Arrivals and departures

Transportation Management (TMS) Technology report

Logistics Handling spoke with leading spokespeople within the vendor and analyst community about current trends and developments within the Transportation Management solutions space, including those related to the cloud, digital transformation and legislation. 

There have been several notable shifts within the transportation management (TMS) space since our last report two years ago, not least of which is the increasing move towards more cloud-based solutions. As Carly West, research director, Gartner, explains, many of the traditional TMS vendors are now offering cloud solutions and asking more of their existing customer base to move to cloud solutions versus on premise. “This shift can give an advantage for more frequent releases and updates while keeping customers on more current versions or even a single version of the solution,” she points out. 

West continues to see a major focus on visibility within the transportation space as continued disruptions impact the supply chain. With this in mind, she explains that companies in this space are witnessing expansion of visibility solutions globally and modally with more partnerships between visibility vendors and TMS vendors as well in order to offer a more seamless experience to customers.

Additionally, West is seeing shippers looking for ways to further digitise their collaboration with other stakeholders and automate different processes such as sourcing and procurement of transportation (done through either direct integration or through the partnering with third-party solutions including Digital Freight Models), booking and communicating with carriers, request dock appointments and access to the yard or obtaining electronic POD (Proof of Delivery). 

Pandemic disruptions  

Regarding key drivers for change, Oscar Sanchez Duran, senior principal analyst, Gartner, points out that there has been a broader demand for technology within the transportation industry as a result of the disruptions brought on by the pandemic. “From driver safety solutions and telematics adoption to electronic documents like eBOL/ePOD, to large demand for in transit visibility and predictive ETAs, the need to access additional capacity in a tight capacity market, to general automation and process improvement within the execution space of transportation activities,” he says. Duran also explains that organisations are having problems finding skilled workers in multiple areas – drivers, warehouse staff and even office workers.

“Hence, they are looking for solutions that can bring automation to their processes to increase productivity and cover those areas underserved with their own staff and reassign some of the current workforce to other areas to generate more value,” he comments. “This TMS consumer demand combined with vendors own R&D and road mapping is bringing more automation and technology adoption into the space.” 

Kiran Kumar V, research director TechVision, Frost & Sullivan, believes that, first and foremost, the advancements seen in cloud, and in particular SaaS, have been at the core of technology innovations seen in the logistics sector. “Cloud systems help manage all transportation related activities across the entire organisation for logistics providers through a centralised management architecture on a real time basis,” he explains. According to Kumar V, other technology innovations that are driving TMS adoption include IoT, AI and blockchain. 

In terms of key drivers for change, Kumar V maintains that the key driver for enterprises to adopt TMS is to provide a single layer of control for monitoring the lifecycle of transportation sourcing for its users. “It helps tackle supply chain complexity and allows shippers, suppliers and service providers to collaborate on a single platform,” he says, adding that it also improves accountability for each stakeholder in the transportation value chain. 

Another major benefit in Kumar V’s view is significant reduction in costs through process optimisation. He also cites evolving customer needs as a key driver. “Customers expect real-time updates on the shipment status, businesses need assurance that their goods are in safe condition during transport, while logistics organisations seek comprehensive data about their assets and networks to optimise efficiency and network utilisation,” he says. Additional drivers highlighted by Kumar V are technology breakthroughs such as the development of low-cost IoT networks and falling sensor prices. These, he explains, are also enabling large-scale IoT deployments in the logistics sector. 

Changing customer expectations

Bryan Ball, vice president, principal analyst supply chain management, Aberdeen Strategy & Research, explains that a recent Aberdeen Strategy & Research study indicates changing customer expectations and volatility are the top pressures that all businesses are facing today. These changes, he points out, have put increased pressure on transportation and logistics organisations when it comes to regulatory compliance, visibility across disparate systems, global trade complexity and the overall need to reduce global shipping costs. 

Data from a recent Aberdeen Strategy & Research survey showed that because of the pandemic there has been a lot of disruption to the supply chain. But in addition to the pandemic itself, looking at transportation in all its forms – everything from export, ports, multimodal deliveries from the ocean to another port, the ability of the port to process those goods, the trucks and drivers available to move the goods from the ports to the end destination etc. – some 29% of the respondents to the Aberdeen survey indicated that their carrier was unable to meet their demands.

