Adrian Gonzalez is the president of Adelante SCM, a peer-to-peer learning, networking, and research community for supply chain and logistics professionals.
After 19 years, what else can you say about transportation management systems that you haven't already said?
My wife asked me that question as I was heading out a few weeks ago to give a talk on transportation management systems (TMS) to a group of supply chain and logistics professionals at a CSCMP New England Roundtable meeting. It's a good question, one I hadn't stopped to think about before, so I reflected on it as I drove to the meeting.
First, I verified the math in my head (twice), and my wife was right: I've been an industry analyst now for over 19 years, most of that time focused on transportation management and TMS. I can't tell you how many TMS-related research reports, blog posts, videos, webinars, and presentations I've written or produced over the years, but it's a lot—enough to make you think I've said all I could about TMS already.
The reality is that I do repeat myself a lot because, despite the abundance of evidence out there about the benefits of implementing a TMS, many companies are still managing their transportation operations with spreadsheets and homegrown systems that are decades old. So, I repeat myself because some companies are new to TMS and are learning about the technology and its benefits for the first time, and some companies are like distracted children: You have to tell them over and over again until they finally listen.
The other reality is that there is always something new to talk about. The scope and capabilities of transportation management systems, as well as the vendor landscape, have changed significantly over the years, and the systems continue to evolve. The same is true for the transportation market and the types of challenges and opportunities that shippers and third-party logistics providers face.
Simply put, although transportation management systems have been around for decades, there are plenty of new things to talk about, too many to cover here. But here are some of the trends and developments that rise to the top for me.
Expanding scope and capabilities
At its core, the primary function of a TMS hasn't changed over the years: to help shippers and third-party logistics providers plan and execute processes in the transportation management lifecycle, including (but not limited to) procurement, optimization, routing and scheduling, load tendering, track and trace, freight audit and payment, freight forwarding and brokerage, and business intelligence and analytics.
The things that have changed are:
More powerful optimization capabilities:Â Thanks to the rise of cloud computing, along with advancements in the types of algorithms used, optimization engines today are able to solve more complex problems much faster than before. The scope of transportation optimization goes beyond load consolidation—that is, aggregating less-than-truckload shipments into truckload shipments. It also plays an important role in procurement, zone skipping, mode conversion, cross-docking and pooling, what-if analysis, and various other scenarios.
Increased control tower visibility: The line between TMS and control tower solutions has started to blur, especially when it comes to international, multimode shipments. Leading solutions go beyond providing visibility to shipments and assets. They also enable visibility to orders and stock-keeping units, and they incorporate optimization capabilities (to replan when exceptions occur) and collaboration capabilities (to facilitate communication and the exchange of data and information between trading partners). Leading solutions are also starting to embed machine-learning capabilities and leverage a broader set of data sources—including weather, traffic, location, and social media—to enable predictive capabilities, especially around determining more accurate estimated times of arrival (ETAs).
Improved user experience: In the past, many TMS user interfaces were crammed with too many features and too much information that users didn't need or want to accomplish their tasks. They had nonintuitive workflows that didn't align with the way users were accustomed to working (or with the way they wanted to work); or they forced users to open multiple windows and tabs, and click countless times, to accomplish what should have been a straightforward task. The good news is TMS vendors have started to think beyond features and functions and have started investing heavily, including hiring user interface (UI) and user experience (UE) consulting firms, to improve the usability of their solutions (both desktop and mobile), often with inspiration from social networking and consumer apps.
In addition to these three major changes, TMS providers have also significantly improved their solutions' mobile capabilities along with creating more flexible and configurable architectures that enable companies to drive their own innovation.
Changing vendor landscape
The technology is not the only thing that has changed; who's providing it and how it is delivered has also evolved. There have been many mergers and acquisitions in the TMS space over the years, driven in part by customer demands to replace multiple siloed applications with a single platform that can addresses multiple modes (including parcel and private fleet) and multiple geographies. There's still no single vendor that does it all well, but the market has come a long way in this effort.
