Abstract: An apparatus and method for determining one or more operating characteristics of a vehicle mounted to and movable on a rail. A magnetic strip is mounted to the rail, and is provided with alternating regions of flux and no-flux. The vehicle is provided with a magnetic sensor, which senses the alternating flux regions of the magnetic strip as the vehicle move on the rail and outputs a signal in response thereto. The signals output by the sensor are processed by a micro-controller, to determine the vehicle speed, location and/or displacement from a predetermined point. The system is advantageously employed in any number of applications, such as in factory automation systems, automated material storage and retrieval systems, overhead crane control systems or the like.