B2B Payments

Compliance — Not ROI — Pushes Tech On Unprepared Fleets

Fleet management has vast opportunities in digitization. Innovations like the Internet of Things (IoT), telematics and mobile payments are primed to disrupt the fleet space, but the industry may not be making use of these tools as much as it perhaps should be.

Technology adoption is at an all-time high for this industry, according to Teletrac Navman’s recent Telematics Benchmark Report: U.S. Edition. The problem is that certain technologies struggle to gain traction within fleet operations. Worse, Teletrac Navman concluded, fleet managers’ return on investment (ROI) for the technologies they did adopt has dropped.

“Fleets must focus on more sophisticated use of telematics features and data for competitive advantage,” Teletrac Navman stated in its announcement of the report.

Last April, the U.S. Federal Motor Carrier Safety Administration (FMCSA) adopted new requirements for fleet use of Electronic Logging Devices (ELDs) in an effort to nix paper logs in the industry. The initiative requires drivers to log Hours of Service electronically, while ELD devices must also have a direct connection with truck engines and support electronic submission of data, according to Verizon Connect.

According to Sid Nair, senior director of transport and compliance at Teletrac Navman, fleet managers appear to be adopting technologies like ELDs merely to maintain compliance.

“We’re seeing more companies invest in telematics, but, unfortunately, many are only doing so to check the compliance box, not making the most of the technology to better their businesses,” Nair said in a statement. “That’s likely due to tech fatigue, especially in the wake of regulations that [demand] new technology, like ELDs.”

Long-term, this “tech fatigue” could prove to be “a crippling hindrance,” he continued, adding that analysts already see evidence of a gap growing between the businesses that embrace fleet technology to boost growth and those merely using these tools to tap into short-lived trends.

On the flip side of fleets’ technology adoption journey, separate research from Comdata and fr8star.com for their 2018 Heavy Haul Freight Carrier Survey, as covered by reports in FleetOwner, found areas of the industry in which a lack of technology adoption has caused persistent issues, from delayed supplier payments to a lack of analysis into trips and loads.

More recently, researchers at Verizon Connect declared that fleet drivers often go above and beyond in their jobs, whether it be working with disaster first responders to coordinate relief efforts or simply aiding a fellow truck driver when broken down on the road. Drivers are already pushing the limits of productivity, the Verizon Connect data suggested, but the struggle to adopt technology in efficient ways suggests fleet back offices aren’t able to do the same. Below, PYMNTS takes a look at some of the latest data in fleet technology adoption.

Seventy-four percent of fleet professionals say ELDs are their top compliance concern, unsurprising, considering the recent regulations around electronic data for the industry, Teletrac Navman found. Despite the requirements, nearly one third of fleet professionals still use paper logs to log hours and other key data about trips, suggesting a signification portion of fleets are non-compliant. “Less risk of compliance violations” topped the list for fleet professionals’ perceived benefits of ELDs, more so than the elimination of manual processes.

Twenty-nine percent of fleet professionals told Teletrac Navman that they use telematics to monitor fuel usage, despite fuel costs serving as the second-largest expense for 36 percent of survey respondents. Researchers noted a 10 percent decline in use of telematics to track maintenance needs, while declines were also seen in use of telematics for speed monitoring and harsh braking since last year.

Sixty-one percent of fleet carriers and drivers that have used an online freight marketplace say it made them more money, Comdata and fr8star.com researchers found. Yet, 41 percent of the professionals that said they haven’t used one indicated a lack of understanding on how they work is the top cause. The majority of professionals that have used such a marketplace to book loads said their experience was better than using traditional brokers.

Forty percent of freight carriers report having been paid late from brokers, while other carrier-broker issues include poor communication and poor information about a load, Comdata and fr8star.com noted. Twenty-nine percent reported having never received payment from a broker, while 28 percent said payment was unfair, signaling significant friction in the broker-to-carrier payment process. For professionals using an online freight marketplace, their number-one requirement is quickly receiving payment. One fifth said pricing transparency is most important.



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