GPS Based Reporting An Industry Perspective By Thomas Rushfeldt

Introduction Thomas Rushfeldt – SVP Regulatory Compliance Solutions division of Comdata Founder & President of Inter-Tax, Inc. Started in 1994 One of the pioneers in developing GPS-based fuel & mileage reporting Comdata acquired Inter-Tax in 2007 The combined company is the largest provider of GPS-based fuel tax reporting (over 150,000 trucks) The purpose of the presentation is to provide an “Industry perspective” of GPS-based distance & mileage reporting 1. Brief overview of GPS technology 2. GPS technology trends in trucking 3. How GPS data is used in distance & mileage reporting 4. Discussion of required ping frequencies 5. Odometer readings & GPS – how they compare 6. Recommendations regarding auditing of GPS-based reporting systems.

GPS Overview Global Positioning System. A network of satellites that continually transmit coded information, which makes it possible to precisely identify locations on earth by measuring distance from the satellites Originally developed by US Government for military purposes By executive decree in the 1980’s, GPS was made available for civilian use GPS receivers read the signals to determine locations. Transmissions of location back to trucking companies are via separate communication systems –Satellite based –Terrestrial – cellular phone network –Store and direct download

GPS Technology Trends in Trucking 1. The trucking industry was an early adaptor and first started installing GPS devises in the early 1990’s. Data transmission was expensive (satellite based) so data was generally limited to GPS & messaging Since 1994 all heavy duty truck engines have been equipped with an Electronic Control Modules (ECMs), but data was generally not transmitted (due to cost) GPS readings (“pings”) were usually hourly. The market was dominated by Qualcomm 2. In the last few years new technologies have been introduced: Data Store & Forward – results in less lost data Cellular based (terrestrial) data transmission has lowered the cost of moving data –More frequent “pings” –More engine data – including engine odometer readings Lower cost of systems have led to wider deployment Other applications such as: –Turn-by-turn directions –DOT hours-of-service –EOBR – may be required in future

Status of Industry –Currently between ½ to ⅓ of all OTR trucks have some form of GPS (approximately 750,000 trucks) –This includes approximately 70% of fleets over 100 trucks –Almost all trucks will be equipped with GPS in the next 10 years –This will be guaranteed if EOBR’s are required by US DOT GPS Technology Trends in Trucking

Use of GPS in Mileage Reporting Traditional paper trip reports – –Driver-generated & keypunched Dispatch route lines using mileage software Enhanced route lines using fuel purchases & check calls Manually reviewed route lines State line crossing odometer readings from ECM data GPS data with mileage software (24 hour trips) GPS data & trip matching

Use of GPS in Mileage Reporting 24-Hour Trip GPS Route

Use of GPS in Mileage Reporting Trip-Matched GPS Routing

Odometer Readings vs GPS How they compare How should we reconcile between GPS-based mileage and odometer readings? Can/should GPS data replace odometer readings? Could it be that neither is a perfect measure of actual mileage?

Odometer Readings vs GPS How they compare Odometers are a mechanical measure –Count tire rotations –Susceptible to wear and tear / breakdowns –Tire wear alone can cause error of up to 1% –Can be mis-calibrated (adjustment and/or tire size) GPS readings are generally more accurate – but must be interpreted into mileage –Ping frequency can affect accuracy of results –Missing GPS data (gaps) causes errors –“Bad” pings happen –Mileage programs differ in interpreting GPS data (ALK’s PC*Miler, Rand McNally, ProMiles, etc)

GPS Ping Frequency 1.What ping frequency is required to ensure accuracy? Several factors influence ping frequency. 2. Length of Trip Longer trips require less frequent pings One hour pings seem to work fine on average trip lengths over 200 miles Short-haul and local distribution fleets require more frequent pings – 15 minutes recommended 3. Pings at loading and unloading points reduce the need for high ping frequency Empty and ready status messages peg destinations Loaded and departing status messages peg origins

GPS Ping Frequency 4. Comdata’s Inter-Tax division conducted a study of ping frequency vs accuracy Two data sets with both GPS and odometer reading at each ping were tested. Both data sets had average trip lengths of approximately 400 miles Hourly pings resulted in a mean difference of 0.72% between GPS routing and odometer readings 30 minute pings resulted in a mean difference of 0.58% Remember that odometers on average result in approximately 0.5% over reporting due to tire wear Also remember that a consistent over (or under) reporting results in very little impact in fuel tax payments, because the miles are also used in the MPG calculation

Overview of Risks 1. Over the last 10 years Inter-Tax has been involved in almost 200 GPS audits 92% had little or no adjustment for mileage When detailed odometer data was available, normalizing resulted in less than 1% adjustments and resulted in very small dollar adjustments (under $3,000 for average fleet size of tractors) The only exceptions were created by short-haul trips with hourly pings The biggest mileage risk factor is gaps in GPS data 2. The largest audit adjustments remain fuel tracking and documentation

Overview of Risks 3. Best estimates of mileage error factors for various fuel tax methodologies Paper trip reports 0-20% Dispatch routes6-8% Dispatch routes with fuel & check calls4-6% Raw GPS data2-4% GPS data with gap-fill or trip-matching0.5-1% GPS data – (normalized to odometers)0%

Recommendations for GPS Audits 1.Conduct audit in two phases Systems audit –General understanding of process –Detailed understanding of data flows on data edit steps –Verify gap-fill edit steps Sample Audit –Select a limited sample tractors –Verify that the system is being applied consistently –If problems are found-expand sample and develop error factors

Recommendations for GPS Audits 2. Remain flexible when testing against odometer reading Remember odometer readings are not perfect If odometer readings are not available for each trip, look for: –Odometer readings with fuel purchases –Month-end odometer readings –Reading at maintenance intervals Carefully evaluate the source of odometer readings; drivers often “guess” or “round” readings 3. Remember that as newer GPS systems become more widespread, (with odometer readings for each GPS ping) automated normalization will become the standard

Recommendations for GPS Audits 4. Finally, we in Industry strongly counsel against IFTA or IRP amendments that rigidly “force” specific odometer-related rules Auditors are good at evaluating a “good” vs “bad” GPS system Implementing rigid rules in a fast-changing technology environment could be counter-productive to developing better compliance systems

Questions?