Startups (such as Kuebix, Cloud Logistics, 3Gtms, and EmergeTMS) also continue to enter the market, leveraging their newer architectures as a differentiator, as well as new business models, and pricing strategies (such as "freemium" offerings, where a basic version is provided for free and users pay for more advanced functionality) that combine technology with managed services.
I hate putting TMS providers in categories or boxes because in many cases they either fit in multiple boxes or they don't fit any exactly right. But for the sake of simplicity, Figure 1 shows a snapshot of the current TMS vendor landscape. Providers range from vendors that offer a wide variety of supply chain applications (including warehouse management systems) to vendors that offer broad TMS suites (multimode, multigeography) to vendors that offer specialized solutions (a single mode or transportation process). Several third-party logistics providers also offer their own, internally developed TMS solutions.
There are also a variety of other technology solutions that are on the edge of TMS—meaning, they either extend or enhance the capabilities of TMS applications. These "on the edge" solutions focus primarily on transportation network design, modeling, or optimization, or they enable specialized transportation processes like real-time freight visibility, carrier connectivity, and freight-lane matching and collaboration. (See Figure 2.) The two that are getting the most attention today are real-time freight visibility and carrier connectivity.
Real-time freight visibility: A subset of control tower applications, this is one of the hottest segments of the TMS ecosystem and saw a couple of significant acquisitions last year (such as Descartes' acquisition of MacroPoint and Trimble's acquisition of 10-4 Systems). Most leading TMS vendors have partnerships with multiple freight visibility solution providers, such as those listed in Figure 2. Demand for these solutions is being driven by the need for more real-time and accurate visibility to orders, shipments, and trucks in response to more stringent customer service expectations, such as Walmart's "on-time in-full" (OTIF) requirements.
Carrier Connectivity: Electronic data interchange (EDI) still remains well-entrenched in transportation as the means for exchanging data between shippers, carriers, and other transportation partners. The future of carrier and trading partner connectivity, however, is application program interfaces (APIs) and web services (such as XML). APIs and web services provide more real-time data and visibility than EDI, along with other integration and maintenance benefits. Most leading TMS vendors have partnerships with multiple API-based carrier integration partners, including those listed in Figure 2. APIs for less-than-truckload (LTL) carriers are the most mature, but APIs for truckload, parcel, and rail are emerging, as well as APIs for status updates, transit times, and other data sets.
I don't know where I'll be in twenty years, whether I'll still be following the TMS market or not, but I'm pretty sure the technology will continue to evolve in response to market demands, and I'm pretty sure they'll always be something new to talk about.
“ExxonMobil is uniquely placed to understand the biggest opportunities in improving energy supply chains, from more accurate sales and operations planning, increased agility in field operations, effective management of enormous transportation networks and adapting quickly to complex regulatory environments,” John Sicard, Kinaxis CEO, said in a release.
Specifically, Kinaxis and ExxonMobil said they will focus on a supply and demand planning solution for the complicated fuel commodities market which has no industry-wide standard and which relies heavily on spreadsheets and other manual methods. The solution will enable integrated refinery-to-customer planning with timely data for the most accurate supply/demand planning, balancing and signaling.
The benefits of that approach could include automated data visibility, improved inventory management and terminal replenishment, and enhanced supply scenario planning that are expected to enable arbitrage opportunities and decrease supply costs.
And in the chemicals and lubricants space, the companies are developing an advanced planning solution that provides manufacturing and logistics constraints management coupled with scenario modeling and evaluation.
“Last year, we brought together all ExxonMobil supply chain activities and expertise into one centralized organization, creating one of the largest supply chain operations in the world, and through this identified critical solution gaps to enable our businesses to capture additional value,” said Staale Gjervik, supply chain president, ExxonMobil Global Services Company. “Collaborating with Kinaxis, a leading supply chain technology provider, is instrumental in providing solutions for a large and complex business like ours.”
