The ROI of Driver and Vehicle Technology
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- Marjorie Ramsey
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1 2015 ANNUAL CONFERENCE In conjunction with ATA s The ROI of Driver and Vehicle Technology Exploring Trucking s Connected World October 18-20, 2015 Philadelphia Marriott Downtown, Philadelphia, PA
2 ATA Antitrust Statement All ATA meetings are held in strict compliance with applicable state and federal laws and ATA s antitrust policies that prohibit the exchange of information among competitors regarding matters pertaining to price, refusals to deal, markets division, tying relationships and other topics which might infringe upon antitrust regulations. No such exchange or discussion will be tolerated during this meeting. As an attendee it is your duty to avoid improper conversations.
3 Today s Panel Alan Korn, Meritor WABCO Conal Deedy, Volvo Trucks Eric Grant, Maverick Transportation Moderator: Carl Kirk, ATA
4 2015 ANNUAL CONFERENCE In conjunction with ATA s The ROI of Driver and Vehicle Technology Exploring Trucking s Connected World Name : Alan Korn Company: Meritor WABCO October 18-20, 2015 Philadelphia Marriott Downtown, Philadelphia, PA
5 Large Truck Fatal Crashes Large truck safety is improving!! NHTSA: Traffic Safety Facts 2013
6 General Transportation Challenges Safety ,719 highway fatalities 3,964 fatalities from large truck crashes 80-90% of fatal crashes caused by human error Mobility 5.5 billion hours of travel delay $121 billion cost of urban congestion Environment 2.9 billion gallons of wasted fuel 56 billion lbs. of additional CO 2
7 Additional Trucking Challenge Motor Carriers Overarching Goal: Moving freight from location A to B in the safest, most efficient manner possible Technologies / automation providing improved safety and efficiency with acceptable paybacks are readily adopted ATTI An Analysis of the Operational Costs of Trucking: 2015 Update
8 Purchasing Drivers for Safety Technologies Return on investment individual fleet analysis Crash reduction, vehicle uptime, driver satisfaction Regulatory requirements societal benefits NHTSA: New vehicle safety standards, has legal authority to mandate retrofits on large trucks FMCSA: operational safety and enforcement
9 Today s (Near Term) Safety Technologies Discrete safety systems designed to ASSIST driver in maintaining control of vehicle and reducing crash risk Driver constantly responsible for at least one of the vehicle s primary control functions (usually steering) 13% 20% 31% 13% X% Initial Point of Impact: Collision with another motor vehicle during transport
10 Stability Control Active safety system designed to reduce likelihood of rollovers and loss of control crashes Integrated with ABS Intervention: de-throttle, application of engine brake, selective application of service brakes Architecture necessary to allow future active safety systems to control brake system
11 Stability Control ROI / Regulatory Influence ROI Crash Type Crashes Fatalities Injuries PDO Rollover Loss of Control 4, ,000 3,545 Total 7, ,324 5,243 ESC predicted to be 40-56% effective preventing rollover crashes and 14% effective preventing loss of control crashes Regulatory Data from ESC Final Rule ESC Final Rule released June 2015 covering tractors and large buses Initial implementation 3 axle tractors: Aug 2017 Buses: June 2018, remaining tractors: August 2019 Straight trucks NOT covered
12 Collision Mitigation System Active braking system designed to reduce / mitigate truck striking rear end collisions Uses forward-looking radar sensor technology to monitor speed / distance to target vehicle Provides audible, visual and haptic rear end collision warnings - Re-engage driver Active braking to provide ACC and assist driver avoiding or mitigating rear end collisions Collision safety system integrated with ABS and stability control
13 Collision Mitigation Slower Moving Target
14 CMS ROI / Regulatory Influence ROI - Truck striking rear end crashes approx 10% of large truck crashes (approx 34,000 in 2013) - UMTRI estimates CMS 44-57% effective in avoiding or mitigating truck striking rear end crashes Ref: UMTRI Report: UMTRI Meritor WABCO OnGuard Fleets report up to 87% reduction in rear end collisions and those that are not prevented are up to 89% less costly Ref: OnGuard Fleet Advisory Council Regulatory - Petition for rulemaking issued to NHTSA in NHTSA expected to make regulatory decision in 2016 Light and heavy vehicles - Joint NHTSA / industry tests planned for November
15 Lane Departure Warning Vision based technology Detects and classifies lane markers Tracks and projects lane ahead of truck Provides audible warnings Unintentional lane drifts Lane change made without turn signal indicator Highway speeds Critical Event Videos
