How will the European telematics market change in 2021?
Writing a blog post about the telematics industry trends for 2021, after experiencing the wild ride that 2020 was, seems like a mission impossible because we’ve already seen that the whole world can turn completely upside down within a few week’s time. Suddenly, you have to adapt to a new reality, thus making any guesses on what the next year will bring makes you very cautious. Nevertheless, we’ll try our best to predict some of the trends.
Route planning and optimisation is more important than ever
In a pre-pandemic world, there was a specific segment of companies doing last-mile delivery that required decent route planning and optimisation tools. Many of the companies in this segment had already been in this business for decades, thus had the right solutions in place when the pandemic started. However, throughout the year we saw a lot of businesses going into the last-mile delivery services for their own products, and realising that doing it without any previous experience or proper tools is costly and hard.
The pandemic won’t end in a day or a month – some of the changes it brought to the market are here to stay. We believe that the importance of e-commerce and last-mile delivery will remain as high as it’s now. Because of that, according to our expectations,
route planning and optimisation will become one of the most important solutions that telematics companies can provide in 2021 not only to the last-mile delivery companies but to any fleet that’s involved in transport operations and doesn’t have the necessary tools in place yet.
Events (still) happening mostly online
Last year we laid out a plan for the exhibitions and tradeshows we wanted to participate in 2021. Eventually, we attended none of the offline events. Nevertheless, 2020 brought a large increase in the popularity of the online events – it became the new normal and we saw that a lot of telematics market players were working on hosting their digital events. We, at Mapon, also started to run monthly online partner network meet-ups about specific topics of telematics business, as well as organised a Client’s Day for our end customers here, in Latvia.
If the trade shows and exhibitions will resume in 2021, we expect the audience to be a lot smaller, but a lot more business-oriented than previously.
If you’re ready to take the risks of travelling to a trade show there must be a good business reason to do so for both – the party exhibiting and the party attending the trade show. The role of marketing in attracting visitors to your stand and getting potential partners’ attention will be more important than ever. Bigger market players with well-known brands and bigger marketing budgets will benefit from this. As of Mapon – we’ll definitely continue holding the partner meet-up events that we started in 2020.
Recovery from COVID-19 and the role of telematics
Quite a lot of businesses changed their perspectives during the pandemic. There was a significant boom in e-commerce. According to McKinsey Quarterly, we experienced 10 years of growth within e-commerce in a couple of months. The world saw rapid adoption of technologies like video conferencing and others. People who were struggling with technology took a leap of faith and are now ready to let even more technology into their lives.
This year, the telematics business became more important than ever, offering various solutions on how to digitise daily operations, optimise routes for deliveries and manage transport business remotely.
None of these needs will disappear when the pandemic ends. Even more – we can expect that the role of telematics will increase along with the business and economic recovery plans that governments across the world will put in place.
If we look at some examples, Boris Johnson laid out the plan of the Green industrial revolution which includes quite a few points about converting fleets to electric fleets. Not only will this provide lots of investment into businesses – it’ll also require a lot more data about how electric fleets perform, and this is when the telematics come into play. In our opinion, such steps make perfect sense. We’re not only in a pandemic, but we’re also in a climate crisis that requires a radical solution. Restarting the economy while taking into account the climate crisis is definitely a good strategy that will allow solving two important global issues at the same time.
Migration to 3G or 4G
As in the rest of the world, mobile operators are rolling out network upgrades which will eventually lead to switching off older generation networks.
With so much hype about 5G in the air, the news of 2G and 3G network sunset dates might get lost, but telematics companies should be paying close attention to what’s happening in each of the markets their assets are present.
If we look at the situation in Europe, the strategy is a bit different than in the rest of the world. Most of the countries gradually phase out older technologies, for example, phase out with 2G, then 3G, etc. European operators, on contrary, have mostly taken the strategy to phase out 3G technology at first, and several operators have already switched off their 3G networks in 2020 or have announced that they’ll be shut down in 2021.
The vast majority of telematics devices in Europe are currently using 2G technology and this is one of the reasons why operators are switching off 3G networks first. The problem in Europe lies in the fact that some countries apply a different strategy. For example, Switzerland is switching off its 2G networks, thus telematics devices that operate on 2G all across Europe will lose connectivity when entering Switzerland at some point.
Due to the fact that devices are being installed for the long term (normally a telematics device is operating for 5+ years), it seems that 2021 will be the year when telematics providers should make the decision to move forward with their device upgrades to 4G or any other modern technology that fits the needs of the use case.
Companies resuming their investment projects
In 2020 we saw lots of companies cutting down their new investment projects or halting their operations because of the unclear future outlook for their business. Now that we’re hopefully approaching the end of the pandemic or at least see the hope with vaccination being carried out, we expect the companies to restart their investment projects into fleets and telematics products with a clear goal of ROI.
Reflecting on the last year’s market trend predictions
Looking back at our predictions for 2020, you can expect that we’ve been all wrong due to pandemic, but the reality is that we weren’t that far from what actually happened.
In some countries that we looked at, 2020 has been a year of building a decent infrastructure for electric vehicles. That might be a reason why many people were holding back with their plans on going electric. However, during the last 12 months, we saw a few carsharing companies making the leap of faith and entering the business with electric vehicles only.
Carbon emissions were definitely not the hottest topic if we compare it to the pandemic. Nevertheless, it has still had quite a lot of news coverage due to 2020 being the warmest year on record and we expect that companies will pay even more attention to carbon emissions while returning from the pandemic.
Additional data from the vehicles
Gathering additional data from the vehicles is a never-ending game, and we saw some interesting developments in this area in 2020. For example, video telematics that was previously used mainly as crash reconstruction and bad driver behaviour elimination tool. This year we saw several interesting approaches for using video telematics, like driver coaching based on the live video stream from the cabin and remote control of units via video streaming – the next level of remote work and contactless economy. Seeing this, we expect the role of video telematics to increase in 2021.
2020 has been the year of waste elimination in our lives. We didn’t waste time travelling – instead, we did video conferencing. We didn’t waste time commuting to work – instead, we worked remotely. We didn’t waste time going shopping – we used e-commerce solutions instead.
Not all of the waste elimination will prevail after the pandemic is being taken under control, but the savings we’ve made by changing the way we work and live are so huge that we can put the equation sign to automation.
2020 has been a year like no other – it has brought both challenges and opportunities to all industries, including telematics. We hope that the next year won’t be as turbulent as this and are already looking forward to seeing whether the telematics market will change in the direction we predicted or will new, unexpected trends emerge as we move into 2021.