For example, millions of residents and workers in the Tampa region have now left their homes and jobs, heeding increasingly dire evacuation warnings from state officials. They’re fleeing the estimated 10 to 20 feet of storm surge that is forecast to swamp the area, due to Hurricane Milton’s status as the strongest hurricane in the Gulf since Rita in 2005, the fifth-strongest Atlantic hurricane based on pressure, and the sixth-strongest Atlantic hurricane based on its peak winds, according to market data provider Industrial Info Resources.
Between that mass migration and the storm’s effect on buildings and infrastructure, supply chain impacts could hit the energy logistics and agriculture sectors particularly hard, according to a report from Everstream Analytics.
The Tampa Bay metro area is the most vulnerable area, with the potential for storm surge to halt port operations, roads, rails, air travel, and business operations – possibly for an extended period of time. In contrast to those “severe to potentially catastrophic” effects, key supply chain hubs outside of the core zone of impact—including the Miami metro area along with Jacksonville, FL and Savannah, GA—could also be impacted but to a more moderate level, such as slowdowns in port operations and air cargo, Everstream Analytics’ Chief Meteorologist Jon Davis said in a report.
Although it was recently downgraded from a Category 5 to Category 4 storm, Milton is anticipated to have major disruptions for transportation, in large part because it will strike an “already fragile supply chain environment” that is still reeling from the fury of Hurricane Helene less than two weeks ago and the ILA port strike that ended just five days ago and crippled ports along the East and Gulf Coasts, a report from Project44 said.
The storm will also affect supply chain operations at sea, since approximately 74 container vessels are located near the storm and may experience delays as they await safe entry into major ports. Vessels already at the ports may face delays departing as they wait for storm conditions to clear, Project44 said.
On land, Florida will likely also face impacts in the Last Mile delivery industry as roads become difficult to navigate and workers evacuate for safety.
Likewise, freight rail networks are also shifting engines, cars, and shipments out of the path of the storm as the industry continues “adapting to a world shaped by climate change,” the Association of American Railroads (AAR) said. Before floods arrive, railroads may relocate locomotives, elevate track infrastructure, and remove sensitive electronic equipment such as sensors, signals and switches. However, forceful water can move a bridge from its support beams or destabilize it by unearthing the supporting soil, so in certain conditions, railroads may park rail cars full of heavy materials — like rocks and ballast — on a bridge before a flood to weigh it down, AAR said.
The North American robotics market saw a decline in both units ordered (down 7.9% to 15,705 units) and revenue (down 6.8% to $982.83 million) during the first half of 2024 compared to the same period in 2023, as North American manufacturers faced ongoing economic headwinds, according to a report from the Association for Advancing Automation (A3).
“Rising inflation and borrowing costs have dampened spending on robotics, with many companies opting to delay major investments,” said Jeff Burnstein, president, A3. “Despite these challenges, the push for operational efficiency and workforce augmentation continues to drive demand for robotics in industries such as food and consumer goods and life sciences, among others. As companies navigate labor shortages and increased production costs, the role of automation is becoming ever more critical in maintaining global competitiveness.”
The downward trend was led by weakness in automotive manufacturing, which traditionally leads the charge in buying robots. In the first half of 2024, automotive OEMs ordered 4,159 units (up 14.4%) but generated revenue of $259.96 million (down 12.0%). The Automotive Components sector was even worse, orders 3,574 units (down 38.8%) for $191.93 million in revenue (down 27.3%). Declines also happened in the Semiconductor & Electronics/Photonics sector and the Plastics & Rubber sector.
On the positive side, Food & Consumer Goods companies ordered 1,173 units (up 85.6%) for $62.84 million in revenue (up 56.2%). This growth reflects the increasing reliance on robotics for efficiency in food processing and packaging as companies seek to address labor shortages and rising costs, A3 said. And the Life Sciences industry ordered 1,007 units (up 47.9%) for revenue of $47.29 million (up 86.7%) as it continued its reliance on robotics for efficiency and precision.
The warm waters of the Gulf of Mexico are brewing up another massive storm this week that is on track to smash into the western coast of Florida by Wednesday morning, bringing a consecutive round of storm surge and damaging winds to the storm-weary state.
