Telematics plays a growing role in how logistics, transportation and supply chain businesses manage vehicles, track assets and make data-driven decisions. It combines telecommunications and informatics to capture real-time data from vehicles and equipment, from location and speed to fuel use and engine performance.
As part of a broader shift towards the Internet of Things (IoT), telematics systems are now being integrated into enterprise digital strategies. In fact, global IoT connections are projected to surpass 31 billion by 2030.
The result is more connected operations, with better visibility across fleets and infrastructure, improved safety, and greater operational efficiency.
In this guide, we break down what telematics is, how it works, and how it fits into the wider IoT landscape. We’ll also explore key use cases in fleet management, the benefits for enterprise operations, and what leaders need to know about data security and connectivity at scale.
Telematics refers to the use of telecommunications and digital technologies to monitor, track and transmit information about vehicles and mobile assets. It typically involves a combination of GPS, onboard diagnostics, sensors and cellular networks to collect and send data in real time.
At its simplest, telematics systems provide location tracking for vehicles. But modern applications go much further, capturing engine performance, fuel consumption, braking behaviour, idle time, and even driver safety metrics. This data is transmitted to a central platform, where it can be analysed, visualised and acted upon.
Telematics is most often associated with fleet management, but its use has expanded across industries, from logistics and transport to construction, utilities and public services. It underpins a wide range of services, including:
In the UK, around 44% of fleets now use some form of telematics, and a further 44% are considering adoption within the next three years.
Telematics systems are built on a network of connected technologies that work together to collect, transmit and analyse data from vehicles or equipment in the field. At a high level, a typical telematics setup includes:
For example, when a lorry brakes hard, the telematics system can log the location, driver behaviour and vehicle status, then relay that data back to a central platform within seconds. Over time, patterns can be analysed to improve route planning, safety training, or vehicle servicing schedules.
This process relies heavily on IoT infrastructure. Each connected asset, whether a truck, van or container, becomes a node in a wider network, continuously feeding operational data into the enterprise.
As IoT connectivity improves and edge computing becomes more common, telematics systems are evolving from passive trackers to active decision-support tools, capable of triggering real-time alerts, automating compliance checks, or feeding into broader ERP systems.
Fleet management remains one of the most established and fast-evolving use cases for telematics. From logistics firms and last-mile delivery services to construction and utilities, organisations with mobile assets are using telematics to gain more control, visibility and insight across their operations.
Some of the key applications include:
Live GPS tracking enables managers to monitor the location and status of every vehicle in the fleet. This helps with route optimisation, delivery scheduling, and customer updates, while reducing fuel costs and unplanned downtime.
Telematics systems can track acceleration, braking, cornering and idling, helping to identify risky driving and improve safety through coaching or incentives. In regulated industries, remote monitoring also supports compliance with driver hours and safety standards.
By collecting data from onboard diagnostics, telematics can flag issues before they lead to breakdowns. This allows for condition-based servicing and helps extend the life of vehicles and machinery.
With better visibility into idling, route efficiency and engine performance, fleet operators can reduce fuel waste and lower their carbon footprint. This supports both cost reduction and sustainability goals.
Telematics data helps organisations understand how often and how effectively vehicles are being used. This can inform procurement, redeployment or disposal decisions, and support better long-term investment planning.
For enterprise organisations, the benefits of telematics extend well beyond vehicle tracking. When implemented as part of a broader IoT strategy, telematics systems can deliver measurable gains across safety, efficiency, cost control and sustainability.
Here are some of the key benefits:
By providing real-time visibility into vehicle locations, driver behaviour and fuel usage, telematics allows operations teams to make faster, better-informed decisions. This helps reduce delays, improve delivery accuracy, and optimise resource allocation.
Based on the 2024 Fleet Technology Trends Report Europe:
Fuel is one of the largest operating costs for fleet-based businesses. Telematics helps lower consumption through route optimisation, idling alerts, and improved driver performance. It also reduces maintenance costs by enabling proactive servicing based on vehicle health data.
Fleets using GPS tracking systems report average cost savings of 9% on fuel, 15% on accident-related expenses, and 10% on labour. These savings can quickly scale across large fleets, supporting both operational efficiency and margin improvement.
Access to detailed driving data supports driver training and risk management. Some systems can issue instant alerts or trigger automated responses when unsafe behaviours are detected, helping to reduce accidents and improve duty-of-care standards.
In sectors with strict regulations, telematics provides a digital audit trail of journeys, hours, and maintenance logs. This simplifies compliance with rules such as driver working hours, vehicle inspections and emissions reporting.
Fleet operators are under increasing pressure to meet environmental targets. Telematics enables better monitoring of fuel efficiency and CO₂ output, and provides the data needed to inform fleet electrification strategies.
Telematics is evolving rapidly, shaped by constant advances in IoT solutions. What began as a way to track vehicle locations is becoming a foundational layer in connected operations, particularly in logistics, transportation and supply chain management.
One of the most significant shifts is the move towards edge intelligence. Rather than sending all data to the cloud for processing, modern telematics systems can analyse data at the point of capture, inside the vehicle or asset itself. This enables faster decision-making, such as triggering real-time alerts for unsafe driving or mechanical faults.
At the same time, the rollout of 5G is improving the speed, reliability and security of data transmission. This opens the door to more advanced use cases, such as autonomous fleet operations, video telematics, and real-time integration with other enterprise systems.
Telematics is also playing a key role in decarbonisation and fleet electrification. By providing accurate data on fuel use, journey patterns and vehicle health, it helps organisations plan the shift to electric vehicles (EVs), monitor battery performance, and optimise charging strategies.
While only 22% of fleets currently operate EVs, nearly all are planning for growth, and 75% of those fleets say EVs account for less than 5% of vehicles today, highlighting the scale of transformation still to come.
Looking ahead, the future of telematics will be shaped by deeper integration across the enterprise, from transport and maintenance to finance and compliance. As IoT adoption accelerates, telematics will no longer be a standalone tool, but a core enabler of smarter, more connected operations.
As telematics becomes more integrated with enterprise systems and IoT infrastructure, the need for reliable, scalable and secure connectivity grows. For transformation leaders, choosing the right technology partner is just as important as selecting the right devices or platforms.
At Three Group Solutions, we work with organisations across logistics, transportation and supply chain to design and deploy end-to-end IoT solutions. Our approach to connected fleet infrastructure ensures that data flows securely and efficiently.