Transportation management systems (TMS) continue to drive plenty of value for organizations, but it is still not a saturated market. A ResearchandMarkets.com analysis of the global TMS market has found that it will register a compound annual growth rate of 19.13% until 2024 – and for good reason: consultancy ARC Research said a TMS can reduce freight spend by 8.5%.
According to Gartner, companies will spend $1.94 billion on TMS applications by 2022, with Software-as-a-Service products accounting for 65% of that. Clearly, companies expect to leverage TMS even more than they do today. From reduced transportation spend to better management of routing and the automation of freight auditing and payment processes, the modern TMS must do more than record time and place of shipments.
Managed transportation solution (MTS) providers offer a great option for many shippers, as they offer flexible and scalable TMS options as part of their services. Shippers will continue to look for added value and utility from their TMS, and that means further advancements and updates to current systems. An MTS can ensure that a shipper is able to take advantage of these five TMS trends for 2020:
Growing adoption of cloud-based system
Cloud-based systems are all the rage in software these days, and the TMS market is no exception. Beyond the obvious savings of not having to invest in equipment and servers, shippers benefit from the speed at which a cloud-based TMS can react to changing customer demands.
Advanced TMS products, like nVision Global’s Impact TMS, provide a gateway to thousands of data points that become near-real-time answers to complex problems. A cloud-based system helps connect disparate systems from carriers, shippers and customers, and brings that data into a single operation, saving time and money, and improving the operational efficiency of the entire supply chain.
Benefits of a cloud-based TMS include automation of the routing guide, management by exception, real-time insight, visibility into the ordering and shipment process, and improved communication with end customers.
Expect more cloud-based options to come onto the market in 2020, which will further drive innovation of current products as providers look to stay ahead of the competition.
More load tendering automation
Automation is what is driving software development in the freight space, and transportation management systems are quickly adopting this approach. Automation and artificial intelligence have made it easy to build a routing guide that ensures freight moves with the best — not just the cheapest — carrier for the job. Some shippers are reporting that 25% or more of their loads are now being handled completely by their TMS thanks to the data it generates and the built-in business intelligence.
Modern TMS like the Impact TMS collect freight data around the shipment and automatically feed that information into the routing guide, matching the attributes of that specific shipment against the attributes of the carriers in the guide. Shipments are funneled automatically to the best-matched carriers, who can accept them electronically without human input.
This is not as common as some think, but it is quickly becoming a must-have in a TMS. Not all load tendering can be automated, but by reducing the number of loads that require manual processes, a shipper reduces overall cost.
Automation is also not just a step in the load tendering process. Rather, it is a process that permeates the entire supply chain for that shipment. The Impact TMS, for instance, automates alerts and approvals in addition to the rating of carriers and the routing and booking of shipments.
A shift to open-sourced platforms
Once upon a time, software solutions were proprietary. No more. More and more companies are developing open-sourced platforms designed to allow for customization at business speed. Suppliers are finding that building a platform that can quickly integrate with disparate solutions of customers or other supply chain participants reduces overall cost and improves data flow. The more data available within a TMS, the more opportunity for analyzing that data to drive further efficiency and cost reduction. Making the TMS open sourced only added to that opportunity.
The connected truck
As more customers demand real-time track-and-trace capabilities, and vehicles produce more dynamic data from electronic logging devices (ELD) and other on-vehicle systems, the opportunity to connect these data streams to the TMS increases.
ELDs are not just a driving hours compliance tool, they are a gold mine of useful data. The ability of TMS to connect to and acquire this data, which includes GPS location and available drivers’ driving time, enables real-time tracking and allows for accurate estimated time of arrival. Combined with artificial intelligence, it also serves as the backbone for schedule adjustments — whether that is rerouting due to anticipated highway delays or even rescheduling of pickups and deliveries as needed.
Take, for instance, GPS location data. Knowing how long trucks sit at a facility can help identify unusually long detention times that might be a result of inefficient warehouse work. Running a facilities report from the TMS with this data might help identify this.
The connected truck extends beyond the truck itself and will include back-office systems such as the TMS, providing efficiency opportunities not possible just a few years ago.
(It’s still about the) People
Often lost in the quest for greater efficiency is that people still matter. Despite higher levels of automation and cloud-based solutions, people make solutions work. Ensuring that the managed transportation provider has the proper team in place is part of the TMS selection process. According to nVision Global, which has over 500 employees and seven global offices, having a team of dedicated experts adds support that goes beyond the latest software. In nVision Global’s case, its team speaks more than 25 languages, ensuring that no matter where the customer is, someone is ready to help when needed.
No amount of automation is able to completely eliminate the human element involved in moving freight. As such, managed transportation providers that continue to invest in their people, as well as their technology, will remain at the forefront of the industry.