The rumblings of game change are distinctly audible in the vehicle and equipment sector, with new partnerships between equipment manufacturers and technology and software specialists being announced on an almost monthly basis.
Such developments reflect the shifting battle lines of the industry and a trend towards hi-tech solutions that could soon see the largest machinery juggernauts enter into an escalating arms race — in terms of both strength of steel and strength of software.
Perhaps the most interesting of these has been the so-called strategic alliance between Caterpillar and a little-known Michigan-based tech firm called Modustri, which is responsible for the HDE Product Suite — an ultrasonic wear-measuring tool integrated with mobile and web apps for conducting inspections in the field.
Caterpillar, already a veteran in the field through its tie up with Trimble for Product Link, now believes that Modustri’s technology — which cuts machine inspection times in half — could save its customers “hundreds of hours and millions of dollars… managing wear parts replacements”.
“The days of being reactive are over,” quipped Doug Hoerr, Caterpillar VP, while Greg Folley, Caterpillar VP and head of its ‘analytics and innovation division’ since April, enthused that “emerging technologies are at the forefront of a revolution in the heavy equipment industry”.
The modest Modustri caught the eye of its Fortune 50 benefactor from humble beginnings working with the giant’s Indiana dealer, MacAllister Machinery.
However, given that Caterpillar today boasts more than 350,000 connected machines, the potential application is huge.
This investment in Modustri forms just part of an ambitious strategy by the giant to not only monitor up-time, but pre-emptively prevent down-time by staying ahead of unforeseen events — when the daily grind of activities causes a breakdown and idles an expensive piece of equipment.
Daimler has also bought into its five-year ally, Zonar Systems, which is responsible for the auto manufacturer’s Detroit Connect tracking technology now implemented in 150,000 US vehicles, and Virtual Technician — a satellite-based diagnostic system to help assess the need for maintenance.
Daimler Trucks is also hoping to develop a parallel telematics solution in Europe based on Nokia’s HERE maps business. The OEM is presently in negotiations with the phone giant over a potential $2.2bn to $4.4bn deal, in partnership with BMW and Audi — though the Germans and the Finns are struggling to arrive at an agreement.
Daimler has declined to reveal how much it spent on the Zonar stake, saying only that it owned less than 25% of the firm. However, it is hard to overestimate the value of such deals when you consider the potential savings for fleets in terms of the minimisation of fuel use and downtime through optimised navigation and maintenance cycles.
Last month’s Big Interview with Andrew Robertson, CEO of AMS, was a case in point. Over a decade and a half, the fleet management firm has racked up fleet contracts for assets worth $1.4bn and tens of thousands of vehicles, including 30,000 vehicles for the Afghan National Police.
“The technology has been one of the keys to our success,” said Roberston, further explaining: “There aren’t many companies that integrate the wrench-turning in the workshop with the technology side.”
In Kazakhstan, where the company is the dealer-distributor for Volvo CE, AMS is likewise working with the OEM to integrate its on-board CareTrack telematics system into a web-based client portal.
At present, the company is supporting 300 vehicles in the country, but it sees “massive potential”, and given the size and scope for activities of the country, tracking and logistics software will be vital.
In April, Komatsu and General Electric also kicked off a data partnership to enable mining companies to find the most efficient routes and navigate faster on mine sites.
However, within the GCC, there are few parties with more to say on the subject of software than Sitech Gulf, a partner for Trimble’s machine systems in the UAE, Oman, Qatar, Bahrain and Kuwait, as well as its other systems for construction, survey and GIS applications, and Caterpillar’s proprietary systems.
“Right now telematics is utilised in the Gulf region in only the most basic of forms — track and trace,” explains John Taylor, COO.
“We see a significant opportunity for more advanced telematics software, like in Europe, the US and Australasia, and integration with existing ERP systems to provide bi-directional collection and dynamic data.” End users are meanwhile becoming more receptive to the potential benefits of telematics and products, such as Vision Link and Product Link, which provide monitoring for fleet managers, Taylor notes.
These systems allow supervisors to keep watch over factors like fuel usage, and to clock idle time — applications that are “already popular among medium and large fleet customers”.
