Analyst Says ELD Proposal to Spark Telematics Growth
This story appears in the April 14 print edition of Transport Topics.
The Federal Motor Carrier Safety Administration’s new proposal to require electronic logging devices will open the way for the truck telematics industry to expand rapidly, so long as it keeps moving forward without running into further roadblocks, an industry analyst said.
Past delays in the development of an ELD mandate have had a negative effect on trucking’s onboard technology market as some fleets decided to wait for more clarity before making investments, said Clem Driscoll, president of consulting and research firm C.J. Driscoll & Associates.
“The market has been waiting for this,” he said. “Now there’s a proposed set of specs and requirements and a sense of what the schedule will roughly be.”
Technology vendors already are seeing an uptick in interest.
“We’ve seen a surge in inbound leads just in the last couple days since this rulemaking came out from fleets looking to get ahead of the game,” said Brian McLaughlin, president of onboard computer provider PeopleNet.
Driscoll predicted that the telematics market will see gradual growth now that the proposed rule is in place. That growth will ramp up more dramatically as the industry approaches the implementation deadline two years after the final rule, he said.
Driscoll said he envisions the expanded telematics market being split between low-cost products offering basic compliance to new adopters and higher-end platforms designed to enhance fleet efficiency in a variety of ways beyond just e-logs.
Most large truckload carriers already have a system in place, he said, so most of the new adopters will be small and midsize fleets.
During the summer, Driscoll’s firm conducted a survey of more than 500 fleets on their interest in adopting telematics systems.
That survey found that only 15% of the fleets that operate trucks subject to hours-of-service regulations and are not currently using onboard systems said they plan to deploy them prior to the government mandate, he said.
Some of those fleets said they wouldn’t invest in ELDs or onboard computers until the government put forth more specific requirements and a more definite timeframe so they can make a more informed decision.
Others simply said they wouldn’t spend the money until they’re required to do so.
Driscoll estimated that 40% to 50% of trucks in truckload operations in the United States currently have a telematics system in place, with much higher adoption rates among large companies and much lower among small fleets.
Telematics adoption in the private fleet market stands at 30% to 40%, he said.