Transportation Management System (TMS) Market Expectations
Companies are expected to be implementing TMS software at an increasingly faster pace, which is having many professionals in the transportation management software market believing the TMS software market is set up to grow exponentially.
2018 freight market capacity shortage have caused many shippers across the US to rethink their methods of aquiring trucking capacity at a fair price.
While the 2018 logistics challenges brought many companies to the table, other reasons for the expected rocketship projections include:
- C-Level and Corporate Boards See Logistics and Supply Chains as a Competitive Tool Versus a Cost.
- Logistics Teams Need Better Tools to Manage Today's Supply Chain Complexities.
- The Ability to Find Capacity at a Competitive Rate is Becoming Increasingly More Difficult.
- Companies Require Better Communications of their Logistics Flows to All Stakeholders from Suppliers through to Final Delivery to the Ultimate Customer.
In addition to the above reasons why companies are expected to implement a TMS , the adoption rate of TMS technology is relatively low considering the tremendous benefits the logistics technology brings to a company.
In a recent study conducted by Gartner, it was estimated there is only a 35% to 40% TMS adoption rate with the following rates by company freight spend:
- Companies Over $100 Million in Freight Spend - 50% Adoption of TMS
- Companies Between $25 Million - $100 Million - 25% Adoption of TMS
- Companies Under $25 Million in Freight Spend - Roughly 10% Adoption of TMS
So, while the days of managing a freight and logistics team via a Microsoft Access and Excel Spreadsheet is in the rearview mirror by many, the numbers would indicate there is plenty more opportunity for companies of all sizes to bring in a TMS software solution to improve their logistics operations in a way to reduce cost and build a competitive advantage.
TMS Platform Capabilities Continue to Expand
The capabilities of a TMS continue to expand, while their costs continue to decrease which will drive many current TMS users to another solution.
Some of the future trends include:
- Faster, More Secure and Tighter Integration Advancements
- Tighter Integration of the OMS, ERP and WMS to the TMS Platform
- Increasing Transportation Modes in Shipments Driven from Ecommerce Omni-Channel Strategies
- AI and Machine Learning Improvements for Management Capabilities within the TMS
- Additional Market Resources Coming to Market to Further Enhance Companies Using a TMS
- Blockchain is on the Horizon
- Transitioning to the Cloud
- Control Tower
In other words, TMS capabilities are expanding their scope to be more than just a freight platforms, but an interconnected system that provides a complete view of a company's supply chain.
In short, as the demand for transportation management systems increases, the market has responded and will continue to respond in the coming years. The TMS adoption and growth between now and 2025 is expected to surpass what was already a skyrocket exponential curve growing four times larger than its current size, reaching $4.9 billion in sales.
For more on Transportation Management Software (TMS), check out these articles:
- 2019 Best Transportation Management Software Systems
- Intek - Helping MercuryGate TMS Grow
- Transportation Management System - Functionality, Benefits & Implementation
- The Complete Guide to Managed Transportation and Transportation Management Systems
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A Complete Guide to TMS Freight Software: Market, Capabilities and Solutions for Shippers
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