing the paperwork burden.




Route Optimization and Dispatch – With driver location
easily accessed and analyzed via a Web-based display, dispatchers can communicate
real-time job details and task assignments to specific drivers based on truck location,
transit time required, inventory levels, driver skill set, job type, etc. This ability
translates into more stops with fewer trucks, as well as quick, reliable communication of location and
delivery time windows.




Vehicle Diagnostics – n-vehicle devices collect a wide
range of diagnostic data, including information on hard braking, engine idling,
speeding, RPMs, odometer readings, mileage, and fuel efficiency. These data can be
summarized and retrieved in report form and can act as an early warning system regarding both vehicle
maintenance needs and driver safety performance.




HOS and IFTA Options – Specific Hours of Service
applications and automated International Fuel Tax Agreement filing transmit all
required data from the wireless device to a Web-based report. These optional software packages
not only drastically reduce paperwork for the driver, they also increase the accuracy
of the data being communicated.



Powerful Wireless Data Networks Now-ubiquitous 3G data networks are capable of retrieving
more complex information (moving maps, higher-resolution graphics, etc.) and are
an important piece of the improved technology landscape that supports mobile application
utilization. 4G networks – with even higher data throughput – are now becoming a reality as
wireless carriers create and build out this new generation of infrastructure. 4G promises to
pull together premium capabilities such as IP-based video, location, and




For transportation companies, these powerful broadband
networks can easily upload large files of compliance data, provide high-definition digital
surveillance, and even leverage dynamic video streaming to extend corporate webcasts to
mobile drivers. With true national coverage, next-generation networks can enable
the combination of wireless protocols that work best for a particular driver in a
particular work situation, whether it is mobile, land-mobile radio, paging, RFID, and/or Wi-Fi.



Next-Generation Mobile Devices




Out on the road, drivers need mobile handsets that are
rugged, easy to use, and easy to carry. Both smartphone and ruggedized mobile computing
device vendors are designing new products to better meet these standards.




At one end of the device spectrum, mobile computer
manufacturers Motorola and Intermec have pushed down-market – launching smaller, more
consumerized” versions of their traditional, highly ruggedized devices. These newer
handsets are significantly less expensive than their usual high-end counterparts; however, they
still meet specific (but lower) drop tolerances and temperature/moisture metrics. They also
provide voice, data, GPS navigation, accelerometer, and barcode scanning features that can be
used to keep track of inventory, gather customer signatures, and allow quick driver
locationing. The Intermec® CS40 and Motorola’s ES400 are both excellent examples of these
user-friendly, super-durable, much more affordable next-generation devices.



Traditional smartphones have also been enhanced in terms
of both capability and usability.




Overall, enterprise-oriented smartphones have enlarged and
sharpened their displays, increased their day-to-day durability, enhanced their
processing power, and augmented their security mechanisms. All of these developments allow
drivers to collect data quickly and easily, saving time and delivering more accurate and
actionable information.




A sub-set of smartphone models have even been upgraded to
meet some level of ruggedized specs. For those other phones that still may
seem too fragile to survive a day in a truck, creative vendors like OtterBox are designing
rugged cases that protect popular models from drops, dust, and shock.




Simply put, mobile device capabilities have expanded
while price points have fallen. Add ever more powerful wireless networks and creative software to
this mix – and you have mobile solutions that can help keep your company both
competitive and profitable.








Today’s transportation company has an array of potential
mobility partners at its beck and call. The software application vendor, or VAR,
remains a traditional favorite with larger companies, while small and mid-sized firms may
feel more comfortable working with their favorite wireless carrier. Now that they seem to
have hit on ways to profitably monetize mobility, systems integrators have also become
more involved in this sector. And often the mobile device manufacturer will not only be
closely involved in the solution decision process, but act as the lead in pulling together
the necessary players to address a company’s needs.




Choosing the correct mobility partner(s) is critical to
implementing the correct mobility solution. Criteria to consider when selecting a partner
would include:




Breadth and depth of solution portfolio – There is
something to be said for doing one thing very well; however, the majority of prospective
customers appreciate being given a choice of solutions and approaches. One size most
definitely does not fit all in the transportation industry. The size of your budget, the
technological literacy of your drivers, and the type of data and reporting needs you must satisfy
are factors that can be extremely company-specific. A best-in-class partner will offer you
a selection of alternatives and will also provide you with a solution that can scale to
your company’s changing and growing needs.




Pricing model and flexibility – The major cost components
of a mobile fleet solution are the application software, the mobile hardware and
peripherals, wireless network connectivity, and any required professional services
(typically customization and/or backend integration work). While larger deployments may still be
priced on an annual license basis, the SaaS (Software as a Service) price model is
becoming increasingly popular across all sizes of companies. This hosted delivery model
enables the company to avoid capex spending – hence, making the mobile solution a more
affordable and practical investment.



