Enable the Next-Generation Goods Transportation Management System
The time for transportation and logistics companies to modernize their TMS solutions is now.
- High technical debt, inefficient processes like manual paper-based tracking and storing, duplicated data entry with partners, and difficulty tracking across services can hamper your organization’s ability to improve or add services.
- The effects of the pandemic are still apparent within the transportation industry, including service disruptions and shortages of skilled labor.
- Driver and customer safety and environmental, social, and governance factors are becoming more and more critical. Without an effective TMS that addresses those areas and enables adaptability, transparency, analytics, and integration with suppliers and partners, you risk being left behind as the industry progresses.
Our Advice
Critical Insight
Gain real insight into the features and market for transportation management systems (TMS) and how different solutions are designed to address the needs of a particular type of business, whether that be a single or multimodal transportation business. Transform your business processes to future-proof your business by selecting a holistically integrated and automated solution. Delight your operators and customers with real-time insights.
Impact and Result
- Identify the kinds of tools and activities that are most important to customers right now.
- Prioritize tools and technology that will meet your needs based on critical features and functions that can be leveraged to increase efficiency and profitability, lower cost, and enhance collaboration.
- Align the team: After establishing what technologies are needed for your TMS solution, form the team that will be needed for the selection and implementation.
Enable the Next-Generation Goods Transportation Management System
The time for transportation and logistics companies to modernize their TMS solutions is now.
Analyst Perspective
The next-generation transportation management system (TMS) solutions are here.
“The reality about transportation is that it's future-oriented. If we're planning for what we have, we're behind the curve.”
– Anthony Foxx (BrainyQuote)
Many goods transportation and logistics businesses have built their success with good business principles that were tremendously successful for more than 40 years.
Now they find themselves stuck at the crossroads where the amount of change that is necessary has become overwhelming.
The new reality: Those companies that fail to modernize their operations will be faced with rapidly eroding profit margins as the competition becomes much faster, more accurate, more cost effective, and less burdened by technical debt.
Info-Tech's approach focuses on investigating the challenges in the market and assessing the solutions that can accelerate your transition to a modern TMS.
Kevin Tucker
Principal Research Director, Manufacturing Research
Info-Tech Research Group
Executive Summary
Your ChallengeUnderstand how the TMS will integrate across the business. The CIO must work closely with the operations leaders in the business to drive success. Effectively manage the changes needed for goods transportation processes within the business. Design processes that cater to unique customer demographics but have similar capabilities. Identify the most cost-effective leapfrog strategy for conducting a TMS transformation initiative. |
Common ObstaclesA wide array of homegrown legacy applications: Whether public or private, legacy applications that are either standalone or include proprietary integrations add complexity. Reluctance to change: Staff and operators have been conducting their daily tasks the same way for many years and have become accustomed to the perceived predictability and simplicity of their jobs. Legacy processes: Hiring and retention are critical for replacing proprietary, old, and complex systems. Network reliability: Reliability is necessary for seamless live information sharing with customers and employees. |
Info-Tech's ApproachImprove your TMS capabilities by using this report to understand the needs of the business and the top tools in the market. Use our tools to structure your evaluation and demonstration process for selecting the best tools for your business needs. Adopt a capability-based approach that considers standalone and platform solutions that leverage cloud and edge services. Leverage Info-Tech’s strategic and tactical decision-making advisory services. |
Info-Tech Insight
Goods transportation and passenger transportation are two of the hottest sectors for digital transformation due to the volatility brought about from the pandemic, which caused a radical change in the mindset of the world both environmentally and technologically.
Source: “Understanding COVID-19’s Impact...” Deloitte, 2020
What is a TMS?
A transportation management system (TMS) is a software solution that helps with planning and executing the physical movement of goods. It can be used to coordinate movements across different modes such as rail, ground trucking, air, and sea. A control tower is used to capture data about the goods that can then be used for planning and orchestration of the goods’ movements toward their destination.
Sources: AltexSoft, 2022; Research.com, 2022.
Common challenges for people transportation
Companies need to invest in advanced transportation management systems to meet customer, regulator, and business requirements.
