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Telematics Improving Productivity, Saving Carriers Money

New research shows that the switch to telematics-based systems is improving the efficiency of many commercial transportation companies.

Telematics systems involve placing a wireless device — usually a little black box — inside a vehicle (typically, it connects to the diagnostic port). The device can then transmit information about the vehicle and the way it’s being driven to a carrier, insurance company, or other party.


Many trucking companies are impressed with the system. Listowel, Ontario-based Ideal Supply, a wholesale distributor, implemented a subscription-based route optimization service ten years ago to help with the management of its 100-vehicle fleet.

Chris Moon, assistant manager of innvation and technology at Ideal Supply, says implementing a route optimization service caused his company’s sales numbers to grow 100 per cent, with the number of deliveries growing roughly 15 per cent. This, despite the fact that “our fleet hasn’t grown in eight or nine years,” Moon says.

Most of the improvement is related to finding and eliminating overlaps between delivery schedules. “We discovered some [drivers] might be adding seven kilometres a day, or 15 minutes, because they were used to driving particular routes,” Moon says. “If you can save 5 km a day for 100 trucks and multiply that by 255 working days a year — that’s a lot of money.”

Overall, Ideal Supply has seen annual productivity gains of roughly ten per cent but they can be even higher. “Sometimes they’re in the region of 16% to 17% in terms of labour, gas savings, and vehicle maintenance,” Moon adds.

Claude Germain, a managing partner at investment firm Rouge River Capital, which specializes in logistics operations, says he expects telematics technology to continue transforming the commercial transportation market in the near and distant future.

“The whole notion of route optimization is driving less kilometres to achieve the same output,” Germain said.