Taylor adds: “We are initially focusing our attention on in-vehicle hardware for light commercial use, but telematics is not just about vehicles; it is also about the best utilisation of skilled peoples’ time — so we are also delivering mobile apps to help manage work-flows over the cloud.”
Collaboration is now occurring between producers and technology specialists at both an informal and formal level, with an example of the former being Genie, which in March pledged to standardise the telematics technology across its AWP and telehandler range for Europe, the Middle East, Africa and Russia by the end of the year.
At the time, Matthew Skipworth, service solutions manager at Terex AWP EMEAR, noted that Genie’s customers “have many brands and many different versions of telematics solutions”, and a common interface would spare them from “being forced into a particular telematics solution”.
Conservative estimates suggest that the global telematics industry was worth $11.2bn in 2014, while forecasts indicate that the market could more than double by 2018 to hit $26.8bn.
However, while in many markets regulation is pushing standards; here in the Middle East, it’s the companies in the commercial vehicles sector that are pressing for the adoption of technology.
UAE distributor of Volvo Trucks, FAMCO, revealed last year that its line-up could become completely telematic within five years, and that it is working with Volvo to fit telematics in Sweden — in another clear indication of the shift in emphasis from ad-hoc adaptation to cost-efficient integration of telematics at the production stage.
Al Shirawi Enterprises, Scania’s distributor for Dubai and the Northern Emirates, is also encouraging the uptake and adoption of Scania’s in-house Ecolution telematics system, which Lars Möller, GM for aftersales at Al Shirawi, enthuses will quickly prove its own value to end users.
MiX Telematics has meanwhile called on commercial vehicle owners and operators, and also trade shows, to become better acquainted with the latest fleet management services, and to avoid merely “searching for the simplest way to reduce fuel costs and improve driver safety”.
“The more the industry uses telematics and fleet management solutions, the better the outcomes at macro and micro levels,” says Brodie von Berg, head of marketing at MiX Telematics ME.
“Shows specialised in automotive products should position fleet management technologies as a crucial part of the sector, to tackle challenges facing vehicles and fleet owners and operators.”
In Oman, MiX Telematics last year signed a deal with Oman’s Public Authority for Electricity and Water (PAEW) to install its systems in 400 of the authority’s trucks, which resulted in a noticeable reduction in accidents within just three months of the initiative’s introduction.
“Unsafe driving, vehicle collisions, speeding, high maintenance costs, and excessive fuel consumption were all areas of concern before PAEW fitted the MiX Telematics systems,” notes Alan Hall, MD for MiX Middle East and Australia.
Of course, the tech sector is also on its way towards replacing drivers altogether with autonomous systems, which are already being deployed to significant success by OEMs like Komatsu.
Adani Mining, the firm behind the $16.5bn Carmichael coal project in Australia, placed an order last month for 55 Komatsu 960E-2 and 930E-4SE autonomous super-large dump trucks, due in the second half of 2016. But Tokyo-based Komatsu first equipped its 930E dump trucks with autonomous systems in 2008, on both a Codelco copper mine in Chile and a Rio Tinto iron mine in Western Australia.
Daimler has meanwhile been testing driverless trucks on the German Autobahn, and assuming a legislative framework can be created quickly, a launch of a full ‘Highway Pilot’ is conceivable by 2025. Google and Delphi are also locked in a fierce battle to be the first to achieve a similar goal within the context of passenger cars.
One of the biggest questions is how such technologies will navigate the legal grey areas that arise with autonomous vehicles and software.
As the population of driverless and software-laden vehicles and heavy equipment rises, so too will driverless accidents and hacking threats. In a recent investigation in the US, a Jeep Cherokee was manipulated into being driven off a Missouri highway — after the researchers managed to disable the vehicle’s engine — and Fiat Chrysler has now had to recall 1.4 million cars and trucks under pressure from the US government.
It will certainly be interesting to see how the major OEMs investing so much time and money into these new technologies will ultimately react to these changing dynamics, but until then, we might marvel at this rise of the machines.
