Oil and Gas Contractors Warming up to Using Telematics, Fleet Management Systems
The Information Age
Telematics and fleet management software are great tools for companies sending fleets of equipment across the continent for oil and gas pipeline-related projects, yet many choose not to use the systems available.
Several companies contacted for this story mentioned that they do not use telematics or fleet management systems but added that it is something they foresee getting into in the future. Why is that? The answer could quite possibly lie with mixed fleets, as evidenced by replies from Knoxville, Tennessee-based Phillips & Jordan and Eau Claire, Wisconsin-based Precision Pipeline.
“The challenge in the oil and gas industry and in the equipment industry, especially with a contractor like Phillips & Jordan that has a mixed fleet of various manufacturers, is aggregating data from various telematics sources,” says Steve Rasmussen, founder of TAC Insight, an IT and software services company for the construction industry. Before forming TAC Insight, Rasmussen was chief information officer for Phillips & Jordan and counts his former employers as one of TAC’s largest clients.
Caterpillar equipment comes from the factory installed with its ProductLink software. It’s up to the equipment owner to access the valuable information the telematics software has to offer. One of the largest hurdles to doing so is many contractors have mixed fleets, which requires a system that can take similar data from all of the equipment and aggregate it in one location.
In terms of mixed fleets, the Association of Equipment Manufacturers (AEM) and the Association of Equipment Management Professionals (AEMP) are working together to create a telematics application programming interface standard to provide end-users more OEM equipment data, as well as better access to that data.
In addition to these mixed manufacturer fleets, many companies also have a fleet of over-the-road apportioned trucks, as well as light duty pickup trucks or other forms of employee transport. The data collected for those vehicles differs from the data that the heavy equipment records.
“Telematics is a data capture tool to collect information about an asset and the fleet management software is a more comprehensive package to manage your fleet information, assets you are purchasing, purchase information, preventive maintenance information and buy-sell decision and things like that,” Rasmussen says. “That’s a comprehensive package and telematics is a small little subset, as I see it.”
What is key, Rasmussen says, is finding aggregator software that can take data from all of those pieces and compile it in one enterprise system.
Phillips & Jordan works with TAC Insight to aggregate its telematics data from its equipment across the country into one enterprise fleet management accounting system. Monitoring this information allows the company to accurately deploy its equipment to where it is needed the most.
And there are many options out there from some very well-known companies.
It took Precision Pipeline about a year and half to finally nail down one fleet management software provider that could collate data from the approximately 3,500 pieces of equipment it tracks ranging from pickups to heavy equipment, as well as other smaller pieces of equipment needed in the pipeline construction world.
“In the last year or two, we have really stepped up the whole telematics side of our business. We monitor our utilization, the location, idle times and fault codes. It has now turned into a behavior management tool, since many of our trucks are equipped with software that can help us monitor the drivers of our vehicles,” says Heather Nicolet, fleet administrator for Precision Pipeline.
“We have very mixed fleets and it’s one of our biggest challenges. We have a trucking company, we have our heavy equipment, and we have our pickups and then all of these other items that don’t fall into any category.”
First to the Party
Precision Pipeline was an early adopter to the world of fleet tracking. The company, formed in 2004, started using an aftermarket GPS system on its pickups in 2006. At that time, the technology was not as strong, but in those nearly 10 years the options have evolved to a point where nearly every piece of heavy equipment Precision purchases comes with an OEM system.
Like Precision, St. Louis, Missouri-based Aegion was an early adopter to the world of telematics, installing its first aftermarket system in 2004.
“We use both manufacturer-installed and aftermarket systems,” says Guy Gordon, Certified Equipment Manager (CEM), director of asset management for Aegion. “The information varies depending on what each manufacturer allows to be read. Areas critical to our needs not supplied are fitted with aftermarket connections.”
An Aegion employee uses an LMU4225 telematics system. The equipment tracks vehicle location and diagnostics, including engine speed, oil life, fuel level, seat belt
use and air bag
deployment.
What does Aegion track? Depending on the equipment the company monitors for regulatory compliance, operations productivity, driver behavior, maintenance, safety and cost control. Prior to installing systems on its equipment, Gordon says certain data, like hours, miles and fuel, needed to be inputted manually and other information just was not available.
