Transportation Management System (TMS) is a computerized
system used by logistics companies and shippers to manage their transportation
operations. It is an essential tool for businesses that need to track their
goods and ensure that they are delivered on time and at the right location. The
system includes features such as order management, route optimization, and
carrier selection.
The use of TMS has become increasingly important in recent
years as supply chains have become more complex and global. The transportation
industry has evolved to meet the growing demand for faster, more efficient, and
cost-effective delivery of goods. TMS plays a critical role in this evolution,
providing visibility and control over the entire transportation process.
One of the key benefits of TMS is that it enables businesses
to optimize their supply chain by reducing transportation costs and improving
delivery times. TMS can analyze multiple factors such as distance, traffic, and
fuel costs to determine the most efficient route for each shipment. This not
only saves time and money but also reduces carbon footprint and contributes to
a more sustainable business model.
Another benefit of TMS is that it improves communication
between shippers and carriers. With real-time tracking and monitoring,
businesses can stay informed of the status of their shipments and quickly
resolve any issues that may arise. This improves customer satisfaction and
helps to build long-term relationships between shippers and carriers.
In addition, TMS provides businesses with data analytics and
reporting capabilities, allowing them to track and analyze their transportation
operations over time. This can help identify trends and areas for improvement,
leading to more informed decision-making and greater efficiency in the supply
chain.
With the rise of e-commerce and the increasing demand for
faster delivery times, the importance of TMS is only set to grow. Businesses
that invest in a robust TMS will be better equipped to meet the challenges of
today's transportation industry and stay competitive in the global marketplace.
The COVID-19 pandemic has had a significant impact on
logistics firms that are responsible for the storage, movement, and flow of
goods. These firms play a crucial role in facilitating trade and commerce and
helping businesses get their products to customers. The pandemic put pressure
on logistics firms to keep their core transportation systems operational while
ensuring compliance with lockdown measures and social distancing protocols. As
a result, transportation organizations had to strike a balance between reduced
operations and providing enough capacity for key workers. Additionally,
logistics firms had to re-prioritize and re-plan long-term investment programs
due to decreased revenue.
To improve supply chain visibility, manage costs, and
provide higher levels of customer service, many shippers continue to invest in
transportation management systems (TMS) every year, even post-COVID-19. Those
companies that were already using a TMS found their operations to be better
positioned to face the challenges posed by the pandemic. With remote workforce
operations expected to continue while COVID-19 persists, smart supply chain
operators and organizations are adopting forward-looking TMS solutions as part
of their technology to create more opportunities. These solutions focus on
creating efficiencies and improving supply chain visibility, which are critical
components for logistics firms to remain competitive in the market.
As the trend of online shopping continues to rise, shippers
and carriers are changing their business models to make freights more
attractive to carriers. Shippers are now offering flexible pick-up and drop-off
times, giving advance notice of loads, and maximizing truck filling capacities.
With the help of a transportation management system that has optimization
capabilities, load options can be presented to carriers, and the true
profitability of each load can be calculated. This assists carriers in
enhancing their profitability and reducing deadline miles. In recent years,
transportation management systems have provided high returns on investment by
saving freight costs through factors such as simulation and network design,
load consolidation, lower cost mode selections, and multi-stop route
optimization. As freight costs continue to increase after the pandemic,
companies are aggressively seeking transportation management system solutions
to improve their transportation performance. Purchasing a transportation
management system is a common way for shippers to achieve this goal.
Transportation Management System Market Dynamics
The Transportation Management System (TMS) market is driven
by the exponential growth of the eCommerce industry. The rise in online
shopping and increase in internet users have resulted in nearly 67% of
consumers' shopping journey to include internet search. Furthermore, the World
Economic Forum predicts that eCommerce penetration rates will increase to 17%
by 2025. As a result, manufacturers, distributors, retailers, reverse logistics
managers, third-party freight brokers, and logistics service providers need to
operate faster and more efficiently to process small individual orders and keep
up with the increasing eCommerce sales trend. Customers expect quick and
accurate order deliveries with free returns. To meet these needs, it is
essential to adopt TMS solutions that digitalize logistics operations and
automate order management, carrier/shipment management, and distribution/delivery
management functions.
TMS solutions enable shippers to leverage all modes of
transportation, especially critical during peak shipping times and through ongoing
capacity crunch. They also help reduce shipping costs, making them crucial for
the ~96% of all shippers affected by eCommerce. As a result, there is a demand
for leveraging the benefits of eCommerce and TMS connectivity to create an
effective logistics strategy during the demand for transportation management
system.
