By Emma Campbell
Fleet management systems could help to reduce the number of road fatalities in the Middle East.
Can fleet management systems help to reduce the number of road fatalities in the Middle East?
Driver safety has become a major talking point for fleet managers in this region, especially with worrying increases in the number of road accidents within the Middle East.
According to governmental statistics, approximately 1000 road deaths were reported in the United Arab Emirates last year, which has increased the pressure on transportation companies to increase their safety standards.
Technology could play an important role in this turnaround, with Fleet Management Systems (FMS) often claiming to reduce the number of accidents on the road by issuing reports for customers whenever one of their drivers has performed a dangerous or erratic manoeuvre.
There are a lot of bad Chinese products in the market, which do not necessarily benefit a company, especially in the long term. - Rani Ghazzawi
In addition, these systems also have the potential to reduce fuel and maintenance costs, lower insurance premiums and extend the lifespan of a vehicle.
However, despite these marketable benefits, it seems the response towards FMS has been relatively lukewarm in the Middle East.
"After starting operations in the United Arab Emirates a few years ago, we noticed that companies liked the concept of fleet management systems, but were sluggish when it came to commitment," explains Naim Hadi, general manager of Trakker Middle East, a pioneer of FMS technology in South Africa, Pakistan, Europe, Australia and Brazil.
"However, it takes time to educate the market. In the United States and Europe, this technology has existed for over 30 years now and it's had a presence in markets such as South Africa for 25 years," he adds.
Another local supplier, Fleet Management Systems International (FMSi), has firsthand experience in this regional reluctance, after establishing its Middle Eastern office over a decade ago in Abu Dhabi. "In the past ten years, the popularity of fleet technology has been limited.
It's not been fully implemented by target markets, such as logistics companies and government agencies," states Rani Ghazzawi, general manager of FMSi.
Since the education process in FMS's regional promotion is ongoing, the local suppliers are keeping optimistic that change is around the corner, with the Middle East having the potential to eventually match its counterparts around the world.
In established markets such as Europe and North America, for example, companies that implement fleet technology can financially benefit from discounts from the insurance industry.
"Education and awareness is essential in developing the regional market for FMS. Companies need to understand the difference between tracking systems and fleet management systems.
The latter is capable of reporting on how the vehicles are actually being used," says Ghazzawi, who claims FMSi can potentially save its customers between 15%-35% in operational costs.
This is a substantial amount for logistics companies, where competition is intense and margins are low.
These savings are fuelled by the ability of fleet management systems to monitor the habits of drivers. For example, an employee who drives erratically and brakes harshly can increase the maintenance costs for brakes and tyres.
In addition, inconsistent acceleration not only affects the fuel consumption, but reduces the lifespan of a vehicle too. And drivers who consistently take longer breaks than allowed by their employees are causing delivery delays, which result in customer dissatisfaction.
However, passing the buck to customers because of their limited product knowledge is overlooking another important influencer in the success of fleet management systems. According to Ghazzawi, the lack of professionalism from certain quarters in the industry has also affected demand.
"Some competitors in the Middle East are operating on a temporary basis, which hurts the market.
Vendors will arrive, open for a couple of months and then close their operations. There is little reliability," he says. "The reason for their failure is the vague nature of the services being offered.
These companies are selling FMS alongside security systems, which means they don't have specialist knowledge in the technology. As a result, a customer's perception is clouded by misleading information.
Another issue, according to Ghazzawi, is the price factor. Certain suppliers are marketing cheaper products that cannot support the operations of customers.
There are a lot of bad Chinese products in the market, which do not necessarily benefit a company, especially in the long term," he adds.
These concerns about regional discrepancies in the choice of suppliers seem commonplace in the fleet technology market.
Mohammed Aljaibaji, Middle East business development manager of Fleet Management Solutions, believes customers should take active measures to ensure their suppliers are legitimate.
"In this region, once companies learn about this product and decide it's a worthwhile investment, they should research the market and pick a supplier that understands their needs," he says.
Training is essential too, because some customers have limited experience with such technology and the type of information and data that is being provided cannot be easily absorbed by their staff. This renders the system very expensive and complicated.
Although a certain amount of scepticism continues to surround this technology, the boom in infrastructure development within the Middle East means the systems cannot be ignored forever.
Indeed, the intensification of growth and competition in the region has helped to increase the significance of FMS.
"As business growth scales up, the natural requirement for operational control also increases and hence fleet management systems have come into focus now," reports Ashish Dass, vice president of 3i-Infotech.
Infrastructural growth expectations are facing various challenges like constraints in the availability of inexpensive human resources, road congestion and the time-critical nature of customer service; all of these are pointing to the need for greater levels of fleet management automation."
Such issues are becoming commonplace, and together with the growing concerns expressed by suppliers, the market could benefit from stricter regulations to be enforced throughout the Middle East.
The industry is going through a dynamic phase and in fact there have been attempts to formalise an official trade body over here.
For example, we could introduce fleet management associations in the region, as they exist in the more developed markets, such as Europe and North America," adds Dass.
"This could help the Middle East to reap a greater level of rewards, such as lower insurance quotes and other savings. Technology costs are also coming down thanks to the global development of the telematics sector and the expansion of GSM networks in the region.
But its not just logistics companies that benefit from the systems, oil and gas companies have actively embraced the technology too. FMSi is the official supplier to multi-national companies like Alkool, Shell, Figaro and Adnoc.
Car rental companies are also heavily reliant on the technology as FMS helps to minimise the number of stolen cars. There are many cases where people will hire a car, drive out the country, never to return again.
"FMS not only protects businesses from risks, but there are a large proportion of individuals in the Middle East purchasing the products too," says Dass.
"The rising number of accidents on the roads has resulted in people becoming more and more anxious about their children's driving habits.
Many fathers are installing the systems into their child's car once they have passed their driving test to ensure that they are driving responsibly on the road and not putting themselves or others in danger.
Although this may seem extreme to many people, its important to remember that safety and protection on the roads is a growing concern in the Middle East and FMS can offer peace of mind to both businesses and families.