This Chapter focuses on understanding the benefits of VDRs based on the hypothetical product profiles (operational concepts) developed in Chapter 2. In addition, estimated costs (engineering development, application programming, and hardware) are developed for these same product concepts. Finally, while return-on-investment calculations are very fleet-specific, and made difficult due to the "soft" nature of both the benefits and costs, the final section of this Chapter presents an overview of the business-case justification that typical fleets use in purchasing VDRs and related products.
To understand costs and benefits associated with single-purpose accident event data recording (EDR), Concept 1 was analyzed. To understand costs and benefits of VDRs targeted at improving operational efficiency (including driver and vehicle monitoring, vehicle tracking, and maintenance management), Concept 3 was selected. Concept 5 was also profiled in order to develop a costs-benefits analysis for a "full-featured" VDR that would record accident event data as well as provide more traditional operational data used by fleets.
To better understand the benefits associated with various configurations and concepts, the following sections address benefits from the perspective of a fleet operator for devices that: (1) could be used to record event data, and (2) could be used to record operational data.
Accident event data recording (or EDRs) have been used for years in the commercial aerospace and railroad industry for crash causation and accident reconstruction analysis. Several light-duty passenger vehicle OEMs have been building EDR capabilities into their airbag control modules, called Sensing and Diagnostic Module (SDM), for several years. The rationale for including such functionality includes:
- Vehicle Design Benefits - The high-resolution crash data files collected from thousands of real-world accidents has provided light-duty manufacturers with valuable data for enhancing occupant safety through improved designs in areas such as crush zone requirements and performance, seatbelt design and operation, seating systems, and steering column and dash design. As importantly, the information collected provides important insights for tailoring and balancing airbag firing algorithms to minimize premature deployment while ensuring proper operation when the severity warrants deployment. Unfortunately, similar data on real-world crashes of commercial vehicles is largely unavailable. It is logical that if commercial vehicles were equipped with EDRs, the data collected during crashes could be leveraged by heavy-duty vehicle manufacturers to improve vehicle safety and design in a manner similar to the improvements demonstrated in the light-duty vehicle industry.
- Warranty Management and Auditing of Customer Use - Light-duty manufactures have also benefited from the data provided by EDRs in helping to understand, monitor, and audit warranty claims related to onboard safety systems. The EDR provides a clear record of whether various safety systems are properly functioning, or whether defects are being detected. For example, an EDR would help provide a high-resolution record of braking applications, including detailed performance of the ABS and/or stability control system to help the vehicle OEM determine if the braking systems (purchased from suppliers) were indeed performing properly.
- Driver Behavior - Various studies show that the presence of EDRs has a preventative effect when parameters such as seat belt use, turn-signal use, horn application, and speed are monitored and are known by the driver to be recorded in the event of an accident.
- Infrastructure Design - Roadway infrastructure engineers and designers can take advantage of aggregated accident event data to better understand how intersection and/or highway designs can be modified to both prevent accidents as well as mitigate severity (through better signaling and signage, road surface design, pavement transitions, etc.).
- Reduction in Litigation Expenses - Plaintiffs, defendants and lawyers can use EDR data to help in litigation resulting from accidents (e.g., in determining who is at fault). In the long term, this will reduce lawsuit costs, which will benefit fleets in the form of reduced premiums for those with EDRs onboard.
VDRs are being used by numerous fleets to help improve operations, train drivers, enhance asset utilization, and improve maintenance efficiencies. Key benefits reported by fleets are listed as follows:
- Equipment Utilization - VDRs, when combined with GPS tracking and long-distance communications systems (satellite or cellular), are leveraged by fleets to better manage their assets (trucks) by maintaining an awareness of truck location, delivery status, estimated time of arrival, and verification of load status and description. Such information can be linked with sophisticated dispatching and load-assignment software in order to optimally match available trucks with shipping requests, thus reducing empty backhauls, increasing driver utilization, and improving scheduling.
- Enhanced Shipper Services - VDRs, when combined with appropriate back-office software, can also provide a record of the date, time, and status of freight delivery and pickup.
- Driver Monitoring - A VDR can record a driver's average speed, over speed and idle time, or engine "sweet spot". The output of the VDR can be used for both training and incentive-based programs that reward optimal (and safe) driving patterns. The VDR can also be programmed to record instances of hard braking, heavy accelerations, ABS activity, and other triggers that signal possible poor driver behavior.