Restraints in
Transportation Management System Market
Heightened Concerns
About Data Security
With the increasing digitalization of processes in the
transportation industry, logistics users and entities are at a greater risk of
data abuse and theft. Protecting data from unauthorized access is crucial as it
is an essential component of any organization. Breaches and thefts could
compromise enterprise data security and adversely impact business
competitiveness. Hence, the transportation industry is cautious about data
security and privacy, which restrains its growth.
Opportunities in
Transportation Management System Market
Adoption of
Cloud-based Technology and Industry 4.0
Many companies are adopting cloud computing technology to
improve their efficiency. Cloud-based solutions, such as Transportation
Management Systems (TMS), Supply Chain Management (SCM), and
Logistics-as-a-Service (LaaS), provide inherent benefits such as
cost-effectiveness, agility, ease of use and integration, planning, and
scalability. The transportation and logistics industry is also adopting modular
cloud-based TMS that assimilate orders, billing, and track-and-trace services
in one platform. Cloud-based transport and logistics solutions help track and
analyze the overall supply chain activities across the forward and backward
supply chain ecosystem. Enterprises can build a secure, reliable, and
integrated system for TMS that gives real-time information to consumers, enhancing
overall supply chain management. Therefore, the adoption of cloud-based
technology and Industry 4.0 provides new opportunities for the transportation
and logistics industry.
The logistics industry is undergoing a transformation as
traditional warehouses are being replaced by smart, connected, and highly
efficient automated warehouses by integrating Industry 4.0 with warehouse
robots. By receiving specific instructions and adapting to the environment,
robots can perform operations more efficiently. The integration of Industry 4.0
with robotics systems has led to an efficient transportation process, improving
coordination among warehouse and transportation management systems. This has
enabled logistics operators to perform high-velocity operations at a low cost,
ensuring that customer orders are processed and products are delivered on time.
Challenges in
Transportation Management System Market
However, the adoption of transportation management systems
has been slow due to the high capital investment required. The installation of
automation equipment, software, and solutions is a significant expense for
companies. Additionally, legacy systems that have already been heavily invested
in by the logistics industry make it challenging to replace them with new
transportation management systems. The integration complexities of multiple IoT
platforms make it difficult for new companies and users to adopt new TMS
solutions. Various protocols and different APIs do not allow the systems to
interoperate. Furthermore, organizations that are used to more manual work are
hesitant to adopt digital technology like TMS. This reluctance is causing a
hinderance to the adoption of transportation management systems in more and
more companies.
The transportation management system market is segmented by
end user into shippers, 3PL, and others. During the forecast period, the 3PL
segment is expected to experience the highest growth rate. This is due to the
need for efficient transport options and improved planning and decision-making
processes, driving the adoption of transportation management system solutions
and services within this segment.
In terms of geographical regions, the Asia Pacific is
expected to have the highest growth rate during the forecast period. The
expansion of the transportation sector in this region is being boosted by
favorable government efforts and regulations. Additionally, the increasing
global competition, growing penetration of smart devices and connected
machines, and rising investments in smart cities are contributing to the high
growth rate. Developing countries in the region, such as India, China, and
Vietnam, are experiencing high economic growth, leading to an increase in the
number of connected solutions that generate vast amounts of data. This has made
transportation management systems a prominent feature in the growing
transportation and logistics sector in the Asia Pacific.
Key Market Players in Transportation Management System
Market
- ORACLE
- SAP
- MANHATTAN ASSOCIATES
- C.H. ROBINSON
- E2OPEN
- TRIMBLE
- WISETECH GLOBAL
- DESCARTES
- MERCURYGATE INTERNATIONAL
- BLUE YONDER
- TRANSPLACE
- ALPEGA GROUP
- WORLDWIDE EXPRESS
- INFOR
- GENERIX GROUP
- 3GTMS
- SHIPWELL
- 3T LOGISTICS & TECHNOLOGY GROUP
- RATELINX
- OTMS
- NSHIFT
- BLUEROCK LOGISTICS
- ELEMICA
- TESISQUARE
- DDS LOGISTICS
- SUPPLYSTACK
- VTRADEX
- SHIPTIFY
- GLOBALTRANZ
- INMOTION GLOBAL
- MP OBJECTS
- LOGISTICALLY
- ONE NETWORK ENTERPRISES
- ENVASE TECHNOLOGIES
- INTELLITRANS
- ALLOTRAC
- REVENOVA
- PRINCETON TMX
- CTSI GLOBAL
- ULTRASHIP TMS
Recent Developments in Transportation Management System
Market
In June 2022, Descartes acquired XPS Technologies to enhance
its cloud-based, multi-carrier parcel shipping services for small, medium, and
large e-commerce shippers. This acquisition will allow Descartes to extend its
network and offer an expanded set of services to its customers.