“Interestingly, these findings came out just before the ports became overwhelmed on the West Coast of the US where there were around 100 or so ships that weren’t getting through,” explains Ball. “Part of the issue could have related to California’s tightening it its environmental standards, meaning fewer trucks and fewer carriers could comply with these new laws within a certain timeframe. Then, to exacerbate supply chain issues further, there was the additional issue of the Canadian trucker protests and truckers in other areas coming out in sympathy.” 

So, with these types of challenges, Ball believes companies now more than ever need to have in place a more robust and effective transportation regime. Ball explains that digitalisation is addressing the key issues stemming from changing customer expectations and demand volatility. There are several ways companies are responding to its value, according to Ball. First is the ability to track and trace shipments, which is critical when making and honouring customer commitments. “The volatility has a significantly negative impact on forecast accuracy, which makes agility and flexibility essential. Being on top of orders at all times is imperative to operating and nimble and responsive operation.”

Ball adds that saving money and improving the bottom line are also top reasons organisations are looking to digitise their supply chain operations. “Reducing inefficiency and shipping costs due to fuel increases, process inefficiencies and recovery from disruptions are all significant factors in cost reduction,” he says, adding that disruptions have been significant over the past year. These disruptions, he points out, include not only the pandemic but also ongoing concerns over shipping containers, port congestion, strikes, closures and customs delays.  

Maturity

The level of digitisation can be viewed by how seamless information flows between and across applications. Looking at the integration capabilities best-in-class companies have compared to others, Ball explains that the first is the real-time, continuous updates to a single supply chain platform. The second is similar with the exception of batch updates versus real-time, but they both map to a common supply chain platform to facilitate a common data model and seamless integration. Best-in-class companies are 77% more likely to have a common platform in place compared to the competition (53% versus 30%), according to the recent Aberdeen research. 

The next level of integration, Ball points out, is between applications, but with no unified platform. “This is more common for all others, and it does indicate that all companies recognise the need to speed up the flow of information. The value of the speed is extremely critical for the tracking and tracing of shipments, particularly in volatile market conditions. The closer to real time the information can be, the more responsive and confident users will be of their decisions.” 

Connectivity 

Mark Vos, international marketing manager, Manhattan Associates, explains that what Manhattan Associates is seeing in the market from its customers is a real focus on connectivity to all carriers, small and large. “Carrier networks and connectivity is essential for shippers managing their increasingly complex transportation networks to support shipment tender, visibility and invoice processing,” he says. “Typically, larger transportation companies already have the technology to provide the level of visibility, such as tracking messages, monitoring, with the shipper.

Whilst smaller companies are not able to provide this information due to cost, what we’re seeing is the smaller shippers leveraging our mobile app, which has been installed on the drivers’ own devices, to track drivers and monitor shipment execution. Additionally, there is no huge investment for the smaller transportation companies as there is no outlay for additional hardware. By using the Manhattan Active TMS mobile app, shippers are unlocking the market potential to work with the smaller transportation companies alongside larger transportation companies without jeopardising visibility.” 

Vos adds that Telematics has always been important over the past few years for fleet operators and transportation companies. “Telematics data has become more readily available through better connectivity, which allows customers to monitor the performance of a truck, the driver’s performance and behaviour as well as making changes and steps to become more eco-friendly,” he explains. “Monitoring driver behaviour, acceleration and breaking means that companies can supervise their transport network closely and adjust shipment planning to make the process a lot greener.” Other trends highlighted by Vos are:

• Smarter, self-tuning optimisation algorithms that can simplify deployment, maintenance and user ramp-up by requiring less manual decision points. With such algorithms, a system can fine-tune itself based on data and the problem it is trying to solve. 
• Extensible, microservices based platform – for agility, adaptability of the business. It allows fast changes to the system when the business changes…and with disruption to the supply chain at an all-time breaking point, the technology that runs operations matters. Technology needs to allow for adaptation when the business needs it. Not all cloud-based software can do that. 

