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Telematics aimed at parcel delivery firms

25 September 2017

Telematics tools are essential for the ecommerce and parcel delivery industries, argues Simon Keam-George, CEO at Enigma Telematics.

In 2016 retail ecommerce sales worldwide amounted to $1.86 trillion and analysts estimate that by 2021 this will reach $4.48 trillion. Nowadays an increasing number of people prefer online shopping to the high street and expect to receive their purchased items in the shortest period of time - sometimes even on the same day.

Of course, the ecommerce market could not report and sustain such fast-paced growth without the support of a strong parcel delivery industry. After all, satisfying digitally connected consumers who are always looking for lower prices, greater convenience and a seamless experience when buying, receiving and returning products is a tough task.

This industry, according to Accenture, has a 9% annual growth rate and is projected to reach a total value of $343 billion globally by 2020.

Competitive edge
But as the parcel delivery industry grows so does the competition, and delivery companies are under increasing pressure to reduce costs, increase efficiency and lower their impact on the environment.

A potential solution for addressing these challenges is presented by telematics. In 2016, according to a survey by RAC Business around 40% of UK businesses were using telematics systems.

Since its emergence 15 years ago, telematics has largely been regarded as an operational tool for recording and monitoring where vehicles are at any given time and how long their journeys have taken. But as its technology becomes more sophisticated, telematics has expanded and become a vital part of effective fleet management.

Through smart devices, Machine-to-Machine sensors and detailed analytics, fleet managers can now access a wealth of data in real-time regarding every vehicle under their control and significantly improve their performance, efficiency and lifetime value.

Big Benefits

Telematics offers considerable business and operational benefits. Solutions can improve delivery times by providing valuable insights regarding traffic, navigation and delivery schedules. In this way fleet managers can analyse how routes and journey timings can be modified to save time and reduce expenditure.

Also, when every driver logs details of each delivery in real-time, fleet managers can instantly rearrange vehicle schedules to pick up unexpected loads or compensate for accidents or breakdowns. The outcome is lower costs generated by journeys made without a load and an increase in overall profitability.

Telematics tools can also provide information on how vehicles are being driven allowing parcel companies to make informed decisions regarding driver training, fuel consumption and accident prevention.

At the same time, fleet managers can analyse each incident, assess the main causes and plan how to avoid the same situation happening again in the future, thus improving health and safety standards and protecting the company against false insurance claims.

There are maintenance advantages as well. Using telematics, delivery companies can monitor the status of vehicles, track component failure rate and proactively manage maintenance schedules to prevent downtime.

With all this data at hand, the business can negotiate lower premiums with its insurance companies and decrease the overall costs of running the fleet.

Looking ahead

The final benefit of telematics, and one that many delivery companies potentially don’t consider in the beginning, is the significant improvement solutions bring to customer satisfaction. As the fleet’s overall performance improves, vehicles are able to make deliveries faster and customer complaints about late deliveries should diminish.

As the technology continues to evolve and customer demands become increasingly sophisticated, the ecommerce market and interlinked parcel delivery industry will likely progressively rely on smart telematics tools to keep up with market trends and stay ahead of the competition.