The state of the global transportation management system (TMS) market is changing. According to Marketers Media, the global TMS market will swell to more than $486.44 billion USD by 2027. This reflects a compounded annual growth rate (CAGR) of 19.2% from 2018 to 2027. What’s most interesting about the rapid change in the market is its driving force. Like all other industries, shippers are continuously looking for ways to do more with less and leverage technology to automate processes. Unfortunately, those capabilities do not always translate well when it comes time to buy into a TMS, and the major software vendors, including MercuryGate, have taken note of this exact problem. What do we mean? To answer that question, let’s take a closer look at the problems of the traditional TMS market, why TMS adoptions might be considered an epidemic, and the impacts of rapid changes within the market as a whole.
What’s Wrong With the Traditional TMS in Today’s Global Market?
TMS Adoption Is an Epidemic
The rate of TMS adoption has steadily increased over recent years. The information highway has evolved, and as explained by Trucking Info, “the industry has progressed from phone calls to automated faxes to EDI status updates to web portals and to APIs (application program interfaces that allow various systems used by carriers and their customers to share data). More recently, third-party vendors offer platforms to manage the data shared between shippers and carriers and also to collect carrier data into a central point for shipper access. A fleet’s customers today want 100% visibility and real-time data on their shipments. Beyond GPS position, that might include route, mileage, or trailer data such as temperature.”
Moreover, a Peerless Research Group’s 2019 Technology Study, says Supply Chain 24/7, found transportation management systems help 26% of companies suffering from problems finding reputable carriers, to connect with the right carriers that will yield higher on-time and damage-free shipments. Yet, adoption, according to the study, still has a long way to go. The study cites that currently, warehouse management systems (WMS) have the highest adoption rate at 39%, but the TMS adoption rate is expected to reach 29% by 2022. The gap between TMS adoption and WMS adoption will close to less than 4%, and powered by the cloud, the costs to invest in a modern TMS are rapidly shrinking.
Impacts of Changes in the TMS Market
- Faster deployment
- Increased ROI
- Lower TCO
- Improved competition with e-commerce juggernauts
- Decreased implementation costs
- Improved customer service for system users
- Continuous access to more carriers and data via API-driven systems
- SaaS-based code that reduces costs and streamlines data storage and freight management