In today’s fast evolving transportation sector, the electronic logging device (ELD) market is bringing remarkable changes in the way commercial fleets and resources are managed. Rapid industrialization worldwide has facilitated a relentless need for logistics services, while advances in manufacturing have allowed novel technologies like ELD to be incorporated within the vehicles.
Although the deployment of trucks, light commercial vans, and buses are usually restricted within national boundaries, the sheer volume of inter-city and state transport activities generate significant demand for these vehicles.
Widespread Influence of Commercial Vehicles on Everyday Life
Where trailer trucks are required to move goods and equipment from factories and warehouses to various destinations across the country, buses provide a viable travel option for consumers. Light commercial vehicles, being one of the prominent application areas for the ELD industry, are utilized for numerous day-to-day operations like parcel delivery, worker transportation, or conveyance for small businesses.
Operational expenses form a key part of any enterprise strategy, and fleet managers always aim to lower the running and maintenance cost of vehicles without compromising on the outcome, gradually opting for the latest technologies to achieve cost efficiency. ELDs are now preferred by an increasing number of logistics providers and mass-transit operators to monitor vehicle efficiency and gather different sets of data. In fact, Global Market Insights Inc. has estimated that the ELD market will surpass annual valuation of US$16 billion by 2025.
Rising demand for telematics will drive the ELD market.
Telematics, in particular, has emerged as a promising solution to address the concerns of fleet owners with respect to both vehicle and driver performance as well as safety. As the transport sector shifts away from being completely paper-based to digitization and adopting IoT devices, implementing telematics will become easier and affordable, reinforcing the global ELD market’s significance in the next few years.
What are the Key Advantages of Telematics Driving ELD Demand?
The American Transportation Research Institute reports that the cost per mile for motor carriers increased to about US$1.69 per in 2017, which was an over 6% rise compared to the previous year. With several approaches being made to curtail unnecessary expenses, deploying ELDs for trucks is one method carriers are using to control vehicle costs. And electronic logging device manufacturers are stepping up to fulfill all requirements of businesses in various ways:
- Diagnostics of vehicles allow for timely repair and maintenance by providing vital engine data and tracing vehicle mileage. Carriers can determine which vehicles are to be urgently looked after, minimizing the probability of delays or breakdowns. Telematics would help to extend life of components through predictive maintenance while significantly improving bottom lines.
- Telematics products offer GPS tracking solutions to ensure complete fleet visibility and effective implementation of schedules. Remote tracking allows carriers to know if packages are delivered at correct locations, whereas estimated time-arrival notifications help cut down ideal time at loading bays.
- Today, various solutions enable companies to monitor driver behavior patterns, such as sudden starts or braking, fast acceleration, improper lane changing, and sharp turns, providing data to help better train drivers. Safe driving also lowers financial loss from cargo damage and maintains a carrier’s brand image.
- Reporting and security are also important applications where telematics can assist businesses avoid unplanned losses. From trailer monitoring through door sensors, to ensuring security of cargo, to temperature monitoring for frozen goods carriers, fleet managers and drivers can efficiently complete their tasks. Reporting of real-time data on the vehicles helps to enhance driver scheduling and vehicle service levels.
What Regulations Compel the Use of Telematics in the EU and U.S.?
United States: The Federal Motor Carrier Safety Administration (FMCSA) had taken an initiative to improve road safety and address road accident concerns by implementing an ELD rule a few years back, applicable to certain categories of vehicles and drivers. According to the regulation, which also sets the design and performance standards for ELDs, commercial drivers mandated to prepare hours-of-service (HOS) records of duty status (RODS) are required to use these devices.
Reportedly, the rule applied to trucks as well as commercial buses, and FMCSA worked with the U.S. Department of Transport to help implement it nationwide. Furthermore, FMCSA-registered and certified ELDs have to be deployed in eligible vehicles and by 2020, all devices in commercial vehicles must be ELD-compliant.
European Union: Countries in the EU have various laws for limiting working hours of drivers. Tachographs are devices that help to monitor if these rules are being followed. The EU had previously implemented a law to encourage the use of recording equipment in commercial vehicles. A new rule introduced by the European Commission requires the use of smart tachographs in vehicles registered for the first time from June 15, 2019.