- Maintenance Scheduling - A VDR can be used to help identify maintenance requirements based on actual activity levels rather than on pre-scheduled mileage intervals-thus reducing overall maintenance costs. For example, the VDR could be programmed to record actual braking activity (in terms of frequency of brake applications and associated deceleration rates) in order to develop brake application "histograms," which could then be used to more precisely determine when maintenance is required. Over time, the use of the VDR might allow fleets to avoid unnecessary scheduled inspections while still ensuring safe and effective maintenance of critical safety systems. The VDR could be leveraged in a similar fashion for monitoring of tire pressures (if equipped with a tire pressure monitoring systems) in order to more precisely and efficiently perform tire maintenance. Additionally, the VDR could automatically upload odometer readings, or use built-in "maintenance monitor" features, with factory set maintenance intervals to ensure that required scheduled maintenance activities are indeed completed.
- Fault Diagnosis - VDRs can be used to record various system fault codes as well as important vehicle operating conditions immediately preceding the fault in order to aid in diagnosing the problem. While most ECUs on a commercial vehicle (e.g., ABS, Engine, Dash Controller) will routinely record a fault code specific to that unit, they do not (usually), record operating conditions such as vehicle speed, engine RPM, braking application, and other parameters at the time the fault is recorded. Such data could likely be used to speed diagnosis and repair of the system. In this sense, the VDR is a natural complement to the ECUs controlling various systems on the truck.
- IFTA Fuel Tax Log - VDRs, if equipped with GPS units, can be programmed to automatically log miles accumulated in each State during a given time period, thus facilitating fuel tax calculations and required data submissions to State tax agencies. Vehicle latitude, longitude, and odometer readings can automatically be logged at user-specified intervals.
Our fleet interviews suggest that fleets often purchase and use the VDRs for what they believe is the "killer application" for their particular situation. For example:
- Some fleets offer driver fuel economy incentive programs. They can use the VDR to conveniently monitor fuel use, odometers, hours of operation, and idle time data (as well as other basic trip data such as average speed, time in each gear, etc.), and then download the data at a centralized fueling depot after each trip. One customer reported that the fuel economy incentive program amounted to a 0.2 mpg per vehicle gain, or about $900 per year per vehicle.
- Some fleets noted that the VDR is key to their "reliability-centered maintenance" strategy. These fleets are trying to move away from scheduled maintenance and towards maintenance based on need. The VDR can provide a variety of histogram data (using either hours or miles as the "bin" metric) related to oil temperatures, oil pressure, air system usage (compressor run time), brake applications, steering pump pressures, and/or run time of other auxiliaries. This data can then be gathered and analyzed to help tailor when maintenance and/or replacement of components is really needed.
- Some fleets reported that they purchased the VDRs to help with warranty enforcement. The VDRs can offer "proof" related to the hours and/or miles logged-and the conditions (pressures, temperatures, voltages, etc.) that were experienced surrounding a particular event, or for the average life of the component.
- Some fleets reported using the VDRs to primarily help with evaluating replacement parts from various vendors. For example, friction brakes from different suppliers could be evaluated very accurately using brake application histogram data to determine whether one particular aftermarket supplier was better than the other. Similar comparisons for oil filters, fuel filters, fuel injectors, and other wear items are also facilitated using the VDRs.
- TL fleets that cross several States during regular trips (but whose routing is not always identical) use the VDR to record miles in each particular State. One fleet reported that the VDR saves about $100 per year per truck in costs related to fuel tax logging and reporting.
- Many local and regional fleets (that have high driver turnover) report using the VDRs primarily to provide closer oversight of their drivers. For example, one company reported that its drivers were sometimes late to start work and came back to the depot early. The company was concerned that its drivers were not accurately reporting their location and status throughout the day using a two-way radio. Essentially, the drivers were taking longer to complete trips than the owner thought necessary. VDRs can be programmed to record specific data based on events including time and date stamps for individual trip activities such as engine starts, stops, idle time, power-take-off activation (such as lift gate activity), vehicle over-speeding, and/or ABS braking events. The fleet owner can then use this data to validate (or refute) the driver's adherence to the scheduled routing and deliveries.
- For many smaller and/or cost-conscious fleets, the VDRs, if equipped with GPS capabilities, can be an inexpensive way to track the vehicle's location-and adherence to programmed routes in a "post-trip" fashion. These fleets may not need to have continuous and/or real-time information on vehicle location (that could be obtained using satellite communications systems), but they still want to be able to have a record of where the truck was and when. The VDR can provide a means for doing this without having to pay the monthly service and connection charges associated with satellite communications providers.
In general, both VDR and EDR devices will benefit the commercial vehicle industry and society as a whole, but these benefits will likely be spread across three primary stakeholder groups: (1) fleets, (2) OEMs, and (3) the public sector.
