Major alterations ahead for the truck telematics landscape

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Sean Kilcarr, Fleet Owner  /  November 16, 2016

Industry expert says Verizon’s acquisition of Telogis and Fleetmatics, combined with the ELD mandate, are “significant market events.”

The “most significant market consolidation” in the history of the truck telematics industry, coupled with what’s expected to be a huge spike in demand due to the electronic logging device (ELD), are going to create “major impact” upon the truck telematics industry, according to Clem Driscoll, president of consulting firm C.J. Driscoll & Associates.

Speaking here at the TU-Automotive Connected Fleets USA conference, Driscoll said that the acquisition of Telogis and Fleetmatics by Verizon Telematics this year will give Verizon a “significant distribution advantage” [near monopoly] in the U.S. in many market segments, with the Fleetmatics acquisition in particular opening up a number of overseas markets to Verizon.

As a result of the $2.4 billion acquisition of Fleetmatics, Driscoll said Verizon now controls 24% of the total U.S. installed base of GPS fleet management systems and 33% of the installed base of local service, delivery, and government fleet systems.

Yet will Verizon continue to operate its own internal fleet telematics division as well as the Telogis and Fleetmatics operations it has acquired as separate independent businesses or integrate them? “That is not known at this time,” Driscoll said. “But as it stands now with those acquisitions, Verizon may actually end up competing with itself in some markets.”

On top of that, he said the impending ELD mandate is expected to add one million or more units to the current U.S. installed base of commercial telematics solutions – equating to a 70% increase in the number of in-cab telematics units in service in the trucking sector.

“The ELD mandate is just going to have a huge impact on the telematics market,” Driscoll noted. “We’re also going to see a lot more smart phones and tablet [computers] used in this space [the trucking industry] to meet the ELD requirements.”

However, he stressed that ELD demand is “limited” right now as many fleets and owner-operators ponder how to comply with the mandate – with many planning to operate without ELDs to “see what happens,” Driscoll said.

Yet by mid to late 2017, demand for ELDs should spike, he noted: “Then things will become very interesting.”

Other trends Driscoll noted in his presentation:

• The asset tracking market for containers and trailers in expected to grow 10% this year but expand by 14% to 15% in 2017 as OEMs begin introducing more “smart trailers” capable of monitoring tire pressure, braking systems, and other parameters.
• The overall asset monitoring market is projected to grow significantly as tracking device prices continue to decline.
• Autonomous vehicle development efforts by car and light truck OEMs indicate that the interaction between human drivers and autonomous systems is going to be a major “pain point” in terms of deploying more self-driving vehicles.
• Ford Motor Co. still plans to a deliver a high volume filly autonomous car by 2021 and not an “interim” model with semi-autonomous functions in part because it believes there are “too many risks” involved in the “hand-over” of driving responsibilities between the vehicle and the operator.
• For some of the same reason, Driscoll believes it is “unlikely” fully autonomous trucks will be operating on U.S. roads within the next 10 to 20 years.