In terms of some of the key drivers for change, Vos considers that transportation networks are becoming more complex and regulated, which means more complex decision-making. “Manhattan Active Transport Management is supporting shippers with these planning decisions, whereas, in the past the decisions were manual planning decisions based on long-term experience,” he says. “Manufacturers, wholesalers and retailers need to be able to respond to new consumer demands, and with this, leaning and relying on a reliable TMS solution, which allows shippers to adapt quickly and seamlessly.”

In addition, Vos makes the point that the COVID-19 pandemic has exposed the fragility of many supply chains and importance to dynamic planning and visibility to manage shifts in buying and delivery patterns. Alongside this, Vos maintains that changing (environment) legislation fuels more complexity, so compliance and cost-effective response are essential to shippers to meet their overall business objectives. 

Digital transformation

Philip van der Wilt, VP EMEA, Samsara, considers that the industrial and transportation sectors are still in the early stages of their digital transformation. “However, the proliferation of Internet of Things (IoT) connectivity, cloud computing, and AI is accelerating the opportunity to digitally transform physical operations,” he says. “We’re seeing a data-focused approach to fleet management come to the fore, as companies look to gain real-time visibility across production facilities, remote assets, fleets and end-customer services.” 

Regarding some of the key drivers for change, van der Wilt believes the IoT and data-driven approach is proving to be instrumental to sustainability strategies, as reducing emissions becomes a global priority. “Investors, government regulators and companies around the world are focused on sustainability to reduce carbon emissions and limit global warming – and a big part of that work will focus on transportation,” he says. “However, transportation and operations leaders are feeling the pressure, with Samsara research revealing that 78% agree they have greater responsibility to prioritise sustainability efforts than other industries.”

“Real-time data is critical to reducing the environmental impact of logistics and transportation and technology is advancing to overcome the barriers to sustainability. This goes beyond simply monitoring carbon emissions and tracking fuel usage to encompass aspects such as driving style, engine idling, and optimising routes. Accelerating electric vehicle (EV) adoption is a priority for many firms, but this must be part of a broader EV strategy to optimise the fleet, for example by introducing EV routing and charging maps, and setting up off-peak charging schedules.”

Benoît Gruber, director of product marketing TMS, Alpega, makes the point that over the past decade the demand on B2B integration for the logistics sector has required a huge amount of interconnection between different partners. “Modern application design has to fulfil several criteria regarding scalability, extensibility, exchange with major enterprise business solutions and IoT devices, fast or even self-onboarding of clients, and, last but not least, reliable access – anytime, anywhere,” he says. “Most of the points will be covered only by a cloud-aware (better yet, cloud-native) software solution which can be addressed/treated in a device-independent manner.” 

Integration 

In terms of the relationship between the more field-based TMS and the back-office systems they integrate with, what do our commentators feel have been some of the key recent developments? Gruber explains that the closer integration between different software systems and a fast data interchange can lead to more transparency, cost savings and better resource utilisation. “At the moment, most of the software solutions are still on a synchronous way of data-processing. This paradigm is already changing and will be even more in the future by adding more complexity (trade-off) in data processing.” 

Vos highlights one key development as a focus on API connectivity and minimising the process boundaries, which will enable planners to support continuous optimisation, to postpone decisions or apply last-minute changes. “This means that customers are more connected than ever before,” he says. Vos also points out that there is a need for better visibility, which will provide new opportunities to achieve better efficiencies upstream and downstream (WM resource planning/shipping/receiving, + smoother Yard ops). He has also seen an increase in the use of digital freight brokers to support shippers to manage transportation capacity constraints.

What have been the key benefits for the user in the wake of these developments? Gruber comments that there is an ongoing transition from partially online to ‘always on’. Connectivity is a key player in business as well, in his view. “It's an expectation that users already have, and modern software solutions need to offer this connection culture,” says Gruber. “This fact is even more important in logistics, where live tracking of goods is ‘normal’ to establish reactive systems and participating in all benefits a fast(er) reaction in processing offers.” 

Vos comments that Manhattan Associates has simplified the TMS user experience for planners and drivers. “Manhattan Active TM offers an intuitive interface with an adaptive design that offers the same experience across different form factors and devices,” he says. “The user interfaces are interactive, easier to learn and understand, therefore minimising training effort and instant productivity gains for both planners and drivers. Onboarding new drivers has never been easier with the new mobile app, which can be installed on their own devices.” 

