If 2022 was a tipping point in the digital transformation of physical operations, then the next 12 months could witness an irreversible shift in momentum that permanently alters the way commercial fleets use technology and data.
With vehicles increasingly embedded with sensors and cameras, cloud-connected fleets are constantly generating data that helps organizations improve fuel efficiency, makes driving safer, reduces maintenance costs, protects valuable assets and takes customer service to a whole new level.
But as these early adopters are finding out, there's still so much untapped potential that can be gained from what is regarded as one of the largest and most complex internet of things (IoT) enterprises on the planet.
Data aiding the transition to EVs
One area that continues to generate plenty of interest is the transition from petrol and diesel to electric vehicles (EVs). Despite ongoing supply chain issues, there are encouraging signs that more EVs are due to be delivered in 2023, with fleet managers getting ready to put these new vehicles through their paces in real-world commercial conditions.
And to ensure that businesses understand every detail of their investment, they're connecting EVs to telematics platforms to provide invaluable real-world data needed to manage both electric-only and mixed-fuel fleets. This includes real-time charging status and alerts to combat charge anxiety, EV route planning to make certain that vehicles have enough battery charge to get the job done, and fuel and energy usage reports to ensure that vehicles — be they electric, or plug-in hybrids — are being used effectively.
For those charged with managing this shift in technology, having the right tools — and crucially, the right operational insights — couldn't come soon enough.
In November a new group, Accelerating to Zero (A2Z) Coalition — made up of more than 200 signatories including governments and private sector stakeholders — was launched at COP27 in Sharm El Sheikh to push for the ever-faster transition to EVs.
With the UK and other leading nations on the list of signatories, it's focused on securing even more ambitious commitments to a zero-emission vehicle transition aligned with the Paris Agreement.
Real-time data could lead to per-second insurance charges
While the transition to EVs is one item that is firmly pinned to the agenda for 2023, elsewhere, many operators are still clearly focused on issues that impact the day-to-day running of their business. And top of the list for many is keeping a lid on costs.
While sky-high fuel prices were the story of 2022, one of the biggest overheads fleets continue to face is insurance. According to the insurance research organisation, Consumer Insights, average van insurance premiums in the UK have increased more than 40% since April 2014.
However, the adoption of a more collaborative approach to loss control and risk management between telematics companies, insurance providers and fleets could lead to a whole new approach to the way that insurance works.
Flock is a UK-based insurer that's challenging traditional approaches to insurance. Its real-time, data-driven business model means it prices connected vehicle insurance on a per-second basis, while also giving fleet owners the insights they need to improve safety and drive down premiums.
According to founder and Chief Strategy Officer, Antton Peña, real-time telematics data holds the key to enabling and incentivising safer driving and reducing insurance costs. He wrote recently:
Over time, we can track that data to help businesses to reduce their premiums by implementing safer driving practices.
Customers can leverage insights from their fleet data to support behavioural change among risky drivers and offer better training across the board
At Flock, we believe that insurance should be proactive—i.e. prevent accidents from happening in the first place. Like Samsara, our business is about enabling and incentivising safer, more sustainable driving. Safer customers make fewer claims. This means fewer payouts for us and lower premiums for them.
Facing up to the challenge of data transformation
While telematics and cameras are not new to the insurance industry, proactively addressing risk depending on where, when and how individuals drive — including warning drivers about incidents even before they happen — is new. And it’s a game-changer.
Take UK-based elmo, for example, an electric car subscription company that offers customers the affordability of a traditional lease, with the flexibility of a subscription. Everything — from vehicle hire, maintenance and insurance — is included in one monthly payment, with no deposit and no lengthy contracts.
Using a traditional approach to insurance could have led to punishing premiums for the business. But because elmo uses Samsara’s connected platform across its fleet, this next generation of vehicle leasing business is able to provide real-time data that relates specifically to safety and driver behaviour.
Combined with Flock’s data-driven approach to insurance, it opened the door to a whole new type of business that is able to scale its fleet rapidly while keeping insurance premiums low. More than that, it is an exciting example of what’s possible through the convergence of different ideas and business models made possible by a unified data platform.
The data journey is only just beginning
While the shift to connected operations may be second nature to new businesses that grew up with technology and data, it doesn’t mean more established fleets are at a disadvantage. Far from it.
Any management team with the foresight and willingness to deliver fundamental change by harnessing technology has the potential to transform their business. D & F McCarthy Ltd is a leading wholesaler of fresh fruit and vegetables in East Anglia and supplier to the Royal Household. Although steeped in heritage and tradition that dates back to the 1800s, McCarthys’ took a strategic decision to use technology to address poor operational visibility of its fleet, improved vehicle routing and driver behaviour.
As a result, it has “ushered in an era of digital transformation at McCarthys.” Daniel McCarthy, Director, McCarthys, said:
What started off as a vehicle tracking system has evolved into an end-to-end operations platform, fully integrated with all departments across the business.
Having access to a completely new layer of detail means that we can gain new insights into our customer service, identify trends and patterns, and remove guesswork from decision-making. Access to real-time, meaningful information also enables us to be more agile, react to unforeseen events with confidence, and even predict issues before they arise.
It could be argued that the digital journey this firm — and many like it — are making is no different to the one that retailers faced some 30-odd years ago when someone thought it might be a good idea to sell books online as well as in their shop. It's a similar thought process made by those within the financial services sector who came up with the idea that somehow banking would be better if it was done via a mobile phone rather than queuing in a branch.
Just like many businesses and industries, these firms have taken the necessary steps to change from a traditional business model to one that is powered by data. Now it’s the turn of those organizations that work within physical operations to grasp the opportunities brought about by data. That's their tipping point.