16 LDW ROI / Regulatory Influence ROI LDW system benefits outweigh the costs by a factor of to 4.95 (depending on annual vehicle miles traveled) Payback period of 4 to 12 months. Regulatory FMCSA-RRT NHTSA evaluated LDW performance but as of now, no indication moving toward regulation Mandated in Europe for most large trucks
17 Predictive Video Data Analytics Active Safety Systems System Inputs ABS, ATC, ECS, CMS, LDW, Blind Spot Sensor Inputs Wheel Speed Sensor Brake Apply Pressure Sensor Lateral Accelerometer Steering Angle Sensor Yaw Rate Sensor CMS Radar Sensor LDW Camera Side Sensor Rear Sensor Other Inputs Vehicle Diagnostic Info Vehicle Speed Fuel Economy Accelerator Pedal Position Video Monitoring In-Cab Driver Feedback Camera / Video Capture Video / Data Analysis GPS Data Cellular Data Off-load Driver Input Device Web Portal Infrastructure Data Analytics Driver Management Safety / Driving Efficiency Behavioral Change Vehicle Monitoring Critical Alerts Accident Reconstruction Safety Monitoring Efficiency Monitoring
18 Video Analytics
19 Video Analytics ROI / Regulatory Influence ROI 29% average reduction in vehicle crashes (study group); up to 38% reduction for individual fleets Speed of claims reporting improved by an average of 28% (study group); up to 50% improvement for individual fleets SmartDrive Safety program used for analysis; 16,980 vehicle-years of data Regulatory Aon Risk Services Study 2013 NHTSA plans to require event data recorders on LIGHT VEHICLES Final rule expected August 2016 Strong large truck recommendation from NTSB
20 What About EBS?
21 Future Directions Connected World! Light vehicle V2V NPRM expected in mid 2016 Large truck decision expected by end of 2015 Higher levels of automation with increased safety functions will come Driver cedes control of primary driving functions Must be available to regain control when environmental conditions change Platooning a possible driver
22 Summary Use of heavy truck safety systems increasing - proven ROI Integrated safety system development will continue Significant safety benefits achieved For near term, systems will assist drivers, not replace them Technology changes will be evolutionary, not revolutionary Highly automated large trucks will come when technology fully validated and proven ROI achieved The question is WHEN???
23 Thank You For Your Attention! Name: Alan Korn Company: Meritor WABCO
24 2015 ANNUAL CONFERENCE In conjunction with ATA s The ROI of Driver Technology Exploring Trucking s Connected World Conal Deedy Volvo Trucks October 18-20, 2015 Philadelphia Marriott Downtown, Philadelphia, PA
25 DRIVER TECHNOLOGY AS PRODUCTIVITY TOOLS
26 Data is Ubiquitous In 2008, # things connected to internet exceeded the number of people (6.6 B) Data Consumed Establishing a Data Connection to the truck The GPS Revolution Coverage Dilemma Satellite vs. Terrestrial AMPS, TDMA, CDMA, Satellite Airtime Costs Plummet Data Integration Converting Data into actionable information Establishing Coverage AMPS, Airtime a Data The GPS Dilemma TDMA, Data Costs Connection Revolution Satellite vs. CDMA, Integration Plummet 1990 to the truck Terrestrial 2000 Satellite G 3G 4G Converting Data into actionable information 30 billion+ things connected to Internet 2020 IoT
27 Integration of all the things on trucks has started 20+ ECUs to manage and connect on a truck. Technology provides Connectivity How do you turn it into Productivity for the Driver?
28 Top ROI Connected Services Uptime Fuel Performance Worst Driver vs the Best Driver Safety: Identifying risky drivers, lawsuit mitigation Routing: Reduced Mileage, Increased Deliveries Tracking Detention, Lost Miles Compliance IFTA, HOS, DVIR
29 A Driver s Cab is their Office
30 And the Office Demands are Expanding
31 Electrical
32 Visibility
33 Cost
34 Part
35 Driver Productivity Tools Connectivity is integral to most large operations today Regulatory compliance will increase uptake BYOD integrated with truck data logical next step Lowers hardware cost Allows customization Flexibility Driver retention tool
36 Thank You For Your Attention! Conal Deedy Volvo Trucks
37 2015 ANNUAL CONFERENCE In conjunction with ATA s The ROI of Driver Technology Exploring Trucking s Connected World Name Maverick Transportation October 18-20, 2015 Philadelphia Marriott Downtown, Philadelphia, PA
38 Truck Technology ROI & Decision Process Objectives: Provide perspective on Truck Technology business decisions. Decision team and evaluation process Role that federal regulation plays in now or later implementation Philosophy for implementing new technology and ROI Measurement of cost and savings for technology types
39 Philosophy Helps Guide Decision Making As a company we promote safety and sustainability and doing the right thing. We rely on strong data so we can manage by the numbers. No matter how good our data is, it can always be better. Without exception.