For fleets, benefits will primarily be focused around improving operational efficiency and reducing operational costs. For OEMs, benefits will likely come from reducing liability costs and improving vehicle designs and safety. Public sector stakeholders-such as transportation agencies, law enforcement, and the general public as a whole-will likely benefit from improved vehicle safety; fewer crashes, injuries, and fatalities; and improved inspection capabilities. Exhibit 4.1 shows the possible benefits to each of these stakeholder groups as well as whether or not Concept 1, 3, or 5 will likely lead to a realization of that benefit.
Exhibit 4.1 - Vehicle Data Recorder Benefits
In an effort to better understand likely development and production costs for the concepts outlined in Chapter 2, technical and performance descriptions of each concept were shared with a leading suppler of high-volume custom vehicle electronics for commercial heavy-duty vehicles. The supplier went through the standard development and estimation process, working with both its engineering and sales and pricing team to gain a detailed understanding of the concepts. This supplier then developed an estimated cost analysis for each concept. The team felt that this approach provided a more accurate estimate of the costs broken down into three parts-engineering development costs, application programming costs, and hardware piece costs. In addition, a combined per-unit cost was totaled based on order quantities of over 10,000 units per year supplied to OEMs for installation as part of new vehicle builds. In developing a cost estimate for this concept, a cost precision of ±15 percent was used in the estimation.
It should be noted that this is only the estimate of one vendor and is only intended to provide a preliminary, rough cost estimate for each generalized concept. It is entirely possible that should an OEM choose to source and install such a concept in its vehicles, the cost would vary, perhaps significantly, depending upon quantities, vendor incentives, and manufacturing and component technologies used. In addition, these costs are intended to represent manufacturing and assembly costs, not necessarily retail costs to a customer or fleet.
To review, Concept 1 is a low-cost event triggered data recorder for recording various types of onboard data that might be used to assist with accident reconstruction. It would include provisions for recording vehicle dynamics before, during, and after an event.
Most of the data would come from existing subsystem ECUs and would be available over one or more of the vehicle's communications networks (e.g., J1587, J1939). The EDR would need to contain a three-axis accelerometer (i.e., longitudinal, lateral, vertical). It would also have five digital inputs (on/off) to record service brake, emergency brake, trailer brake, driver seatbelt latch, and passenger seatbelt latch status. Two analog sensor inputs would be available for accelerator and brake pedal position sensors. Because Concept 1 would be designed to record data both before and after an accident event, it will require an internal backup power supply that would enable the EDR to record data for the short period immediately following an accident should the vehicle main battery be disabled. The complete high-level specification can be found in section 2.3.1.
Concept 1's estimated cost per piece would be approximately $260 for quantities over 10,000 units, ± 15 percent. One-time tooling and layout cost for the printed circuit board would be approximately $20,000. Software development cost would likely range between $15,000 to $30,000. Therefore, the amortized per-unit cost for 10,000 units would be approximately $265 each (assuming $25,000 for software development). Of course, this would be cost per unit as sold by a vendor to a vehicle OEM. It is anticipated that there would be additional costs associated with integrating the unit into the vehicle (e.g., mounting, wire harnesses, service and repair manuals) and adding the product to the line card and assembly line. It is likely that an OEM would add a 30- to 50-percent markup to a fleet to cover these costs and provide for warranty expense and profitability.
To review, Concept 3 is a "continuous" VDR that records a variety of operating data that can be used for improving maintenance planning (predictive maintenance) and for monitoring driver performance and operations. The VDR would include a core operational efficiency data set to provide basic measures of vehicle and fleet efficiency. To this end, both summary data (minimums, maximums, averages, cumulative totals) and histogram data (segmented data categorized in various "bins") would be recorded for a variety of channels.
The modest parameter set and storage algorithm requirements result in a VDR with a small storage capacity, and would likely not require fast processing capability as only summary-type data are recorded at a much slower frequency than that of Concept 1 (EDR). Additionally, all of the data elements should be available over one of the vehicle networks (J1587/J1939) from either the engine, transmission, or ABS ECUs. It may be necessary, however, for Concept 3 to have two analog inputs for the accelerator pedal position and brake pedal position if these data are not available over either databus.
The complete high-level specification can be found in section 2.3.3.
Concept 3's estimated cost per piece would be approximately $140 for quantities over 10,000 units, ± 15 percent. One-time tooling and layout cost for the printed circuit board would be approximately $20,000. Software development cost would be from $15,000 to $30,000. Therefore, the amortized per-unit cost for 10,000 units would be approximately $145 each (assuming $25,000 for software development). Of course, this would be cost per unit as sold by a vendor to a vehicle OEM. It is anticipated that there would be additional costs associated with integrating the unit into the vehicle (e.g., mounting, wire harnesses, service and repair manuals) and adding the product to the line card and assembly line. It is likely that an OEM would add a 30- to 50-percent markup to a fleet to cover these costs and for profitability.