These devices are aimed at reducing administrative costs, providing better security, and interfacing with navigation systems and other key features. Tachographs would subsequently become a prominent telematics solution in Europe, with carriers and drivers legally required to log their activities.
How Will Automobile Manufacturing’s Growth Influence the ELD Industry?
Admittedly, the auto manufacturing sector has experienced considerable uncertainly in recent years due to changing market dynamics and various steps taken by automakers globally. However, a growing number of small- and medium-sized businesses seem to have raised the demand for commercial vehicles of different sizes and capacities. ELD manufacturers and software providers would unquestionably benefit from increased production activities and the willingness of major carriers to adopt telematics products.
For instance, one of leading carriers from the U.S., XPO Logistics, adopted a telematics product from Trimble for its European Fleet in 2018 after a successful pilot showed telematics to be a highly reliable and versatile solution. With commercial vehicle production reaching over 25.13 million worldwide in 2018, up by around 5.4% compared to 2017, installation of ELDs for trucks could reach unprecedented levels in the next few years.
Global fleet growth can be surmised from recent expansion efforts of carriers, such as Roadrunner Transportation’s plans to acquire over 500 new trucks this year.
What Future Opportunities for Telematics Solutions Will Drive the ELD Market?
In most developed countries, fleet insurance costs can put substantial burden on annual expenditure of businesses and even lower their profit margins. Automotive crashes and injuries can reach up to 50 million cases each year, presenting immense prospects for insurance companies to attract potential customers.
Telematics solutions allow clients to leverage lower premiums or even possible refunds, as insurers get accurate data about driver behavior and vehicle performance, two key factors associated with road accidents. With regard to benefits for the motor insurer, insurance frauds can be uncovered easily, especially through video-based telematics, and new incentives can be offered to customers based on individual as well as fleet performances.
Evidently, the usage-based insurance market, which is expected to surpass US$107 billion in annual revenues by 2024, will fuel the adoption of telematics amongst truck carriers and delivery-service providers that utilize vans.
Electric Trucks and Buses
With the advent of battery-powered electric cars, auto companies are increasingly focusing toward developing viable electric commercial vehicles. Whether it’s Tesla’s all-electric Semi or Volvo’s 7900 electric bus, eco-friendly substitutes for fossil-fuel-based vehicles have already demonstrated the probable future of transport and mobility.
In addition to the existing telematics data provided by ELDs, launching electric trucks will warrant the monitoring of metrics such as battery status and health. Experts believe that integration of technologies like artificial intelligence will certainly transform the ELD industry and improve fleet performance. For electric vehicles, cloud-based and AI-powered telematics could help simplify installation and monitoring of sensors, along with communicating accurate data to fleet managers.
Apparently, telematics would help EVs achieve more journeys between charges and provide information to carriers when making decisions on additional journeys depending on vehicle battery state or remaining charge capacity. Moreover, when a motor carrier aims to slowly migrate away from diesel vehicles, analysis of existing and past telematics data can be used to recommend effective ways to deploy electric trucks and buses throughout operations.
Besides a continuously advancing technological landscape and development of novel products, ELD manufacturers and telematics software providers should expect to witness rising consumption.
Global Emission Targets
As is common knowledge, governments all over the world are crafting ambitious policies to massively reduce the vehicle carbon footprint, and commercial vehicles represent a vital but challenging component of these initiatives.
Investment in electric buses is on the rise globally, as evidenced in the U.S., Europe, and Asian countries such as China, India, Singapore, among others. Telematics and other ELD solutions would help transit operators manage fleets efficiently so that affordable and green mobility could be provided to commuters.
Over the past decade, sales of e-commerce giants like Amazon, Alibaba, and online platforms of major retailers have soared tremendously, creating a need for safe, timely, and cost-effective delivery options. Logistics companies expanded their domestic and international fleets, with the trend still continuing, especially in emerging economies.
As the number of delivery trucks and light commercial vehicles used in goods transportation increases, so will the need for controlling operational and maintenance overheads. The ELD market would play a significant role in driver management, lowering cargo losses, road accidents, and insurance costs through telematics, and ultimately helping to beat profitability targets.
Pankaj Singh is Senior Content Writer for Global Market Insights Inc.