3 min read

The Future of Transportation Management Systems

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What is the future of the TMS?

As one of the most important processes in the supply chain, transportation, shipping, and logistics management should always be treated as a priority. At the same time, this can represent one of the most costly, complex and time-consuming pursuits in the company.

These, among other pressing reasons, are why interest in and demands for robust transportation management systems (TMS) have been on the rise lately. Let's take a closer look at the future of the TMS, and how an asset like this could make all the difference for your business:

The market continues to expand

According to a recent report from Technavio, the global TMS market is continuing to grow at a considerable pace, particularly as these advanced tools offer savings and improved efficiency for transportation and logistics managers across the board.

Technavio forecasted a more than 8 percent compound annual growth rate for this market through 2022, and separate research from Transparency Market Research noted that by 2025, this sector will surpass a value of $30 billion.

GUIDE TO: Better Supply Chain Integration 

Legacy options being replaced with the cloud

The shift toward cloud-based solutions certainly isn't unique to the TMS industry, but providing these robust management capabilities through a cloud delivery model has considerable benefits for logistics managers and their staff members.

In the current TMS sector, many organizations are trading up and upgrading their on-premise, legacy systems with more advanced cloud solutions. Gartner Research Director Bart De Muynck described the trend to Logistics Management:

"We're seeing a lot of companies moving from older, on-premise platforms to either multi-tenant (where a single instance of software runs on a server and serves multiple tenants) or cloud-based solutions. At this point, a lot of the older TMS solutions are starting to be bypassed, and particularly if their vendors aren't going to be supporting them anymore."

In this way, many logistics managers are investigating newer options from young market players that they haven't worked with before, while others are simply upgrading through their original software provider.

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Benefits must support robust ROI

A strong return on investment is imperative for every kind of investment. When it comes to their TMS, shipping and logistics managers and their stakeholders are looking for measurable advantages that can help support ROI, including elements like:

check_markCapital savings: A TMS should enable shipping and logistics teams to gauge shipping options according to those that are the most efficient and least costly. According to research from ARC Advisory, on average, companies that leverage a TMS report 8 percent savings in their shipping and logistics management.

check_markImproving connections with carriers: A TMS can offer improved visibility and insight, as well as better support for communicating and negotiating with carriers.

check_markReporting: Metrics, including spending across channels, invoice auditing, and other custom reporting can help monitor performance and enable ROI.


Users require more advanced features

The future of the TMS will also see rising demands for expanded feature sets that provide richer and more impactful capabilities for shipping and logistics teams. These include elements like:

  • Rate comparisons across different carriers and shipping modes.
  • Real-time tracking and carrier updates accessible within the same TMS platform.
  • Ability to integrate with ERP, CRM, WMS and other inventory systems.

The future of TMS is bright - connect with the experts at FreightPOP to learn more!


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