Subscribe to our free, weekly email newsletter!


Logistics technology: ARC says SaaS sales helped overall TMS market growth

By Jeff Berman, Group News Editor
May 25, 2010

While the effects of the global recession took its toll on enterprise software markets to a large degree in the form of a double-digit revenue reduction, it does not appear that damage to the Transportation Management System (TMS) market was nearly as severe, according to research from ARC Advisory Group.

As defined by ARC, TMS are software services that facilitate the procurement of transportation services, including: the short-term planning and optimization of transportation activities, assets, and resources; and the execution of transportation plans on a regional or global basis for all modes of freight transportation and parcel management.

Dr. Steve Banker, service director of supply chain management at ARC said in a statement that even though TMS sold on a traditional software model declined at a double digit rate between 2007 and 2009, those losses were quelled by TMS services sold as part of a SaaS (software-as-a-service) model, which is comprised of services packaged as part of a leasing model and are hosted online.

“When people think of SaaS, they think of lower costs and not spending [hundreds of thousands of dollars] to implement, along with paying a lower monthly rental fee to get payback more quickly,” said Banker in an interview. “TMS falls into that model.”

Another reason for TMS in a SaaS model hanging tough during the recession, according to Banker, is that is it well-suited to be sold in a network model. The reason being that with SaaS, it is viewed as a single-instance, multi-echelon, multi-tenant solution based on a single piece of code running from the software vendor to multiple shippers.

These shippers are all working off of the same piece of code, which provides myriad advantages in the transportation sector, said Banker.

“Shippers typically have preferred carriers,” said Banker. “But if a carrier is for some reason unable to move a load it needs to be tendered to other carriers. It is not unusual for shippers to have 40 or 50 carriers that they work with on an ad-hoc basis for a particular lane. But the problem there is that it is generally based on EDI (electronic data interchange) messaging, which many carriers and 3PLs use as their own dialect.”

In a traditional TMS, picking up EDI messages and effectively making use of them is not easy or straightforward, Banker noted. And data cleansing is not something which is preferred by any shipper, whereas they want to buy an application and have it work.

Going forward, ARC expects TMS sales to rise between 2010 and 2014, but company officials would not provide specific figures regarding projected sales growth and percentages.

About the Author

Jeff Berman headshot
Jeff Berman
Group News Editor

Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. .(JavaScript must be enabled to view this email address).


Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

Seasonally-adjusted (SA) for-hire truck tonnage in July headed up 1.3 percent on the heels of a 0.8 percent increase in June. The ATA’s not seasonally-adjusted (NSA) index, which represents the change in tonnage actually hauled by fleets before any seasonal adjustment, was 133.3 in July, which outpaced June’s 132.3 by 0.8 percent, and was up 2.8 percent annually.

Volumes for the month of July at the Port of Long Beach (POLB) and the Port of Los Angeles (POLA) were mixed, according to data recently issued by the ports. Unlike May and June, which saw higher than usual seasonal volumes, due to the West Coast port labor situation, July was down as retailers had completed filling inventories for back-to-school shopping.

With a 0.8 cent decrease, this week’s average price per gallon is $3.835 and stands as the lowest price since hitting $3.844 the week of November 25, 2013.

LTL carriers are rapidly investing in expensive, on-dock, three-dimensional size measurement capturing machinery, and they are hoping one day of being able to more accurately charge shippers rates based on the actual dimensions of their shipments, rather than the traditional weight-and-distance-based formula that has been in effect since the 1930s or even earlier.

The Department of Transportation’s Bureau of Transportation Statistics (BTS) recently reported that its Freight Transportation Services Index (TSI) dipped 0.9 percent from May to June.

Article Topics

News · TMS · Picking · Software · Procurement · Transportation · All topics

Comments

Post a comment
Commenting is not available in this channel entry.


© Copyright 2013 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA