Construction dominates ‘off-highway vehicle’ telematics market

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Standard Usage:  As an additional boon to construction telematics, the International Organization for Standardization (IOS) has published a mixed-fleet standard that allows users to access data from any machine in their fleet and consolidate it in a single place. At present, the standard applies to earthmoving equipment.

Should it come as a surprise the construction industry has emerged as the leading user of telematics for off-highway vehicles (OHV)? Not exactly. As it has shown with drones, the industry is demonstrating increasing enterprise in developing or adopting new technologies it once might have bypassed, despite potential benefits such applications conferred.

Construction equipment currently accounts for 62.4 percent of the value share of OHVs, a market that additionally includes agricultural and mining vehicles, according to “Off-Highway Vehicle (OHV) Telematics Market: Global Industry Analysis and Opportunity Assessment, 2016–2026,” a study by Valley Cottage, NY-based Future Market Insights (FMI). “Adoption of telematics in the construction industry is higher due to increasing demand from construction equipment rental companies,” FMI indicated in a statement.

In terms of value, the study projects OHV telematics will grow at a compound annual growth rate (CAGR) of 8.9 percent between 2016 and 2026, for reasons that include a reduction in costs in telematics services. The market’s OEM segment is expected to register a CAGR of 9 percent over the same period.

By technology, the global OHV market has been segmented into cellular and satellite, with cellular the preferred technology for service providers due to its ready availability, the report indicates.

Cranes next?: As planned, the ISO mixed-fleet standard will expand to govern other types of construction equipment, including cranes and aerial work platforms.

Telematics isn’t new, but equipment and software suppliers have taken a GPS-based technology originally intended to identify the location of vehicles and incorporated on-board diagnostics and monitoring sensors to aggregate, record, and transmit a vast array of performance data to the operator’s or equipment manufacturer’s website via cellular networks. The stream of real-time data is seemingly endless, from fuel burn rates and fluid consumption to engine and driver performance. The technology also alerts service providers and operators of developing problems. Accordingly, telematics is useful for developing predictive maintenance schedules that improve the performance, productivity, and longevity of both off- and on-road vehicles. In addition to reducing fuel consumption costs, telematics data promote more efficient asset allocation and more accurate scheduling estimates, given users know the amount of time required for equipment to perform a particular task.

“Telematics solutions for the construction industry — specifically mixed-fleet and heavy equipment — are just coming into their own now,” Willy Schlacks, president and cofounder of equipment rental provider EquipmentShare, recently told reporters.

Although FMI has cited lack of standardization as an impediment to growth, the International Organization for Standardization (ISO) in late November published a mixed-fleet telematics standard developed by the Association of Equipment Management Professionals (AEMP) and the Association of Equipment Manufacturers (AEM).

“TELEMATICS SOLUTIONS FOR THE CONSTRUCTION INDUSTRY – SPECIFICALLY MIXED-FLEET AND HEAVY EQUIPMENT – ARE JUST COMING INTO THEIR OWN.”

— Willy Schlacks, president and co-founder of equipment rental provider EquipmentShare

By establishing a common format, the standard allows end users to access telematics data from any machine in their fleet and consolidate the information in a single place, potentially saving time and expenses on job sites or within operations. “The standard allows fleet managers and contractors to aggregate data into one display for easy analysis,” AEMP president Stan Orr indicated in a statement. “The productivity advantages will be cumulative, and the advances to cost effectiveness are expected to be significant.

At present, the standard applies to earthmoving equipment, though data points derived from it are applicable to other types of machinery, whether as a matter of location, operating hours, fuel usage, distance traveled, caution codes, idle time, engine operating data, or a variety of diagnostic codes.

If all goes as planned, the standard will govern use of other types of construction equipment, including cranes and aerial work platforms, Orr told reporters. “Working with AEM, we’ve always maintained that once we got this standard out, we”ll start tackling the next step,” he said. “Ultimately, everything in construction that’s going to be implemented, we’ll want to it part of the standard.”