TMS Evolution: A Provider’s Perspective
Shippers have numerous Transportation Management System (TMS) options, but they are farther from feature and price parity than you may imagine. While many TMS core tenants are now commodities, there are significant gaps, strengths, and weaknesses across the main players.
At a fundamental level, a TMS is an application that helps a shipper move freight to meet customers’ expectations. Let’s examine past and current solutions and look ahead to what’s on the horizon.
Technology advances transform transportation management systems. In the early days of TMS, circa 2000, you could find beneficial individualized tools, which lived in silos. Data entry was prevalent, integrations were scarce (or highly custom and expensive), and capabilities were limited. This worked because many shippers still leveraged individual carrier websites and had dizzying workflow, disconnected datasets and no business intelligence expectations.
Rapid tech advancements throughout the early 2000s had an exponential impact on TMS features, as well as how they were architected.TMS providers began to serve a mixed market of shippers, brokers, carriers, and 3PLs with the same application code base.Focus turned to their complex operational requirements. Cloud-based solutions made TMS technology more affordable for smaller companies to compare carrier rates, manage execution, monitor freight movements and automate processes.
By 2010, expectations for real-time data exchange via APIs (application programming interfaces) started to gain in popularity alongside traditional file exchanges. To a degree, explosive growth in API adoption has helped level the TMS playing field. Notably, integration features quickly became the norm as opposed to a rare, costly, customized one-off.
What to expect. Today, nearly everything is cloud-based. Shippers no longer need large budgets for TMS. On-prem tech is rare. Speed-to-implementation is key. Expansive pre-built third-party service integrations must be easily configurable. Optimization tools need to be powerful. Brand-agnostic and real-time ERP and WMS integrations must be tried and true. Latency must be low.
TMS providers also are expected to rapidly analyze large and complex datasets, augment those datasets appropriately and provide meaningful insights to drive human decision-making.
However, even now, the quality and success of a TMS implementation is still largely dependent on:
- Overall solution design
- Competitiveness of the rates negotiated
- Sophistication of the shipper’s overall application landscape
- And most importantly—data quality.
No TMS can tell you which mode is most practical if you cannot provide an accurate product weight. Nor can any TMS send your customer Amazon-like notifications if you cannot link up customer contact information to your shipments.
Shippers need hybrid-digital solutions to align transportation strategy and execution with business goals. Do not underestimate the importance of the human factor when selecting a logistics partner.
Manage TMS expectations with knowledge. Ask tough questions such as:
- Where is your TMS lagging behind the competition?
- What is your annualized up-time?
- Where does your freight spend fall relative to your existing client base?
- Do you expose real-time access to the database?
- What does your product roadmap look like?
- Will you sell your data?
And, of course, request demonstrations and get your hands on software before making any decisions.