To review, Concept 5 is a "full-featured" VDR and EDR, and combines advanced accident reconstruction capabilities with advanced operational efficiency and driver monitoring capabilities. It is not only designed to record high-resolution data before, during, and after an accident event, but also to continuously record histogram and summary data to improve fleet efficiency, improve fleet maintenance, and monitor driver performance. This recorder would, therefore, require several internal sensors (e.g., three-axis accelerometer, yaw rate, tilt/roll angle) and several inputs for additional sensors not normally found on a commercial vehicle (e.g., steering wheel position, tire pressure monitoring, and vehicle/axle load). Additionally, this recorder would record the status of most vehicle subsystems (e.g., lights, retarder, inertia brake, traction control, stability control, airbag).
The recorder would record an extensive amount of data and would, therefore, require significant storage capacity. Additionally, because it would be recording data at a high frequency before and after an event trigger, it will require a fast data-processing capability and an internal backup power supply. The extensive list of data elements means that Concept 5 would require several analog (six) and digital (five) inputs to record data that is not available on the vehicle's databuses (J1587/J1939).
The complete high-level specification can be found in section 2.3.5.
Concept 5's estimated cost per piece would be approximately $450 for quantities over 10,000 units, ± 15 percent. One-time tooling and layout cost for the printed circuit board would be approximately $20,000. Software development cost would be from $20,000 to $40,000. Therefore, the amortized per-unit cost for 10,000 units would be approximately $460 each (assuming $40,000 for software development). Of course, this would be cost per unit as sold by a vendor to a vehicle OEM. It is anticipated that there would be additional costs associated with integrating the unit into the vehicle (e.g., mounting, wire harnesses, service and repair manuals) and adding the product to the line card and assembly line. It is likely that an OEM would add a 30- to 50- percent markup to a fleet to cover these costs and for profitability.
In conducting this study, it became clear that return-on-investment calculations for VDRs (from the fleet operator's perspective) are challenging due to:
- Benefits are often defined in terms of increased productivity, efficiency, competitiveness and/or improved safety. All of these measures will vary depending on a particular fleet's situation-and are very hard to quantify even for a specific fleet's situation.
- Costs are also difficult to obtain from commercial suppliers of VDR equipment and services. The costs are often embedded (or bundled) within a vehicle price and/or within a larger telematic service offering. More importantly, the market price of some of the products and services reviewed in earlier chapters is not necessarily indicative of cost. The commercial vehicle telematics, communications, and VDR industry is in many ways in its infancy. As such, suppliers with innovative ideas that improve a fleet's competitiveness may well be able to command premium prices that are not cost-based.
While costs and benefits are difficult to quantify, VDRs and related products and services are nevertheless enjoying market success. Although market penetration data is generally not available (or is closely guarded by suppliers), nearly all vendors contacted reported consistent increases in annual sales volumes. This includes various satellite and terrestrial-based tracking services and upgraded or enhanced recording functionality embedded within the engine control modules. Standalone VDRs and/or EDRs, however, do not appear to be enjoying the same level of success. It would appear, at least anecdotally, that the functionality that might typically be available with a VDR is being incorporated directly into satellite and/or terrestrial tracking systems. Alternatively, if a fleet does not wish to (or cannot afford) such systems (which require a monthly fee), but still desires some vehicle monitoring capability, then it opts for the functionality that can be provided by the engine OEMs within the engine ECUs (see Appendix B). Thus, the standalone VDR and EDR market seems to be waning.
However, fleet managers need for information related to the driver, vehicle health, location, and load status continues to grow. Interviews with industry stakeholders suggest that the information provided by "conventional" fleet tracking and management services is now just "part of the cost of doing business and staying competitive." As a simple example, some truck load companies cannot calculate a straightforward return-on-investment in their onboard tracking and communications systems, but shippers (their customers) may have become accustomed to knowing the exact status of their shipments-and therefore a trucking company simply needs this capability to be competitive. For example, in a recent survey of over 300 leading freight industry executives administered by eyefortransport magazine, respondents were asked to list, in order of priority, the technology investments that they have recently made or intend to make in the near future. Partial results of the survey are shown in Exhibit 4.2 below.
Exhibit 4.2 - Freight Industry Technology Priorities
As can be seen in the exhibit, there appears to be considerable interest in the commercial freight community in technologies related to event management and in wireless applications in fleets.
In summary, while return-on-investment calculations for devices and systems that incorporate VDR and EDR functionality are difficult to quantify, fleets nonetheless appear interested and willing to invest in such technology.
National Highway Transportation Safety Administration, Event Data Recorders - Summary of Findings, NHTSA EDR Working Group. NHTSA-99-5218-9, Washington, DC, 2001.