A quick lesson: The fleet telematics systems built around ELD and GPS hardware generate a constant stream of location pings from commercial trucks. That byproduct, multiplied across millions of trucks running 24/7 across the country, has quietly become one of the more interesting sources of “alternative” data in institutional investing.
INRIX aggregates, anonymizes, and structures fleet movement data at scale for applications like urban planning and live traffic monitoring. System2, a boutique consulting firm specializing in data science and alternative data analysis for the investment sector, expands on this with tools that translate billions of individual truck movements into market-moving insights on American industry.
This shift matters for investment firms. A single truck’s route is just noise, but hundreds of those trips mapped against known company locations and tracked over time become a real-time proxy for economic activity that otherwise only appears in quarterly reports.
What the Data Reveal
A few use cases should pique the interest of any analyst or PM on Wall Street:
- Supply chain visibility. An increase in truck traffic in and out of a manufacturing plant or distribution hub can hint at rising production or restocking, before a company reports it. A slowdown can just as easily signal inventory buildup or softening demand. We’ve been able to reveal the entirety of a company’s distribution model by webscraping a map of every location, tracing truck connections between them, and plotting the resulting spiderweb. We can track how the network has shifted over time: whether total vehicle miles traveled have fallen, and whether network density has improved. We could run the same analysis on competitors, giving our clients tools to understand the subsector as a whole.
- Margin modeling. The level of commercial truck activity at a warehouse can provide a signal on quarterly KPIs ahead of an official print. Investors can track not just the monthly output volume moving through a given plant, but the number of unique customers it ships to. Combine estimates across a company’s plants and you get a forecast of aggregate industrial output with only a few days’ lag, well ahead of the Street.
- Private company insight. Traditional financial filings generally aren’t available for private companies, but as long as that company has physical locations, we can track them. GPS data becomes a rare window into competitors, suppliers, or acquisition targets that never had to file with the SEC.
- Trade and tariff impact. Many investors and companies already use import and customs data to understand trade flows. However, when using these sources alone, the trail runs cold as soon as a container enters the country. Adding INRIX’s trucking data into the mix allows us to follow containers all the way to their destinations, with ground-truth info on the shipper, receiver, and contents.
From Novelty to Necessity
Alternative data is now a fixture in most investment firms’ processes, and ELD data has become a powerful part of that toolkit. As with most alternative data, the raw feed is only half the story. It takes a team that can make sense of it, combine it with other datasets, and turn it into a system an analyst can actually use to confirm or challenge a thesis. That’s exactly what System2 does.
Ready to move to a more robust research process by incorporating movement data?
System2 is a boutique data science firm specializing in custom alternative-data research for fundamental investors and corporate clients. You can contact them at info@sstm2.com.