A SaaS approach has the following features:



– The software application is available on a hosted



– The service is priced and billed on a per-user/vehicle,
per-month basis, and



– Software updates are administered automatically across
all subscribers and companies.




However, even with a hosted SaaS arrangement in place,
customers can balk at the incremental, upfront expense of purchasing or upgrading
hardware (handheld or in-vehicle) and of purchasing professional customization and
integration services. You should look for a partner that is willing to work with other
stakeholders to make the initial required investment more palatable by building some of these
additional expenses into the monthly fee, waiving certain upfront costs, and/or
offering discounts in return for volume or term commitments.




Vertical-specific expertise – Major stakeholders in the
mobility sector have recognized for some time that verticalization opens up markets,
allows the developer and channel to differentiate themselves, and produces lucrative new
revenue streams. As mentioned earlier, the transportation industry has been a favorite target
market of mobile players for some time. Given the unique characteristics and needs of the
trucking market – especially in the area of government regulation – a deep, thorough knowledge
of transportation data requirements is an absolute necessity. Don’t let a vendor
try to force-fit an under-featured, horizontal solution into your fleet.




Industry partnerships – In the U.S. mobile and wireless
sector, top-tier partners can add substantial value and expedite deployments. You
should expect easy access to the following types of support: needs analysis, ROI
analysis, process mapping, solution configuration/integration/customization,
employee training, and implementation management. Look for tier-one relationships and the
ability to assemble an expert team from the following stakeholder segments: wireless
carriers, software developers, device manufacturers, and professional services providers.




Geographic reach – Your own business’s geographic
coverage – whether it’s local, regional, national, or global – will dictate your needs




Post-deployment support capabilities – Mobile solutions are
only effective if they are operating properly and can be relied upon in every
business situation. The more savvy vendors will work closely (and directly) with you during
the initial post-deployment period in order to minimize and address any initial launch
difficulties. When choosing a fleet solution and partner, evaluate the post-deployment
service and support provisions of the vendor and demand high-quality technical coverage. 24×7
contact center support should be a given. Be very clear on who is handling tier one versus
more complex service inquiries.



On-site support should also be considered and defined.




Device and OS agnostic – While multi-platform capabilities
are not particularly applicable to in-vehicle solutions, they are imperative
for mobile handheld applications.




Instead of streamlining down to one agreed-upon mobile
operating system, many of today’s U.S. enterprises have actually been expanding the number
of device and platform types that are being considered for deployment. Whether it is the
BlackBerry, Android, Windows Mobile, or iPhone iOS system, your potential
fleet solution should be able to operate easily on at least two of these alternatives.




Using these selection criteria to choose a mobility
partner can positively influence your ability to reduce costs, increase productivity, enhance
driver and cargo safety, and satisfy government regulations.







Sprint has been a pioneer in the fleet management space
for well over a decade –  assessing potential products, identifying top-tier
partners, and assembling a broad solution portfolio. Sprint’s deep history in this sector has
resulted in an impressive level of experience and expertise.




Current Sprint solutions range from basic truck tracking
services to sophisticated telematics capabilities. Application partners have been
thoroughly vetted and include vendors Xata, TeleNav, Cheetah Software, and Xora.
Depending on a customer’s specific needs, these software apps can automate
regulatory compliance data collection, conduct and report real-time engine diagnostics, create
geo-fences and alerts, and capture barcodes, signatures, and more.




To support these software solutions, Sprint has assembled
an impressive lineup of rugged mobile devices, including:




– Embedded laptops that provide full
functionality – including Web, WAN/LAN, and e-mailaccess – and that can resist dust, moisture, shock, and
other hazards.



– Handheld rugged computers that provide voice, data, GPS
navigation, and barcode scanning all on one device.



– Compact, affordable modems that deliver a high-speed
Internet connection.



– Vehicle-mounted devices that track trucks and
communicate with dispatchers or office personnel.



Major hardware partners include Motorola Solutions, HTC,
Samsung, Sanyo, and RIM.




Sprint recognizes the cost pressures that fleets are
under and has made affordability a key priority. A broad range of price points allows customers
to choose the investment level that works best for their unique situation and needs. For
example, Sprint makes a determined effort to help fleets comply with government regulations
without going broke. Case in point: The April 2010 FMCSA rule on electronic on-board
recorders specifically cited the



Turnpike/Sprint EOBR solution as the most cost-effective
way to satisfy HOS regulations.4




Additionally, per-vehicle/per-month pricing is available
on many of Sprint’s fleet management solutions, and these charges can be included directly on
the customer’s monthly Sprint bill.




Sprint’s fleet expertise, its powerful networks, and the
affordability of its solutions can enable expense savings and support regulatory compliance
across the U.S.





Frost & Sullivan
[email protected]