Connected devices 

Do our commentators consider that mobile computer functionality or form factor has evolved in terms of offering greater benefit to transportation professionals? According to Kumar V, connected devices are revolutionising different industries, and the logistics sector is no exception. “Connected devices including mobile apps are becoming an essential part of TMS by providing users with real-time insights in order to make the right decisions,” he says. Kumar V adds that connected devices offer several benefits particularly in transportation management, such as in scheduling, freight management, fleet tracking, understanding road conditions, weather, routing, monitoring driver behaviour analysis. Also, Kumar V believes real-time tracking of vehicles/ transport telematics systems are becoming more popular. He points out that they help open up new horizons for logistics businesses. 

West believes there is a demand in general for more information on the go and the transportation space is no exception for that. “Notifications and alerts for exceptions and issues to mobile devices are certainly becoming more of the norm in the transportation technology space,” she says. “There are also two sides to the coin here, there is one part of transportation professionals that love technology due to all the information they can gather from it and how it helps in the daily tasks, but there is another part (typically older drivers) that hates it, as technology sometimes can feel intrusive (e.g. in cabin cameras, route tracking, etc.). However, in most cases technology in transportation is helping providing insights, higher levels of comfort to the driver and is helping improving safety on the road.” 

Legislation 

Have changes in transportation legislation, either locally or globally, influenced the development of TMS over the past year or so? “Absolutely,” says Vos. “Legislations, locally and nationally affect companies’ processes. Has this slowed anything down? No. If anything, companies are relying on easy configurable TMS solutions to comply quickly with changing legislations. Compliance with CO2 emission standards has become a standard requirement for shippers and transportation companies to plan cost-effective and sustainable shipments. Legislation related to hours of service and safety will continue to influence new developments of Transportation Management Systems.” 

Gruber explains that with a main office in Brussels, Alpega Group keeps a very close eye on upcoming EU legislation regarding transportation. Gruber considers that one of the key developments recently is carbon taxation. “Following policy discussions at the IPCC and the COP26 summit last year, it’s very clear that legislation around decarbonising logistics is in progress and ramping up,” he says. “We see this as a positive: first, because it’s going to have a real impact on climate change; second, because we built Alpega TMS to enable companies to measure and reduce greenhouse gases throughout their transportation networks. For companies, new legislation is going to push CO2 reduction from a nice-to-have to a must-have. We already offer a best-in-class toolkit for decarbonizing logistics, and we’re committed to the kinds of continuous improvements that ensure we remain the ultimate carbon reduction solution.” 

Duran points out that there are some legislation-related impacts on the horizon, such as eCMR in Europe that will driver more adoption of electronic documents and the ELD requirements expanding into Canada that will drive more adoption of telematics devices in trucks. Additionally, he highlights newer legislation related to sustainability, such as Low Emission Zones in some cities in Europe that are influencing some vendors to include capabilities related to the management of electric vehicles like battery level indicators or charging station maps. “These regulations as well as customer demands, are influencing TMS vendors to include more analysis capabilities to monitor carbon emissions in transportation operations,” he explains. 

Kumar V reflects that the recent episodes of chaos that were witnessed in supply and distribution have led to a new wave of discussions, which are certainly influencing regulation trends and pushing for increased government intervention in the logistics sector. However, he adds that the impact on TMS is limited. “One example could be the ongoing headwinds towards stricter emission norms,” he says. “This has led to a growing demand for digitalised services and operations to improve back-haul utilisation and better overall operational economics.”

Differentiation 

What are some of the current key functionality differentiators within the TMS space? Kumar V states that Frost & Sullivan believes an innovative TMS that delivers end-to-end visibility with a connected ecosystem and provides a seamless flow of information across stakeholders will clearly differentiate from the competition and position itself as a leader in the market.

Gruber makes the point that the TMS market is filled with specialised transportation management software offerings. “Many of these are ideal for one node or function of a transportation network, but there’s a material difference between these kinds of solutions and a true end-to-end TMS, which is what Alpega is,” he says. “An end-to-end TMS is the only way to ensure that all of your systems are exchanging data and deriving meaningful improvements from that process.

