Telematics and 'Green' Initiatives Surge in Private Truck Fleets, Says PHH FirstFleet Survey; Driver Shortages, Fuel Management, Higher Operating Costs Still Top Concerns for Fleet Managers

Business Wire, August 7, 2006

FORT LAUDERDALE, Fla. -- America's private truck fleets are increasingly employing telematics to help drive down the cost of doing business, according to industry leaders responding to a survey commissioned by PHH FirstFleet. In addition, truck fleets are "going green" in order to implement environmentally sound practices.

PHH FirstFleet is a national provider of asset management, financial, and high technology operational support to the private trucking and transportation industry throughout North America. The survey of private truck fleets was conducted online and during PHH FirstFleet's recent Fleet Management Conference attended by senior fleet operations managers for Fortune 500-level companies.

"Telematics is the trucking industry's newest asset in the fight to curtail soaring prices that impact fleet profit margins. Private truck fleets are using the data available through telematics to understand fuel consumption, the effects of new engine emissions standards, and driver behavior. PHH FirstFleet's mission is to help our customers aggregate and analyze this data to create solutions that reduce operating costs, optimize their truck fleets and educate their drivers to be more effective," says Michael C. Lewis, president & general manager, First Fleet Corporation. In addition, notes Lewis, "Because many of our natural resources are non-renewable and trucking by-products may be detrimental to the environment, we encourage our customers to adopt aggressive 'green' policies that favor recycling and reducing polluting emissions."

Survey results on telematics technology

"Telematics" is a general term used to describe a wide range of devices used in vehicles; most include a combination of Global Positioning System (GPS) and telecommunications technology. In the PHH FirstFleet survey, 60% of the fleet managers said they are adopting the devices to track equipment status and driver activities. Seventy-nine percent (79%) of those surveyed said they were installing the technology in 75%-100% of their fleet, with 42% reporting the main concern was to track delivery times. Thirty-nine percent (39%) of the respondents indicated they wanted to optimize routes and fuel management, and 38% thought their drivers would perform better and drive more responsibly if they knew they were being monitored. Equipment endurance (18%) and security (20%) were lower on the scale as motivation to install telematics.

Implementation of telematics has been a positive experience for a vast majority of the fleet managers who are currently using this technology, with 83% saying that telematics helped improve performance, and 68% saying that telematics became fundamental to the entire operation. Fifty-seven percent (57%) were pleased by the visible return on this financial investment.

The survey posed a question about the reliability of ease of implementation of telematics devices, with 33% saying it was easy while 25% suggested it was difficult and 15% indicated their drivers had technical problems operating them.

Between 50-54% said they would probably install or expand a telematics program in their fleets this year, including the adoption of related policies and procedures on the data collected.

Concern for the environment

"Going Green" turned out to be popular at the fleet managers' companies, with 65% reporting that some type of environmentally conscious initiative had been put in place. The majority use outside contractors to conduct recycling programs and handle waste products, but the investments have not been big and the programs remain very low key, said 59% of the group polled. However, "green" initiatives are on the rise, with 67% reporting plans for additional investments this year.

Fleet managers' other top concerns

In addition to polling the respondents on their knowledge and hands-on experience with telematics and the adoption of corporate "green" policies, the survey asked them to focus on any other critical areas of concern to their companies. The overwhelming response mirrored PHH FirstFleet's spring 2005 survey write-in comments. The topmost concerns included using data to improve fleet performance, escalating operating costs including fuel management, and the fast-shrinking pool of qualified truck drivers.

Fleet managers were outspoken in their written responses on the issues facing fleet management today:

--One retail operations director voiced an interesting comment pertaining to C-level corporate attitudes towards their private fleets: "(There is a) serious lack of management awareness that the fleet is a competitive asset and requires resources to achieve the highest levels of services and cost benefits."

--"Driver shortages coupled with higher fuel costs... a double hit, difficult to overcome. We've implemented pay practices for drivers that have significantly increased retention and instituted fuel hedging policies," said Roy Martin of Advance Auto Parts.

--Murphy-Brown's Brian Reding thought some good public relations might be a solution to the driver shortage problem: "We need to convince people that being a truck driver is a very good and satisfying occupation - show the public a positive image of the industry."