TMS market is on the mend following recession, says ARC Advisory Group
May 05, 2011 - LM Editorial
The market for Transportation Management Systems (TMS) appears to be heating up again, according to data released this week by ARC Advisory Group.
The Dedham, Mass.-based firm said that the TMS market has “bounced back” after the global recession, growing faster than the rate of inflation in 2010, with significant growth forecasted through 2015. Company officials declined to provide specifics on the rate of forecasted growth.
ARC groups TMS into three application areas: “Planning & Execution” solutions or end to end transportation systems used by shippers who utilize carriers to move their freight; “Fleet Management” as an end to end solution for shippers/carriers that own transportation assets and need to manage those assets efficiently and effectively; and “Point Solutions,” which include any systems that cover only a part of the end to end transportation process.
ARC Service Director for Supply Chain Management Steve Banker said that TMS multitenant solutions that leverage the network remain a key growth driver for the TMS market.
ARC maintains that transportation is inherently a “multi-partner collaborative endeavor,” with networked-style solutions such as SaaS (Software-as-a-Service) leveraging multitenant architecture used to facilitate things like:
-high-quality electronic communication with partners;
-quicker onboarding of new partners;
-enabling efficiencies in transporation procurement;
-improvement in freight audit and pay; and
-the ability to leverage data from the network to provide benchmarking data.
“The primary advantages of multitenant networking solutions are that the data cleansing issues largely disappear,” Banker said in an interview. “Secondly, the network can be leveraged. If you are dissatisfied with a carrier on a lane and need a new one, there is a good chance that carrier is in the network and you can start quickly tendering loads via EDI without having to set up one to one connections. Most companies don’t want to be in the EDI data cleansing business.”
Banker noted that the two sectors that are leveraging TMS more so than others are third-party logistics (and carriers) and retail.
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