TMS: The key enabler
January 14, 2011
“TMS continues to be seen as the key enabler that will help freight organizations reduce total and empty miles, enable better utilization of freight capacities, minimize unnecessary moves, combine loads to use more economical modes of transportation, and ensure that the least-cost modes and carriers are routinely chosen by users,” says Klappich.”Well, according to Dwight Klappich, research vice president for Gartner, Inc., 2010 actually did see an expansion in the size, functional breadth and depth, and geographical scope of the TMS market, as users sought out technologies to help reduce costs, improve efficiency, and “generally run their freight operations more effectively.” Klappich calls TMS a growing market for shippers of all sizes—from those that spend as little as $15 million on annual freight, to shippers that spend hundreds of millions of dollars per year on transportation.
Klappich and the Gartner supply chain research team expect the TMS market to maintain growth for several years, with double-digit growth emerging in 2011 and a projected five-year compound annual growth rate (CAGR) of 9.4 percent.
One doesn’t necessarily relate TMS to a company’s sustainability efforts, but that could change in the near future as more of the software’s vendors integrate green-centric features into their solutions. Carbon footprints—or the total set of greenhouse gas emissions caused by an organization, event, or product—are of particular interest.
TMS vendors have expanded the breadth and depth of their solutions to the point where most shippers can source most, if not all, their needs from a single vendor, according to Klappich.
As one of the more mature supply chain software sectors, TMS is expected to continue gaining ground in 2011, with that growth spurred on by the drivers mentioned above. Concurrently, Adrian Gonzalez, director of ARC Advisory’s Logistics Executive Council and Logistics Viewpoint, says vendors will be working to fill in any “white spaces” left by previous versions, or those areas that current TMS offerings simply don’t address—such as functions that aim to improve containing and load building, for example.