Before reaching the U.S., Hurricane Milton will rake the northern coast of Mexico’s Yucatan Peninsula with dangerous weather. But hurricane watches are already in effect for parts of Florida, which could see heavy rainfall, flash and urban flooding, and moderate to major river floods, according to forecasts from the National Oceanic and Atmospheric Administration (NOAA).
As it revs its massive engines with fuel from the historically warm Gulf of Mexico, Hurricane Milton could possibly hit Tampa as a Category 5 storm, according to the FEWSION Project at Northern Arizona University, which tracks supply chains throughout the country.
With that much power, Milton could shut down the port and seriously disrupt the fuel supply into western and central Florida, which could then hinder recovery efforts. That’s because fuel supplies for much of Florida, especially central Florida, arrive from Texas and Louisiana through the Port of Tampa. That means that anyone who depends on generators or fuel for critical functions should plan for an extended period without access to fuel. And recovery crews and logisticians should consider bringing their own fuel when responding to the storm, FEWSION said.
One of those disaster recovery efforts will be led by nonprofit group the American Logistics Aid Network (ALAN), which is already mobilizing its forces for Hurricane Milton, even as it devotes other energy to the Hurricane Helene response. “In an ideal world we’d have plenty of time to focus all of our efforts on Hurricane Helene clean-up and recovery,” Kathy Fulton, ALAN’s Executive Director, said in a release. “But in the real world, major hurricanes don’t always wait for their turn. As a result, we are officially activating for Hurricane Milton.”
In the meantime, many weary residents of the region are thinking of moving to another part of the country instead of getting hit by vicious storms several times a year. Nearly one-third (32%) of U.S. residents aged 18-34 say they’re reconsidering where they want to move in the future after seeing or hearing about the damage caused by Hurricane Helene, according to a survey commissioned by real estate brokerage Redfin.
“Scores of Americans flocked to the Sun Belt during the pandemic because remote work allowed them to take advantage of the region’s relatively low cost of living. Some thought Appalachia was insulated from hurricane risk, not realizing that the area is prone to flooding and that hurricanes can sometimes cause flash flooding far away from the ocean,” Redfin Chief Economist Daryl Fairweather said in a release. “Americans are beginning to realize that nowhere is truly immune to the impacts of climate change, and we’re starting to see that impact where people want to live—even people who haven’t experienced a catastrophic weather event firsthand.”
The report is based on a commissioned survey conducted by Ipsos on Oct. 2-3, fielded to 1,005 U.S. adults. After making landfall in Florida in late September, Hurricane Helene wreaked havoc across Appalachia, becoming the deadliest storm to hit mainland America in almost two decades. In North Carolina, the death toll has surpassed 100 and the city of Asheville has been devastated.
Shippers and carriers at ports along the East and Gulf coasts today are working through a backlog of stranded containers stuck on ships at sea, now that dockworkers and port operators have agreed to a tentative deal that ends the dockworkers strike.
In the meantime, U.S. importers and exporters face a mountain of shipping boxes that are now several days behind schedule. By the latest estimate from Everstream Analytics, the number of cargo boxes on ships floating outside affected ports has slightly decreased by 20,000 twenty foot equivalent units (TEUs), dropping to 386,000 from its highpoint of 406,000 yesterday.
To chip away at the problem, some facilities like the Port of Charleston have announced extended daily gate hours to give shippers and carriers more time each day to shuffle through the backlog. And Georgia Ports Authority likewise announced plans to stay open on Saturday and Sunday, saying, “We will be offering weekend gates to help restore your supply chain fluidity.”
But they face a lot of work; the number of container ships waiting outside of U.S. Gulf and East Coast ports on Friday morning had decreased overnight to 54, down from a Thursday peak of 59. Overall, with each day of strike roughly needing about one week to clear the backlog, the 3-day all-out strike will likely take minimum three weeks to return to normal operations at U.S. ports, Everstream said.