40 Who is involved in truck tech decisions? Tone at the Top VP s / EXECS Truck Technology Team
41 What is the Truck Technology Team? VP - Information Technology (Technical implementation and feasibility) VP - Maintenance (Equipment needs, integration, feasibility) Truck Technology Team VP - Operations (Impact on driver) VP - Safety (Impact to safety)
42 Federal Regulation? Now or Later? Our goal is to make our fleet safer and the roads safer. More times than not that also equates to cost savings. Federal regulation generally does not drive decision making, because we early adopt those measures when it s the right thing to do. What drives our decision philosophy is doing the right thing. We choose to be proactive in safety and often times those initiatives happen to align with Federal regulations coming down the pipeline.
43 Areas of Emphasis When Evaluating Cost Impact Equipment Impact Driver Impact Safety Impact Maverick Internal Philosophy
44 Questions to Evaluate and Measure What are the measureable costs? Cost Impact Cost to purchase new? Estimated residual value? Estimated repair costs per year? How can we measure the savings?
45 Questions to Evaluate and Measure Equipment Impact Ability to integrate with future technologies? Does the technology remain with the truck at trade cycle? Does it work? Can we measure it?
46 Questions to Evaluate and Measure Driver Impact What is the effect on the driver? Does it improve the driver s job? Will it help the driver?
47 Questions to Evaluate and Measure Safety Impact Does it work? Does it respond to a specific need that we have (recurring accident type)? Does it make our driver a better driver?
48 Questions to Evaluate and Measure Maverick Philosophy Is it the right thing to do?
49 Implementing and Planning Test in Small Subset Fleet Measure/Monitor Data Aligns with Expectations Results Measure/Monitor Implement
50 Can ROI be Measured? Efficiency (Fuel) Specs on Unit Weather Age of Equipment Engine type and transmission Region/Terrain Driver experience level Fuel Measurement Variables Application
51 Can ROI be Measured? Equipment Maintenance Cost by Year Model Spikes in Cost and Sources Mileage Band Breakdowns Equipment Measurements CPM by Repair Type Types of Failures Average Age Equipment versus Maintenance Cost
52 Can ROI be Measured? Driver Effect It can be difficult when attacking an issue from multiple fronts and via multiple applications to decide what had the biggest affect positive or negative. Scorecard data (we add specific data for tracking purposes whenever possible to track and effectiveness) Driver Surveys (both automated and via 1 on 1 phone/verbal survey techniques) Driver committees/council feedback for testing and reviews P&L data
53 Can ROI be Measured? In-Cab Efficiency Back Office Efficiencies Starting with the Truck Making Paperwork Easier for the Driver Mobile or in-cab scanning Driver Receipts Goals with in-cab technology. In-Cab Efficiencies Fleet Growth Same # of Non-Driver Personnel
54 Can ROI be Measured? Safety Measurable Non-Measurable (or is it?)
55 Can ROI be Measured? Safety Mindset A Don t Implement Technology, Easy to Measure Can measure what technology would have cost you. Can measure what the accidents that happen cost. Mindset B Implement Technology, Find Ways to Measure Can measure what we paid for technology. Can measure what the accidents cost are. Can try to quantify the cost of accidents we never had.
56 Can ROI be Measured? Safety Prime example of how we can measure what could have been. forward facing cameras. We implemented in a small subset of new truck orders and within 3-6 months, we retrofit the entire fleet. Why did we retrofit so quickly? Because we saw a measurable cost savings in the lack of litigation, cargo claims, physical damage claims, etc that those accidents would have cost us had we not had the cameras. The cameras paid for themselves through the claims that never happened. They also validated some of the other safety features that we had implemented were working. We could watch them.
57 Measurement Example: T-Bone and Ribeye How did we measure? We saw the other safety features at work. Damage to the tractor that never happened, the potentially injured driver, the non-revenue producing time we would have paid that driver, the margin we would have lost on the load, the re-power cost, the physical damage that we didn t incur, the cargo damage that we didn t incur, the replacement cost of the damaged goods hit..it all paid for at least 20 cameras and confirmed other onboard technologies were working for us.
58 Maverick Test We manage by the numbers. But. Not everything can be measured. Bottom line is that it s easier to recommend implementation of new technologies and take on costs with uncertain savings when you expect to continue generating a profit and generating cash flow. We believe in trying new technologies that promote safety and in doing so, believe that more times than not the philosophy is also going to equate to cost savings. Most importantly, when we value our drivers through technologies that will benefit them and keep them safer, we gain a ROI on our # 1 asset.our drivers.
59 Questions?
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