- REAL-TIME INFORMATION
- DECARBONIZATION
- COST MANAGEMENT
Top Challenges for Transportation Companies
Info-Tech Insight
The transportation sector is being transformed globally as lobbyists and governments push for rapid changes that will improve the health and wellbeing of all citizens. The challenge for the transportation industry is to find cost-effective tools and to amplify transformation activities to smooth out the bumps in the transition process.
A high-quality TMS provides adaptability
Supply chains need to be flexible and responsive to the market. More businesses are adopting elastic logistics so that supply chains can easily expand or shrink to current market demand. Artificial intelligence enables flexibility with schedules, carrier space, container usage, and route optimization to avoid overstocking and unoptimized space in vessels.
Transportation/Logistics Challenges Most Critical to Customers
Source: FinancesOnline, 2019
Transportation Management System (TMS)
Also known as mass transit or public transportation software, a TMS is a system for the movement of passengers between destinations.
The market is growing rapidly
Global unrest from COVID-19 caused trade reliability problems, but global trade continued to grow in 2022, with the services trade hitting record year-over-year growth of 15%. TMSs help to deal with trade reliability problems by providing real-time visibility and decision-making data.
Sources: “GTM update: Simplifying complexity.” Logistics Management, 2023
Global freight transportation businesses must modernize to meet demand
- The pandemic placed extreme pressure on the goods transportation and logistics industry as lockdowns were placed upon many countries.
- Uncertainty in shipping and receiving took a choke hold on the industry that was further magnified by the lack of containers, hauling services, last-mile fulfillment capacity, and drivers to move cargo.
- Many companies found themselves with a disrupted supply chain and highly antiquated business solutions that they couldn’t replace due to the erosion in revenues.
- Aggressive future growth is expected. Strong growth will depend upon shipping costs, tariffs, supplier efficiency, and free trade agreements.
COVID-19 caused disruption, and the industry has been slow to bounce back.
- The rapid adoption of Industry 4.0 will accelerate growth in manufacturing and transportation.
- The Amazon Effect will increase pressure on delivery to meet more demanding client expectations.
- Concern about increased carbon emissions will force companies to track and manage emissions, leading to a need for technology to reduce emissions and track impact.
Technology will help drive clean growth.
| 10.8% | The compounded annual growth rate (CAGR) in freight shipping from 2022 to 2028 is expected to be 10.8%. |
| $571 billion | The global freight market is expected to grow to US$571 billion in revenue by 2028. |
Source: GlobeNewswire, 2023
Global freight trucking is growing
-
Despite shifts in global demand, freight trucking growth is strong.
- Strong growth is expected. The US market is expecting to grow to an estimated US$504 billion while China will continue its growth up to a forecasted growth of around US$626 billion.
- IT is in demand to support growth. Within the IT services industry, managed service providers and consultancies are experiencing the highest growth opportunities and will surge about 8% annually. The IT services segment is estimated to reach US$1.2 trillion worldwide.
-
The freight trucking business needs to invest in TMS.
- Few are using a TMS. Only 26% of companies are using a TMS.
- TMSs are new to many current users. Of those companies, 72% have had their TMS for one to ten years.
- Despite a low uptake, a TMS improves profitability. Around half of these companies achieved the expected return on investment within 12 months.
Source: “Top Transportation Management System (TMS) Trends for 2023,” Logistics Management, 2023
Source: GlobeNewswire, 2022
| 4.7% | The CAGR expected in global freight shipping is expected to be 4.7% between 2020 and 2027. |
| $2.9 trillion | Global expected revenue from freight shipping is expected to reach $2.9 Trillion by 2027. |
The transportation management systems industry continues to innovate
TMS solutions have had steady growth as technology innovation is creating opportunities for cost savings.
ARTIFICIAL INTELLIGENCE (AI)
The growth of AI combined with the Internet of Things (IoT) has enabled businesses to make real-time decisions that save time, save money, and deliver incredible new levels of customer satisfaction.
REAL-TIME VISIBILITY SOLUTIONS
The ability for businesses to see the status and information associated with availability of alternative providers and their goods in transit. This capability has become a necessity for the industry leaders.
