What does the Future of Transport Management Systems Look Like? A Look To 2018 and Beyond
Today's post concludes our series on all things TMS. Whether you call it a transportation management system, TMS, or transport management system, we have you covered on the State of TMS in our first post, the 4 key process enablers in the second post, and in today's post we will cover what the future holds for transport management systems. As a TMS provider, Cerasis also provides the services related to transport management: freight claims, freight accounting, carrier relations, and more.
We built our Cerasis Rater TMS in 1998, launching it as web-based before Google was even a business. Our (now Army, as our Development Manager, Jerel Byrd calls them) development team are always continually improving the Cerasis TMS, as we know it is vital to have a system that is not only innovative, but sound, secure, and enables those in transportation to do their job all while doing it cost effectively.
Are you using a TMS to help manage your transportation department as a shipper? What are you seeing in the space? We'd love your input in the comments section below.
Behold, The Future of Transport Management Systems
Transport management systems, also known as TMS, have come a long way since the 1980s when rudimentary applications with basic features were introduced. Until recently, the main aim of TMS was to help shippers increase efficiency and cut transportation costs by allowing them to choose modes and manage transportation orders. While this is still true today, the latest TMS applications aim to offer comprehensive solutions to deal with the complexities of global shipping business as well as third party logistics.
Still, the use of transport management systems is largely confined to big shipping and 3PL companies due to high implementation and maintenance costs, which have deterred most small to mid level shippers. According to a report published by Inbound Logistics, only about 35% of shippers are currently using TMS and most of them are large companies. This means that most small companies are missing out on the benefits of TMS applications.
But the picture is changing rapidly. Developers are increasingly targeting small to mid level shippers who form the bulk of the shippers worldwide. TMS applications are not only becoming more affordable; they are also incorporating features to provide comprehensive shipping solutions rather than just the management of transportation. As a result, a growing number of shipping companies of all sizes as well as 3PL companies are embracing them in unprecedented numbers.
Transport management systems are continuously evolving to meet the ever-increasing expectations and demands of tech-savvy users. Each new generation of TMS products is coming with enhanced mobility, improved usability, new forms of optimization, and better analytics. They are no longer focused only on freight savings measures; the latest systems are designed to improve delivery capabilities, increase warehouse efficiencies, reduce inventory, and improve cash flow.
A study carried out by ARC Advisory Group has found that the demand for TMS applications has been growing steadily over the years. The growth is likely to continue until 2018 and well into the mid-2020s when the market is expected to reach saturation. While tier 1 companies are expected to continue to drive the growth, small to mid level companies can be expected to grab a bigger share of the market in the future owing to their sheer number.
Here is a look at what the future holds for TMS in 2018 and beyond
- Cloud-based Transport Management Systems: The main reason small and mid-level shippers have been slow to embrace TMS is the high cost of implementation and maintenances, as mentioned above. Developers are moving toward cloud-based systems, which are cheaper to implement and maintain. With cloud-based TMS, shipping companies no longer need to have expensive servers and a team of dedicated staff. Also, by its very nature, a cloud-based system can be accessed from anywhere, which makes it easier for shippers to get real-time information to make on-the-spot decisions.
- Becoming one with the other office systems: Just like word processor, spreadsheet and presentation started out as separate applications and merged to become one single office system, today's TMS applications are evolving to become one with the office system. When that becomes a reality, users will no longer have to worry about costly integration. Also, the next generation transport management systems will be built on the Enterprise Service-Oriented Architecture (Enterprise SOA) technologies, which will allow resources to be shared (and split, when needed) more efficiently.
- Full integration with cutting-edge technology: Technology has always been the driving force behind the evolution of TMS and logistics. The latest transport management systems are incorporating cutting-edge technologies like mobile phones, GPS satellites, 3D printers, big data and artificial intelligence (AI) to enable transportation management in ways that were like science fiction only a decade or so ago. By 2018, most TMS applications will come with advanced route, freight and network optimization features using all these powerful technologies.
- Use of 'meta intelligence' to leverage TMS visibility: Developers are already experimenting with 'meta intelligence' to leverage TMS visibility and big data in the decision-making process. The aim is to integrate TMS with marketing, sales, distribution and customer service based on the business intelligence obtained from the transportation network. In the future, it will be possible for shippers to know the environmental and financial costs of every load in every lane, anticipate and adjust for capacity constraints, and achieve maximum utilization of their facilities by managing inbound and scheduling appointments.
In view of all the developments that are going on, the future of TMS looks very promising. In fact, many experts firmly believe that the future of shipping and 3PL lies in TMS. As such, shippers and 3PL companies that adopt TMS early will get a clear advantage over those that don’t. Therefore, they should adopt TMS as soon as they can.
If you'd like a demo of the Cerasis TMS, we call the Cerasis Rater, simply fill out a request on our website here.