September 1, 2006

Don't touch that dial!

By DC Velocity Staff

News that advanced real-time traffic information services are under development may come as welcome news to commuters tired of scanning the radio dial in search of traffic updates. But a new report from ABI Research says the technology will have its biggest impact not on consumers, but on the logistics world. The study, Real-Time Traffic Information, predicts that if vendors find a way to provide highly accurate road speed and traffic flow information, they will find a huge market in the commercial world, particularly among logistics operators and delivery fleets.

Unlike the navigation systems currently sold to consumers, these more advanced services would include real-time road speed and traffic flow data, which would require connections with considerable bandwidth and the ability to handle complex two-way data transfers. "It remains to be seen whether consumers will be willing to pay for that," says ABI principal analyst Dan Benjamin.

But in the commercial sector, where time is money, the prospects seem more certain. Advance knowledge of which roadways are clogged could prove invaluable to carriers like Federal Express and UPS as well as companies that operate their own fleets. If they can cut a few minutes off each trip and do more intelligent route and schedule planning, these fleets stand to save a great deal of money. ABI notes that shaving 10 minutes of driving per vehicle per day will deliver substantial financial returns.

At this point, these systems still aren't quite ready for prime time. "There are integration issues to be resolved, and the traffic data providers are going to have to deliver on their promise of high-quality information," says Benjamin. "But given that the logistics companies already have (and are paying for) advanced telematics systems, they should be ready to pay a premium for traffic information that will enable them to use their resources to the fullest."

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