The 2014 Mid-America Truck Show in Louisville and the International Truck, Trailer & Equipment Show in Melbourne have indicated a growing need for next generation telematics technology that is capable of bringing the ‘big data’ trend to the road transport world. But only the IAA Commercial Vehicle Show in Germany, to be held at the end of September, will be able to give us the complete picture, as many a key player will wait until then to demonstrate what they are really capable of.
With less than three months to go until the European showdown, what we do know is that that most of them will focus on three future growth areas – freight tracking, fuel efficiency and fleet management – effectively making telematics the hottest topic of 2014. After all, it’s not for no reason that Melbourne’s Show Director, Clint Hendry, predicted in April, “Given the prevalence of tracking technology on show in Melbourne, it’s safe to say that the telematics trend has finally reached critical mass.”
According to Hendry, next-generation control systems that allow for automatic vehicle identification, instant fleet management, incident detection and hours-of-service control are the dernier cri in Oceania, North America and Europe – not just because they can help transport businesses react to growing compliance pressure, but also because they can assist them in increasing cost transparency.
Fueling the trend is a thriving ecosystem for portable applications and information services in every area of life. New applications for smartphones to increase efficiency and improve transparency are emerging every day and consumers are urging the transport world to catch up.
Knorr-Bremse was one of the first businesses going down that path when it unveiled the iTap system at the 2013 Bauma trade show. iTap was arguably the first attempt to combine the technology available today in an easy-to-handle format. In that sense, the Apple-inspired naming may actually be justified – mostly because the Knorr-Bremse system didn’t just follow the current telematics hype, but tried to build on it.
iTap, the company’s new flagship product in the trailer segment, is based on a smartphone or tablet app and can wirelessly communicate with the TEBS unit on the trailer to control anything from tyre inflation to ride height – allowing the end-user more access to on-board technology than ever before. Combined with more traditional tracking technology, it could make for 100 per cent transparency on every journey.
Be it direct access to the on-board weighing system to ensure full compliance or remote freight monitoring, research has confirmed that rising awareness amongst consumers over the need and importance of transparency will boost demand for tracking technology in 2014-15 and beyond. As a positive side effect, transport businesses could able to leverage live freight monitoring as a new source of income.
According to a report published by US research company IHS*, the market value of OEM-embedded telematics systems in North America will increase from $2.1 billion in 2010 to $6.7 billion in 2018. The Asia-Pacific region is likely to grow into a $4.3 billion business in 2018, from originally $419 million in 2010. Respectively, Western Europe will increase its business to $5.6 billion from $519 million.
Taking into account the aftermarket too, the North America region is expected to take the lead in the coming decade, according to IHS, with a total of $1.1 billion by 2018. In the same period, Asia-Pacific countries are expected to rank second with a total of $1 billion earned, and the Western European market will be as big as $491 million.
Albeit focusing on the automotive industry as a whole, the IHS report can help industry gauge just how dominant the telematics movement will be over the coming half-decade. Fleet management magazine, Automotive Fleet, therefore called next-generation telematics a ‘mega trend’ – stating that commercial vehicle telematics will be key to enhancing fleet efficiency and safety in 2014 and 2015 and “prompt vehicle and equipment specification revisions from the perspective of fleet efficiencies and driver satisfaction”.
The ‘Telematics for Fleet Management Europe’ conference held in Amsterdam in March showed that simplicity is vital in that context. At the conference, Clive Taylor, Director of Fleet Management & Commercial Solutions for Truck, Van & Car at Garmin, said that next-generation solutions needed to be simple and easy to use. “There is a fear of [fleet telematics] because a lot of potential customers are not IT specialists,” he said – pointing out that differentiating between automotive and commercial vehicle applications may acutally be the wrong way to go.
A second obstacle was recently revealed in a report by UK research company Telematics Update**, which claimed that only 20 per cent of the commercial vehicle market is currently using a telematics system of some kind. According to the London-based company, transport businesses feel increasingly overwhelmed by the amount of technology to choose from and are “very reticent” about investing in a product that may be unsuitable for the task at hand or incompatible with existing systems in a fleet.
“If the technology community can establish a dialogue with fleets and understand their requirements, the opportunity to further penetrate this market could be huge,” the company says – urging the telematics community to educate the transport industry on financial drivers, risk management benefits and positive economic impact of telematics.
One reason for the current insecurity in the market is the high merger and acquisition (M&A) activity that has taken place in the fleet telematics industry since 2010. “Of the top 25 global service providers, only four have not done M&A,” Mark Licht, a participating partner in C.J. Driscoll & Associates, said at the Amsterdam telematics conference in March. According to his calculations, some 2.5 million tracked vehicles changed hands in that period, for a total of $3.5 billion.
Germany has been especially active in the M&A field. In late 2013, German transport equipment specialist BPW has acquired fellow German company Funkwerk Eurotelematik, a subsidiary of Funkwerk AG. Based in Ulm, Eurotelematik is a globally active systems and software house specialising in the development and operation of advanced telematics systems for the trucking industry.
With the acquisition of Funkwerk, BPW expanded its existing telematics range after taking over Munich-based telematics specialist Idem in 2012 and is now theoretically able to extract data from both truck and trailer using a single telematics solution, which may be one of the main highlights to be seen in Hanover.
BPW will use the occasion to challenge long-term rival Knorr-Bremse, whose iTap system has already attracted the attention of the OEM scene. But the next-gen telematics race is more than just a duel between German family businesses.
Belgium’s Wabco brand has been involved in the telematics field for quite some time now and is expected to stir up the industry once again in Hanover, and Schmitz Cargobull, which won the European Transport Award for Sustainability in the ‘Telematics’ category last December, will be equally charged for success come September. However, Schmitz Cargobull will have to take on fellow OEM Krone, which won the Telematics Award at the 2012 and 2010 edition of IAA, respectively.
Given that the 2012 edition of the IAA event attracted some 217 entries for the prestigious Award, it’s safe to say the German show will be able to answer at least some of the questions raised in Kentucky and Australia on how to handle big data in a trucking context.
As a result, it is hardly surprising that many a fleet representative will be using the IAA gathering to bring some light into the increasingly complex telematics scene – knowing that the development of a globally connected fleet market has only just begun.