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Issue Date: Vol. 52, No. 2, February 2012, Posted On: 2/22/2012


Vending Fleets: ROI Is Top Issue For Telematics Users; Driver Behavior Is No. 1 Reason For Use


by Staff Reporter
fleet management, vending machine fleet, vending operator, vending route, amusement machine route, jukebox route, telematics, GPS, commercial trucks, route delivery, Donlan, Hertz, telematics ROI, route driver behavior

NORTHBROOK, IL -- Route delivery is a central feature of operators providing merchandise vending, office refreshment, amusement and music services, so every operation depends on its motor vehicle fleet. In 2010, the number of vehicles run by operating companies dipped marginally, to 191,400, as operators continued to consolidate routes and improved scheduling efficiency to offset high fuel costs.

National average gas prices in 2010 saw one of the smallest ranges in recent history. The price for a gallon of gas bottomed out at $2.61 and peaked at $2.94, a spread of only 33¢.

In general, the composition of operator fleets remained the same compared with the year prior. Vans represented 54% of vehicles in use by operators, and non-modified vehicles, principally automobiles used by sales, technical and supervisory personnel, ticked up marginally.

Operators continue to become more sophisticated vehicle purchasers, as the pressing need for improved route productivity puts a premium on vocational vehicles that allow drivers to make the most efficient use of their time. Vending delivery vehicles must be able to haul ever-larger payloads of packaged cold drinks; coffee service route trucks need different organization if they are delivering prewritten orders than if they are run as "rolling stores"; and in amusement and music fleets, the need to carry cigarettes has been supplanted by the need to haul redemption merchandise.

Telematics Consideration By Fleet Size

Most fleets, vending and amusement operations among them, understand the need for a telematics solution and are making the move to implement one if they haven't done so already, according to a recent study of fleet managers by Donlen Corp., a vehicle fleet management firm. The study found that many fleets already using telematics, long-distance transmission of computerized information like GPS, are unsure of their current solutions' ROI. This suggests a need to both understand their reasons for using telematics such as improved driving behavior, route productivity and fuel savings and to integrate and analyze available data that are relevant to those reasons. Fuel cost savings and sustainability are becoming significant factors for considering telematics, and improved driving behavior continues to be the No. 1 reason for implementing a telematics solution.

The report sought to determine how telematics and GPS devices are used, and the future objectives of implementing the technology. While more fleets are making the move to implement telematics, uncertainty about ROI remains a stumbling block for many fleet managers.

Among fleet managers surveyed who are considering a telematics solution, 46% said the ROI was unknown. A similar result (40%) was seen among fleet managers already using telematics solutions.

Respondents were grouped into three segments: fleets using a telematics solution (21% of respondents), fleets considering a telematics solution (34%), and fleets not considering a telematics solution (45%).

Telematics Reasons For Using

Not surprisingly, the number of vehicles in a fleet appeared to be the largest contributing factor to whether or not they use telematics. For fleets with less than 100 vehicles, 80% of the respondents said they are not considering telematics. For fleets with more than 300 vehicles, however, 80% of respondents either said they are considering or already using telematics.

Reasons for not adopting telematics could be attributed to lack of understanding about what telematics solutions can provide. When asked the primary reason for not considering telematics, "no business need" was specified by 69% of the respondents. The cost of telematics was not as much of a factor, with only 17% of respondents giving that reason. The most frequent "other" response was telematics was not being discussed in their organization as a possible solution.

Instead, the top three reasons for implementing telematics indicate a full understanding of the technology's potential: driver behavior, route productivity and fuel savings. The Donlen study found the most significant difference between existing users and those considering telematics was the effect on fuel savings. Among fleets using telematics, fuel savings was the No. 3 reason while it was No. 2 for fleets considering the technology.

The lowest-ranked reason among those already using telematics was sustainability initiatives; only 20% of fleets said they were factors. However, Donlen pointed out that sustainability as a motive for those contemplating telematics was almost double for existing users, or 36%, which clearly suggests an increased awareness or mandate toward sustainability.


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