In May 2022, MercuryGate partnered with Amazon to provide
shippers with access to Amazon Freight's dependable network and competitive
dynamic rates through the MercuryGate platform. The partnership will enable
MercuryGate's customers to leverage Amazon Freight's reliable network and benefit
from competitive rates.
In March 2022, Blue Yonder and Snowflake collaborated to
offer an end-to-end supply chain solution. Blue Yonder's Luminate Platform,
powered by Snowflake, will enable retailers, manufacturers, and 3PLs to better
anticipate, prevent, and address disruptions across their business, mitigate
risks, and overcome industry supply chain challenges.
In February 2022, Oracle and RHI Magnesita, a top supplier
of refractory products, selected Oracle Fusion Cloud Transportation Management
to support RHI Magnesita's technology modernization and expansion plans.
In January 2022, e2open entered into a strategic partnership
with PayCargo, a global logistics payment solution, to simplify and speed up
the freight payment process for carriers, forwarders, and shippers. This
partnership will help e2open's customers move goods more efficiently by
streamlining the payment process.
The transportation management system (TMS) market has
witnessed significant growth in recent years, driven by the increasing need for
efficient transportation solutions in various industries, including retail,
manufacturing, and healthcare.
One of the recent developments in the TMS market is the
adoption of cloud-based solutions. With the rise of cloud computing technology,
transportation companies are moving away from traditional on-premise TMS solutions
to cloud-based ones, which offer greater flexibility, scalability, and
cost-effectiveness. Cloud-based TMS solutions also allow for real-time
visibility and data analytics, enabling companies to optimize their
transportation operations and reduce costs.
Another development in the TMS market is the increasing use
of automation and artificial intelligence (AI) technologies. Automation can
help streamline and optimize transportation processes, while AI can provide
advanced analytics and predictive insights to improve decision-making. For
example, AI-powered TMS solutions can predict potential delays and optimize
routing to ensure on-time delivery, reducing transportation costs and improving
customer satisfaction.
The integration of TMS with other systems, such as warehouse
management systems (WMS) and enterprise resource planning (ERP) systems, is
also a recent development in the market. Integrating TMS with WMS and ERP
systems can provide end-to-end visibility and control over the entire supply chain,
enabling companies to make better decisions and improve overall efficiency.
Finally, the adoption of blockchain technology in the TMS
market is another recent development. Blockchain can provide secure and
transparent data sharing and tracking, improving visibility and reducing the
risk of fraud and errors in transportation processes.
Overall, the TMS market is undergoing significant changes
and developments, driven by the need for greater efficiency, visibility, and
cost-effectiveness in transportation operations. The adoption of cloud-based
solutions, automation and AI technologies, integration with other systems, and
the use of blockchain are all recent developments that are shaping the future
of the TMS market.
1.
Research Sources
We at Zettabyte Analytics have a
detailed and related research methodology focussed on estimating the market
size and forecasted value for the given market. Comprehensive research
objectives and scope were obtained through secondary research of the parent and
peer markets. The next step was to validate our research by various market
models and primary research. Both top-down and bottom-up approaches were
employed to estimate the market. In addition to all the research reports, data
triangulation is one of the procedures used to evaluate the market size of
segments and sub-segments.
Research Methodology

1.1. Secondary Research
The secondary research study involves various sources and databases used
to analyze and collect information for the market-oriented survey of a specific
market. We use multiple databases for our exhaustive secondary research, such
as Factiva, Dun & Bradstreet, Bloomberg, Research article, Annual reports,
Press Release, and SEC filings of significant companies. Apart from this, a
dedicated set of teams continuously extracts data of key industry players and
makes an extensive and unique segmentation related to the latest market
development.
1.2. Primary Research
The primary research includes gathering data from specific domain
experts through a detailed questionnaire, emails, telephonic interviews, and
web-based surveys. The primary interviewees for this study include an expert
from the demand and supply side, such as CEOs, VPs, directors, sales heads, and
marketing managers of tire 1,2, and 3 companies across the globe.
1.3. Data Triangulation
The data triangulation is very important for any market study, thus we
at Zettabyte Analytics focus on at least three sources to ensure a high level
of accuracy. The data is triangulated by studying various factors and trends
from both supply and demand side. All the reports published and stored in our
repository follows a detailed process to obtain a reliable insight for our
clients.
1.4. In-House Verification
To validate the segmentation
and verify the data collected, our market expert ensures whether our research
analyst is considering fine distinction before analyzing the market.
1.5. Reporting
In the end,
presenting our research reports complied in a different format for straightforward
valuation such as ppt, pdf, and excel data pack is done.