Nicolet recalls the days before telematics as being painful because critical data needed to be entered by hand. Or in the case of equipment service issues, someone in the field would call and say there was a problem with X piece of equipment. Then a call would have to be placed to a Caterpillar dealer, who would then send a technician to diagnose the issue. Today, fault data is sent directly to the manufacturer and the problem can be documented and assessed remotely.
“It was painful. It still is painful because we are not 100 percent, but we are working toward 100 percent of having all of our equipment with some type of telematic on it, but there is still a lot of paper work that has to be done,” Nicolet says. “The goal is to be paper free. I would say two to three years we might be there. The problem with paper is there is always human error. If you have one piece of paper that is wrong, it can throw off your reporting very quickly.”
When Rasmussen joined Phillips & Jordan, data was inputted over the phone with workers calling in hour meters and job numbers to track the equipment. The company started using telematics about eight years ago. Today, TAC Insight is working with Phillips & Jordan to create methods to capture data from the various manufacturers, bring that data back to its fleet management and accounting system and make the data accessible to people throughout the company.
“I think there are various uses. On the over-the-road vehicles and the apportioned vehicles, we are using it to calculate road miles. For the apportioned vehicles we look at road miles and fuel to calculate taxes among various state entities,” Rasmussen says. “With regard to the Caterpillar, we’re using it more on the fleet manager side to diagnose and look at various information about an asset.”
Phillips & Jordan also employs Android- and iOS-based systems that allow inputting equipment information in the field directly to the enterprise software in real time. In areas where a data signal cannot be made, telematics and fleet management systems are designed to upload as soon as a connection is received.
As with everything in the business world, cost is the biggest hurdle to using the telematics data or purchasing a system to aggregate data from many points.
Cost Benefits
“There are so many avenues where you can save money using your telematics software, just seeing the idle time or the fuel consumption or when those fault codes come up and I can just send that right to my mechanic immediately it saves so much time in the end,” Nicolet says. “It does take time and money to manage that, as well. I could see some of these smaller companies that it might not be as beneficial to them. Since we’ve started, we’ve cut down our idle time by 15 percent. In the end, that cost savings is huge.”
Gordon agrees, “I feel that for those not using telematics, the biggest hurdle is justifying the cost and commitment to the implementation.”
So, do the companies that look at telematics data and use fleet management software have a competitive advantage? All three respondents say yes.
“The investment isn’t justified if it doesn’t pay for itself through safety, improved productivity or cost savings,” Gordon says. “So yes, we feel it provides a competitive advantage. Each company will differ as to the degree of value they achieve depending on commitment.”
Having the fleet management reports have proved helpful for Precision Pipeline when bidding for a project. The clients, Nicolet says, like to see that the drivers and operators are safe and that the equipment is updated and running to peak specifications.
“Any time you can show people that you will save them money or time, they will love it,” she says. “It’s a huge advantage.”
Using telematics has allowed Precision Pipeline to keep its overhead costs down while operating at the highest level of safety possible. Being able to show the clients this information has worked to its advantage in the safety-conscious oil and gas industry.
One advantage for a company like Phillips & Jordan that deploys its equipment across the country and for a variety of jobs is having the data each day to make the most prudent fleet decisions and validate the equipment usage to a customer.
“Phillips & Jordan is very much on the forefront of technology in an industry that typically does not stay on the cutting edge,” he says. “I think down the road it will be more important to validate utilization hours because a lot of things in the oil and gas industry are done on a time and materials (hourly rates) basis and people need to validate the usage hours and these tools can be used for that.”
Next Steps
Where is the use of telematics in the oil and gas industry headed? Will it be more widely accepted? Rasmussen thinks so, especially as the AEM/AEMP standard is approved.
“People have been slow to use telematics and find value in telematics until it can be consumed from a fleet management platform and I think the next evolution and the evolution we are going through at Phillips & Jordan is being able to consume telematics data in one central warehouse from these multiple vendors and multiple telematics platforms,” Rasmussen says. “Once we can figure out how to consume this data better, then I think there is a lot of value in it. What people are trying to figure out now is how do I bring the telematics information into my fleet management platform because that is where the real value will
show up.”
Mike Kezdi is an assistant editor at Benjamin Media Inc. and a contributing staff editor of North American Oil & Gas Pipelines. Contact him at mkezdi@benjaminmedia.com.
Tags: 2015 January Issue, Aegion, Fleet Management Systems, Precision Pipeline, Telematics