LIVE TRACKING IOT SOLUTIONS
IoT enables all assets to be interconnected for the capture of information that enables dynamic decision-making and predictive maintenance that save time and money.
Source: Forbes, 2022
TMS feature trends: New tech features improve capabilities
TMS differentiation: Vendors are becoming more specialized
Aljex is very good at synchronizing transportation operations such as contract management, load optimization, and freight auditing. It has multimodal capabilities for parcel shipping, real-time visibility, private fleet management, dock scheduling, and yard management. |
This easy-to-use platform offers some good graphical and visual tools such as bar charts and Gantt charts for mapping routes and conducting load optimization. As an ERP-based solution, it lacks the flexibility of the leading pure-play TMS products. |
Control tower orchestration provides multimodal transportation visibility; synchronized, multi-party, multi-leg planning; and freight procurement that is load optimized and automated for execution. |
This SaaS TMS with a large transportation network has rich process automation and collaboration capabilities for trading partners, provides visibility, and is multimodal. It’s a single-instance multitenant cloud platform with benchmarking and analytics. |
e2open is a global solution that can manage your supply chain with logistics as a service (LaaS) to streamline forecasting demand across industries. Quickly find and book carriers across all modes of transportation at the best rates. |
This is an advanced AI-driven unified transportation logistics platform for shippers, carriers, and brokers. It simplifies logistical operations and provides for strategic data-driven decision making for lower costs and enhanced competitive advantage. |
Sources: InTek Freight & Logistics Inc, 2022; The Logistics of Logistics, 2013
Case Study
TCW
INDUSTRY
Goods Transportation
SOURCES
Trimble Transportation, 2022 TCW
TCW is one of the largest intermodal operations in the USA and is one of the only employee-owned logistics companies.
SituationTCW was established as a family business by the George family in 1948. It has over 450 drivers, nine operations at inland terminals, and two port locations. TCW offers intermodal drayage, truckload, full-service logistics solutions, dedicated fleet services, transloading and warehousing, and yard management services. As the company grew, so too did the number of accidents and costs for accidents where they weren’t at fault. At an average cost of US$428,000 per accident plus increased insurance premiums, impact on drivers, and impact on carrier reputation, it became apparent that TCW needed a solution. |
ActionsAs a result of the extensive costs associated with incidents, TCW began looking for a solution. It started by looking at third-party solutions and then decided to reach out to Trimble. TCW needed more advanced TMS technology capability beyond roll stability and collision mitigation systems that only capture short clips, which often don’t help for accidents. TCW started to explore the Trimble Video Intelligence solution, part of Trimble’s Advanced TMS Platform solution. |
OutcomeThe most critical aspect of the system is that it provides on-demand capabilities to investigate incidents that may not trigger the system. The system was installed across the fleet, and it uses four high-definition cameras that have a built-in function to capture incidents and track behaviors such as hard braking and rapid accelerations, which can then be used for coaching and training of drivers. Within the first couple of months of rollout, a driver was exonerated for an accident. The video system proved that a logging truck hanging into the lane without markers was at fault and had not been rear-ended by the TCW driver. |
Drivers want outward-facing camera protection.
Telematics System
A telematics systems is a solution that is either embedded in or complementary to a TMS. It can be used with all types of vehicles, and components such as cameras may be used for monitoring static assets such as a warehouse.
Safety has become increasingly important
Monitoring
System & Cargo
Live connectivity enables businesses to extend capabilities throughout all assets.
System monitoring tracks all the vehicles’ core functions and sends notifications of problems.
Cameras are installed to capture and record the internal activity in proximity of the vehicle while sensors detect any foul play such as attempts to open parts of the vehicle or steal goods.
Cargo theft increased by 5.9% in 2021 and 10.3% in 2022.Safety
Driver & Roadways
Enhancing safety has become a major concern as distracted driving, extreme weather, increased violence in some areas, and increased populations create higher levels of risk.
A combination of cameras and sensors are used to keep drivers safe and monitor their driving patterns.
The goal of safety systems is to protect the driver and others on the road to keep humans safe, keep costs down, and protect the brand.
