More Technologies Are Ready for the Cab, But Regulatory, Business Hurdles Remain

This story appears in the Jan. 11 print edition of Transport Topics.

Automated vehicle tracking is now accessible to more fleets than ever before, as providers pack the technology into small — but powerful — hardware. However, economic and regulatory concerns are keeping older systems firmly entrenched in the trucking industry.

Many technology providers said they have been able to lower the cost of entry for vehicle-tracking service customers by taking advantage of more powerful cellular phones — those with more computing power and more onboard data-crunching abilities — and the explosive growth of cellular communications networks, over which data can be sent frequently and cheaply.

Other vehicle-tracking systems use a “server-based” model, which relies on a less-powerful onboard computer that sends location data to an off-truck server for processing.

While systems built on “smart phones” — powerful Internet-connected cellular phones with computer-like features such as e-mail and Web browsing — offer the greatest potential savings for carriers, they also face the steepest regulatory hurdles, vendors said.

“Modern smart phones have a lot of horsepower,” enough to stand in for a mobile computer at a fraction of the cost, said Brian McLaughlin, chief operating officer of PeopleNet, Chaska, Minn.

However, such phones, with their tiny screens and small keypads, generally are designed for “desk jockeys and consumers, not the trucking environment,” McLaughlin said. “The biggest hamstring around a smart phone right now is the form factor — and some of the safety aspects.”

Besides their other communications features, smart phones are wired to be tracked by the Global Positioning System. Like onboard computers, smart phones give carriers a single device able to determine its geographic location and transmit that data to shippers and carriers alike.

However, two U.S. senators recently introduced proposals that would crack down on the use of phones in moving vehicles — a measure that would be in addition to a rule promised by the U.S. Department of Transportation that would limit phone use by commercial and other drivers.

What’s more, as of January, 19 states and Washington, D.C., already have enacted texting bans, according to the Governors Highway Safety Association, which is based in Washington, D.C.

Several technology companies, including PeopleNet and market leader Qualcomm Inc., San Diego, have signaled concerns that a federal ban on texting by drivers could pull the rug out from under the market for phone-based systems. These companies also maintained that computer-based systems are inherently safer than phones.

However, the possibility of federal restrictions has not entirely dimmed one of the rising stars of phone-based tracking: In December, Xata Corp., Minneapolis, paid $20 million in cash and stock to buy Turnpike Global Technologies, a Canadian company that makes a “device-based” system that substitutes a smart phone or hand-held computer for a full-fledged onboard computer.

“When you install Turnpike and you already have a phone, there’s no upfront cost — you just get billed monthly,” said Jay Coughlan, Xata’s CEO.

In contrast, traditional computer-based tracking requires a steeper ante, which can be “anywhere from several hundred to several thousand dollars” per unit, Coughlan said.

Even the combined cost of phones, data plans for those phones and the monthly Turnpike service fee is much lower than that, Coughlan said.

Fleets that want the Turnpike tracking system get the proprietary hardware at no charge, but they must pay a monthly subscription fee immediately after installation, Xata said.

Installing Turnpike involves fitting a truck with a device that pulls double-duty as an electronic onboard recorder and a GPS-enabled engine control module interface. A short-range Bluetooth communication network links the Turnpike hardware with a mobile phone, which transmits location and other data to a carrier’s office via a cellular network.

The opportunity cost of cheaper tracking, Coughlan told Transport Topics, is the robust data analysis and business intelligence offered by a tracking system that can process location data with other vehicle-derived data directly from the cab.

Some smart phones, unlike beefier onboard computers, can run only one software application at a time. Moreover, these mobile applications are necessarily less comprehensive than those found on dedicated computers.

Trading business intelligence and data analytics for a lower buy-in might be an appropriate trade-off for smaller carriers, but larger fleets with more sprawling operations are less likely to abandon computer-based tracking, Coughlan said.

Such was the case when Schneider National Inc., Green Bay, Wis., began an effort to fit all its company trucks with the MCP200 Series onboard computer — the most recent offering from Qualcomm.

In terms of tracking services, the MCP200 performs many of the same functions as the OmniTracs system it was designed to replace, Qualcomm said. OmniTracs, which was released in 1988, is Qualcomm’s oldest tracking and communications system.

However, the MCP200 units can deliver more frequent location updates than OmniTracs, which was limited by the satellite communications network over which it sent data. Satellite transmissions are comparatively more expensive than cellular calls and can handle fewer data per transmission.

The MCP200 also can feed digitized information more quickly into some of the software applications Schneider has put in place in its offices, Qualcomm said.

Schneider has said that, among other things, its new software is designed to automate business functions such as fuel tax reporting and driver hours-of-service monitoring — both of which require accurate location data from the truck.

Schneider declined to comment for this story and at press time still was in the process of an information technology overhaul that has been under way for about a year.

Another large truckload fleet, Swift Transportation, Phoenix, also has moved to install Qualcomm’s MCP200. However, such upgrades were the exception rather than the rule in 2009 among Qualcomm customers, the company said.

A Qualcomm executive told TT that, even now, fleets that use the company for tracking services are overwhelmingly using Qualcomm’s older OmniTracs system.

“We’ve still got hundreds of thousands of the older systems in the market,” said Chris Silver, senior manager of product marketing for Qualcomm Enterprise Services. That compares with “tens of thousands” of newer systems.

So, just as price concerns have helped spur the development of alternative tracking systems, those concerns also have kept older systems like OmniTracs in place at some fleets.

For those fleets, the costly, labor-intensive process of replacing the old onboard computers is a daunting prospect. The high price of such a project — in both dollars and training time for employees — has stymied prospects for upgrades at some carriers, Qualcomm said.

“There are some [trucking] companies that operate on the notion that all they need are the basics,” Silver explained. “We’ve been surprised at some of the fleets that aren’t moving to more advanced types of technologies.”

However, a middle ground has emerged between traditional computer-based tracking and the slimmer phone-based systems — a “server-based” configuration.

These systems rely on a scaled-back onboard computer that continuously transmits location data to an off-truck server. That server handles data processing that otherwise would be completed onboard the vehicle.

CarrierWeb, Smyrna, Ga., markets such a system, which the company said it has installed for about 70 customers in the North American trucking industry since 2006.

CarrierWeb’s take on asset tracking involves keeping “an open line” to a vehicle, said Norman Thomas, the company’s vice president of consulting services — and the former chief information officer at truckload carrier U.S. Xpress Enterprises.

“Our competitors open up the line, then send the data, then close the line,” said Thomas. CarrierWeb’s line of communication, on the other hand, is always open, he added.

The constant flow of data is possible because of a patented process that maintains a two-way communications channel to a tracked asset using the GPRS — general packet radio service — cellular network, CarrierWeb said. Location updates on this system are possible as often as once a minute.

At least one customer already is demanding that its trucked shipments be tracked minute-by-minute, CarrierWeb said. That customer, a manufacturer, leverages these near real-time updates to keep its inventory of raw materials as lean as possible.

This “emergency stop-gap inventory” allows the manufacturer to keep its assembly line rolling if a scheduled shipment of raw materials arrives late, Thomas said.

“We deliver to them, in real time, an update every one minute showing them where the truck is and an estimate on the delivery time,” Thomas said.

CarrierWeb’s tracking model compares “favorably,” in terms of price, with competitors PeopleNet and Qualcomm, said John Marous, the company’s CEO.