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

Many companies are turning to Global Trade Management (GTM) as a viable solution to address the complexities associated with international trade. But how do you successfully build a business case for GTM software?

Various media outlets reported this week that UPS will pay $25 million to settle allegations that it filed false claims to the federal government over guarantees it made related to delivery of Next Day air overnight packages.

While the dust continues to settle at West Coast ports after a nine-month labor dispute that saw the two main parties involved–the Pacific Maritime Association (PMA) and the International Longshore & Warehouse Union–reach a tentative labor agreement on February 22, the PMA said yesterday that its members voted to ratify a new contract with the ILWU.

The United States House of Representatives yesterday passed legislation, entitled H.R. 2353, the Highway and Transportation Funding Act of 2015, by a 387-35 margin that extends current law and authorizes surface transportation programs through the end of July.

As the supply chains of high-tech shippers continue to mature and innovate, coupled with rapid growth, it is not a huge surprise to see them further leverage current strategies and lay the groundwork for newer ones, when it comes to further expanding their manufacturing supply chain capabilities. That was a key theme in the fifth Annual UPS Change in the (Supply) Chain (CITC) survey that was rolled out today.

Article Topics

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

Comments

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


© Copyright 2015 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA