The Transportation Management System Barbell

One of my supply chain and logistics predictions for this year was that the transportation management system (TMS) market will become more barbell-shaped (mirroring what is happening in the third-party logistics industry). “We’re seeing the TMS market move in two opposite directions,” I wrote back in December. “Some solutions are becoming broader, more integrated, and feature-rich (multi-mode, multi-geography, complex optimization), while others are offering more limited capabilities, but with a stronger focus on ease of use, faster deployment, affordable and transparent pricing, and meeting the needs of the small and mid-sized business (SMB) market.”

Based on recent announcements by LeanLogistics and MercuryGate (which are both Talking Logistics sponsors), it looks like the broader, more integrated, and feature-rich end of the TMS barbell is getting larger.

In late February, LeanLogistics introduced LeanGlobal, a new TMS module that facilitates ocean freight transportation (see my comments at the time), and last week the company announced LeanFleet, a tool designed to streamline fleet planning and execution. Here are some details from the press release:

LeanFleet allows shippers to plan and execute their private fleet and contract carriers on the same platform, providing visibility across the entire transportation network. Shippers can optimize fleet routes, reduce empty miles, and maximize the use of their assets.

LeanFleet offers several features to reduce administrative costs. The system automates the assignment of drivers to trucks based on a scoring algorithm which evaluates information such as the driver’s current location, personal calendar, and hours of service. Shippers can integrate their telematics into the TMS to leverage their investment by utilizing its features in one workflow. They can receive updates on a driver’s arrival and departure based on their geo-fence, transmit load details, and communicate with the driver via messaging—all from the TMS.

Meanwhile, earlier this week MercuryGate announced the availability of MercuryProcure, a freight sourcing and procurement solution that allows users to manage requests for proposals (RFP) for all transportation modes with a single system. According to the press release:

Available for a monthly subscription, MercuryProcure integrates with other MercuryGate products allowing users to leverage the power of carrier rating, report on carrier performance and use real-time shipment data to project accurate costs as they make transportation purchasing decisions.

MercuryProcure has been designed for ease of use for both shippers/3PLs and carriers responding to requests. Users have the ability to provide rich lane metrics to carriers as well as their standing in the current bid process. This information allows carriers to be better informed regarding which lanes they choose to pursue and enables improved participation rates in bid events.

What factors are driving this trend?

In a nutshell, many shippers and 3PLs are currently using multiple applications to manage their transportation operations, which not only includes truckload and less-than-truckload (LTL) carriers, but also parcel, ocean, air, and rail carriers, as well as private and dedicated fleets. These multiple applications are typically poorly integrated (or not integrated at all), which results in fragmented workflows and optimization, fragmented visibility and analysis, and fragmented user experiences.

I’m working with a client, for example, that is currently operating in such a fragmented way, and what they’re looking for in a next-generation TMS, to put it simply, is having a unified transportation management user experience across planning, execution, and analytics.

There are several ways to get there: you can deploy a single solution that addresses all of your end-to-end transportation management requirements (if such a solution exists); you can build your own solution (if you have the time, money, resources, and strategic reasons ); or you can take a hybrid approach, where you develop a common user interface and workflow layer and call out to third-party solutions via web services or APIs to perform certain functions.

Different paths, same destination.

What about the other end of the barbell? There’s plenty of activity there too, with many technology startups looking to enhance, fill in the gaps, or disrupt all sorts of transportation and logistics processes (see my recent post about supply chain startups, and the Wall Street Journal article from last October, Startups Accelerate Efforts to Reinvent Trucking Industry).

What if you’re a TMS vendor somewhere in the middle? It’s not the ideal place to be today.

The bottom line is that even though TMS solutions have been around for decades, the innovation hasn’t stopped. If you’re not using a TMS and the last time you shopped for one was five or more years ago, take a second look today. The same is true if you developed your own solution because you couldn’t find what you needed in the past. What you’ll find might surprise you.

Comments

  1. 100% accurate, Adrian. I will add that the small-medium company market is growing fast, too. Around 50% of the market seem to manage without a TMS today – even brokers and 3PL’s! Or, they are using technology so old it requires “winding up” on occasion. I am constantly amazed at what I see – even with companies with freight spend in the tens of millions, annually.

    So, the hunger for VALUE priced technology is certainly there, too. We are seeing it in spades with AscendTMS.

    Tim Higham
    CEO
    AscendTMS (www.TheFreeTMS.com)

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