The more complex the network, the greater the benefits. We often point to the 25% that companies can save on transportation costs with our solution, but there’s a lot more beyond that number. We deliver the same kinds of companies up to 87% savings on process costs – and that’s something you only get with an end-to-end TMS. Alpega TMS is end-to-end, but it’s also unique in the fact that clients can choose which modules to implement. Clients get everything they need, nothing they don’t, and the ability to scale up any time.” 

Future development 

What might be the next innovations/developments to look out for over the next year or two? West and Duran highlight continued global expansion for many vendors, such as TMS and real-time transportation visibility along with a continued focus on optimisation and process automation within the transportation technology space. They add that there will be more of a focus for digitising processes that are currently manual, such as procurement and documents and ideally a more network-focused approach to optimising transportation operations and better utilising the limited capacity available. They also consider that advancements in the inclusion of technologies such as AI, machine learning or advanced analytics should play a big role in the further automation and digitisation of processes. 

Kumar V believes we will continue to see more adoption of AI/ ML and Analytics technologies to offer accurate and predictive assessment of potential delays and disruptions to customers; and adjust routes and capacity accordingly. “Beyond asset connectivity and real-time monitoring, with data getting commoditised, the real value lies in offering ‘intelligence-as-a-service’ and business models around the same (data monetisation) are likely to emerge and drive revenue generation in the coming years,” he says. 

Van der Wilt believes the electrification of the transportation sector will continue to gain momentum. “More than six million commercial electric vehicles are expected to be on the road globally by 2025,” he says. “We’ve already seen the range for personal EVs jump from 60-70 miles on a single charge to 200-300+ miles, and these improvements will lead to new opportunities for commercial vehicles.”

Van der Wilt adds that data can play a key role in helping leaders decide where to start their transition, and which vehicles and use cases are the best candidates for EVs today. “By taking a data-focused approach to fleet management, leaders can pinpoint which vehicles to replace by looking at metrics like lifetime usage and average daily range,” he says.

Gruber explains that one development Alpega is tracking closely is how best to integrate data-driven planning capabilities with execution. “A lot of transportation management solutions offer a control tower view, and just as many offer robust scenario building tools, such as a supply chain digital twin,” he says. “But unless the two are in meaningful communication, companies will leave money on the table. This is something we’re hearing from the latest Gartner research, but it’s also a focus of our product development roadmap: making it easier and faster to connect planning and execution.” 

In Vos’s view, the next innovations and developments within TMS will focus on cost-effective and sustainable transportation planning, optimisation and execution. He believes shippers will want to maximise the potential of the connectivity and visibility improvements. Vos also maintains that the ability to support continuous planning optimisation across all transportation modes simultaneously will be fundamental to deliver on cost and sustainability goals effectively across the entire transportation network for all orders. Vos adds that using better/historic data from outside sources to continuously improve the transportation plan (transit times, dwell times, congestion info) will continue to develop as a trend. He believes visibility alone is not enough.

Vos explains that Manhattan Associates’ expectation is an increase in emission (CO2e) based transportation planning optimisation. This, he points out, is to maximise the optimal utilisation of transportation equipment and carrier services to reduce their carbon footprint and maximise the investments in environmentally friendly equipment and modes of transportation meeting corporate and governmental emissions targets.

Vos also comments that cloud-native microservices architecture, such as Manhattan Active Transportation Management, will enable shippers to remove traditional functional boundaries between other business applications. “Manhattan Active Transportation Management is the first enterprise SaaS TMS solution to support personalisation extensions without ever impacting future updates as never needs upgrading,” he says. “The ability for shippers to quickly leverage new functions and innovations will provide the business an important competitive advantage whilst responding to constantly changing demands within the market.”

Changing user requirements 

Are there likely to be further changes with regard to end-user requirements over the coming year or two? Gruber points out that real-time visibility is becoming a requirement for many of Alpega’s clients. “In fact, when we surveyed business leaders about their must-have features in a TMS, 70% indicated real-time visibility as most crucial,” he says. “Fortunately, we’re prepared: we partner with best-in-class real-time visibility solutions like project44, Shippeo and FourKites to provide real-time visibility to a growing list of clients. We have reason to believe that real-time visibility will be a priority for a lot more companies in the near future.”