Driver monitoring and safety decreased intentional hours-of-service violations from 6% in 2021 down to 2.9% in 2022.**Percentage of inspections where intentional hours-of-service violations were found.
Sources: BSI Group, 2023; Mother Jones, 2022; Descartes & ChainLink Research, 2019
Transportation telematics improve safety
- Traffic fatalities are on the rise. The growing number of fatalities on the highways involving commercial vehicles, as well as the need to curb transportation delays, are driving the need for connected vehicles.
- Fatalities are driving the need for safety measures. Every year over 1.35 million fatalities occur worldwide in road accidents, increasing demand for safety solutions.
- Technology innovation is driving solutions for safety. The increased expansion of 5G capabilities and usage of smart and IoT devices, coupled with the reduced cost of automotive sensors and the potential for insurance premium cost reduction, is driving up the demand for telematics devices for data collection.
Consider telematics as public safety concerns continue to rise.
The United States is aggressively looking for ways to reduce the number of fatalities involving commercial vehicles
A study was conducted by the National Safety Council to measure the number of fatal crashes involving trucks in the US. In 2019, there were 5,005 fatal crashes involving trucks – a disturbing 2% increase from 2018.
Source: Fortune Business Insights, 2022
| 21.6% CAGR | The commercial telematics market is expected to grow from $34.8 billion in 2020 to $158.3 billion in 2028. |
“Insurers need to work more closely with businesses to capture more value from their automated data capture that can then enable significant benefits for both businesses and insurance companies.” Kevin Tucker Info-Tech Research Group
Top telematics vendors: The market is expanding rapidly
Geotab supplies telematics, vehicle, and asset tracking to over forty thousand customers in 150 countries. The company has been operating for more than 20 years, connects to over 3.2 million vehicles, and processes more than 55 billion data points a day. Customers use data for better decisions, increased productivity, and safer fleets. |
Founded by cofounders who previously cofounded Meraki (now part of Cisco Systems), Samsara’s mission is to increase the safety, efficiency, and sustainability of the operations that power the economy. Samsara uses a Connected Operations Cloud to harness IoT data for business insights. |
Track vehicles, improve worker productivity, and encourage safer driving with dashboards, reports, and alerts. See the vehicle and driver location on a live map to improve dispatch, routing, visibility, and driver speed and to reduce idling and harsh driving to reduce costs for vehicle maintenance and fuel use. |
FIPS 140-2validation for the cryptographic module of the product. |
4+ trilliondata points collected annually and200+new features annually. |
End-to-endplatform solution for assets, planning, and dispatching. |
Sources: Geotab; Samsara; Verizon Connect; With Vector, 2021
Recommendations
Develop an application selection process that is easy to perform but also thorough.
Design a digital business strategy to serve your clients. Focus on automating business processes and driving business resilience for growth.
Launch digital solutions that elevate marketing, sales, operations, collaboration, engagement, service, and production capabilities.
It is imperative to focus on the digital risks associated with digital transformation initiatives at the level of structural and operational changes in the organization.
Info-Tech Resources
- Rapid Application Selection Framework
- Define Your Digital Business Strategy
- Build a Digital Workspace Strategy
- Empower Members Through Digital Engagement
- Achieve Digital Resilience by Managing Digital Risk
- Double Your Organization’s Effectiveness With a Digital Twin
“Major changes are coming to logistics. In the near future you will order a product and 30 minutes later a drone will
drop it off right outside your door.”
– Supply Chain Today
Research Contributors and Experts
-
Bob Verret
Chief Information Officer
Dupre Logistics -
Medik Ghazikhanian
Executive Officer, ITS
Los Angeles County Metropolitan Transportation Authority -
Mike Kelley
Chief Technology Officer
MVT Services Inc. -
Steven Schmidt
Managing Partner, Durable Goods
Info-Tech Research Group -
Christopher Goodhue
Managing Partner, Non-Durable Goods
Info-Tech Research Group
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Unlock Sample ResearchContributors
- Bob Verret, Chief Information Officer, Dupre Logistics
- Medik Ghazikhanian, Executive Officer, ITS, Los Angeles County Metropolitan Transportation Authority
- Mike Kelley, Chief Technology Officer, MVT Services Inc.