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Global Transportation Management Systems Market to be Hampered by High Cost of Deployment

A transportation management system (TMS) is a software solution and a key component of supply chain management which is used to plan and manage the movement of freight. A transportation management system includes planning and managing all transportation and logistics activities. A transportation management system allows end-use customers to plan and execute transportation of goods in a cost-effective and reliable manner across the supply chain. The services offered by transportation management systems include freight consolidation, scheduling and routing, freight audit/payment, and load forwarding support among others.

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Increasing preference for Software as a Service (SaaS) based TMS solutions is the major factor driving the TMS market sales growth. The increasing demand for SaaS based TMS solutions can be attributed to the growth in intermodal transport across geographies. Furthermore, the need for replacing and updating existing traditional TMS solutions is expected to support the demand for advanced transportation management solutions. However, lack of awareness among end-users coupled with high deployment cost is the major inhibitor to the growth of the market. Integration of cloud computing and Radio Frequency Identification (RFID) technologies with supply chain management systems offer healthy opportunities for the growth of Transportation Management Systems Market over the forecast period. Integration of cloud computing technologies has ensured limited capital expense, low total cost of ownership, and greater real-time visibility across the supply chain operations.

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TMS market was dominated by on-premise solutions accounting for majority of the market share in 2013. Over the forecast period between 2014 and 2022, on-premise solutions are expected to exhibit moderate growth rate and are expected to be outpaced by on-demand solutions. Growing preference for SaaS-based solutions owing to the benefits such as greater visibility and high level of collaboration among supply chain participants is expected to drive the demand for on-demand software solutions. In terms of end-use applications, the TMS market was dominated by transportation and logistics vertical, accounting for over half of the market revenue in 2013. Evolving TMS capabilities and increasing demand for supply chain optimization is expected to drive the adoption of TMS solutions in transportation and logistics verticals.

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In 2013, North America was the largest regional market for transportation management systems, accounting for majority of the market revenue. The dominance can be attributed to the growing demand for SaaS-based TMS solutions in the region. Along with the proliferation of cloud-computing technologies, increasing use of RFID technology in the supply chain system has also fueled the market momentum in the region. Major industry participants include Descartes System Group, JDA Software Group, Manhattan Associates, Oracle Corporation, SAP SE, 3GTMS Inc, CargoSmart Ltd., LeanLogistics Inc., Precision Software Inc., and One Network Enterprises among others. These transportation management system vendors are focusing on expanding the capabilities of TMS solutions beyond traditional features to enable end-users to coordinate all their processes in the supply chain.

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