Think Tank

Industrial IoT Commercial Vehicles Market Racing Past Connected Cars

There is no other IoT (Internet of Things) sector that is covered with such adoration and frequency as the connected car. With a potential market of more than $250 billion, it’s rightfully so. Connected cars are sexy and appealing to a wide range of people so they grab all the headlines while the less attractive, connected commercial vehicle market chugs along quietly in the shadows building up a market value that will exceed $300 billion.

Industrial commercial vehicles like farm equipment, freight trains, big rigs, and construction equipment may well have wheels, but it would be a stretch to call them cars. Hence the introduction of the term “connected commercial vehicles” or CCVs. In just the last couple of years, many commercial vehicles have received upgrades that are having a dramatic impact. By leveraging now-mature telematics and the same set of ubiquitous technologies that make all IoT things a reality (internal sensors, GPS, satellite/cellular/Wi-Fi connectivity, etc.), companies like Trimble, www.trimble.com, John Deere, www.deere.com, Arsenault Associates, now called Dossier Systems, www.dossiersystemsinc.com, and others are providing services that fix many problems that have plagued the industrial sector for years.

For example, by monitoring the sensor streams coming from a dozer, a fault can be detected early, the equipment replaced before it fails, and a lost day’s work can be avoided. The same geo-fencing technology that can prevent a 16-year-old driver from straying too far from home can prevent a million- dollar tower crane from “straying” from the jobsite in the dead of night.

Though the CCV market is as diverse as it is dispersed, we can look at some of the individual sectors to get a picture it is reaching greater heights in terms of ROI (return on investment) and adoption.

Connected Trucking
Trucks deliver nearly 70% of all freight transported in the United States today and there are about 5.6 million tractor-trailers registered for use. It’s no wonder when you think of connected commercial vehicles, big rigs are likely to be the first thing to come to mind. By 2020, more than 35 million of trucks globally will be connected, and nearly 40% of fleet managers feel connected trucks are a “must have.” Connectivity will increase efficiency, speed shipping, and even make drivers safer. All of these things will reduce the cost of moving the freight that drives our economy. And, that’s before autonomous trucking, which will one day upend the entire industry, displacing workers in its wake. The impact on people and the economy at large needs to be taken into serious consideration as autonomy comes upon us.

Commercial Vehicle Telematics
Why is telematics so big? It’s what makes connected vehicles tick. A Markets and Markets report estimates it will be worth over $47 billion by 2020. The commercial telematics market is made up of companies which provide solutions and services for navigational, vehicular communication, safety and security, and similar needs. Companies like HERE, www.here.com, Trimble, Fleetmatics, www.fleetmatics.com, Volvo, www.volvo.com, and others are driving growth in the market. Communications companies are also getting in the telematics game, demonstrated by Verizon’s, www.verizon.com, $2.4 billion acquisition of Telogis. Telematics and location services will help drive everything from location-based marketing to enabling autonomous vehicles, so it will be one of the most lucrative pieces of the CCV space. GPS-based fleet management applications can improve efficiencies in large-scale earth moving operations by an impressive degree, up to 22%, according to one study performed by the Canadian Journal of Civil Engineering.

Connected Agriculture and Farm Equipment
There are less people than ever working in the agriculture business, especially down on the farm. On top of that, the world will need to produce 70% more food in 2050 than it did in 2006 to feed the growing global population, according to the UN Food and Agriculture Organization. Connected farm and agricultural equipment is vital in continuing to find labor efficiencies, conserve resources like soil and water, and produce more food from shrinking farmland as cities and suburban sprawl continue to encroach on its land. Companies like Trimble, John Deere, Caterpillar, www.cat.com, and others provide solutions from connected equipment platforms to smart machines themselves.

You might think farmers would be resistant to technology, but you’d be wrong. The industry is rapidly adopting IoT technologies like sensors placed in fields that allow farmers to obtain detailed maps of topography and resources and variables such as acidity and temperature of the soil. They can even access climate forecasts to predict weather patterns in the coming days and weeks. Farmers already use smartphones to remotely monitor their equipment, crops, and livestock, and obtain stats on their livestock feeding and produce. As efficiency becomes the name of the game in agriculture, the farm will soon be every bit as connected as the city.

The CCV Will Outpace Connected Passenger Cars
The hunger for efficiency and profit will continue to drive the connected commercial vehicle market ahead of its consumer counterpart. Just these three sectors make up a nearly $300 billion opportunity. When you throw in transportation-as-a-service (which Ford, www.ford.com, estimates to be a $5.4 trillion market) and other sectors, the numbers grow exponentially.

While there is a desire for technology in passenger cars, it’s still seen as something of a luxury. And advancement that the connected car industry is banking on—like full autonomy—may even face stiff cultural resistance from consumers. In the industrial sector, there is much less resistance to change in the connected vehicle arena, as productivity and profitability are not a luxury, but a requirement to continued success. As such, the opportunity will stretch to the ends of the earth.

 

About the Author

Brendan O’Brien is chief innovation officer and cofounder at Aria Systems. O’Brien is a thinker on IoT and recurring revenue: enabling new business models, providing multi-dimensional customer choice, and ultimately increasing revenue.

By |2017-06-08T19:20:47+00:006/8/2017|

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