In my first post, I examined the potential risks posed by fleet adoption of telematics systems. Now it's time to balance the picture with a look at the potential benefits.
Improved CSA Scores
Since 2010, the FMCSA has evaluated carriers and drivers using a model called Compliance, Safety, and Accountability (“CSA”). CSA scores are calculated based on seven criteria: unsafe driving (speeding, reckless driving, etc.); crashes; HOS compliance; vehicle maintenance; use or possession of controlled substances; hazardous materials compliance (leaking containers, improper packaging or placarding, etc.); and driver fitness (proper licensing, compliance with medical and vision requirements, etc.) Scores below certain thresholds can trigger a variety of undesirable consequences, including increased roadside inspections, FMCSA audits and investigations, and, ultimately, suspension or revocation of operating authority. Moreover, at least one court has found CSA scores to be admissible evidence of a carrier’s overall safety.[i] While telematics programs will not directly improve CSA scores, they can help carriers spot and eliminate problematic drivers and practices before their scores are adversely affected.
Lower Insurance Premiums
The prospective safety benefits of telematics are not lost on insurance carriers. While most stop short of offering an explicit discount, carriers with effective telematics programs are likely to see at least some reduction in their premiums. Travelers, for instance, is reportedly offering “discounts as much as 15% off certain types of insurance premiums when devices that monitor vehicle and driver performance are installed.”[ii] Further, from a more long term perspective, telematics have the potential to reduce reportable accidents and the premium increases that go with them.
Better Fuel Economy
Real-time tracking can also help discourage driving behaviors that drive up carriers’ fuel costs like speeding and excessive idling. One early adopter, Ryder, saw a 15% reduction in overall fuel consumption after equipping its fleet with a telematics system.[iii]
More Accurate Evaluations of Liability
Nearly all commercial vehicles are equipped with Heavy Vehicle Event Data Recorders (“HV EDRs”), which capture snapshots of ECM and other data when triggering events, like hard brakes, occur. Evidence from HV EDRs is generally admissible at trial,[iv] and can also provide foundation for accident reconstructions and modeling. However, HV EDRs have very limited recording capacities and are susceptible to damage or destruction in serious accidents. Telematics systems can sidestep these shortcomings, wirelessly transmitting virtually unlimited amounts of data to secure locations far from the vehicles being monitored. Sometimes this data will prove adverse to carriers and support plaintiffs’ claims against them. That said, from a risk management perspective, the promise of earlier and more accurate liability evaluations in many cases is well worth some additional bad evidence in a few. Armed with more complete pictures of how accidents occur, motor carriers and their insurers can better evaluate which claims to settle and which to contest.
The Bottom Line
Like many industries, trucking is contributing an increasing amount of data to the cloud. This trend presents a number of new risks and responsibilities. However, if implemented properly, telematics-enabled devices offer carriers an excellent opportunity to reduce risk and increase efficiency in the years to come.
[i] McLane v. Rich Transport, Inc. (E.D. Ark. 2012) 2012 WL 3996832.