Keywords: Transportation Management System, Planning and Execution, Fleet Management
A transportation management system (TMS) helps companies move freight from origin to destination efficiently, reliably, and cost effectively.
According to a new ARC Advisory Group study, “Transportation Management Systems Global Market Research Study”, the TMS market has grown briskly for a few key reasons. First, transportation management systems offer proven ROI; saving companies money by lowering their freight spend. Secondly, there are lower barriers to entry, allowing more companies to implement a TMS application.
Proven ROI for Shippers
Transportation management systems offer a strong ROI, primarily by helping companies save money by lowering their freight spend. In a TMS survey from 2011, ARC found that respondents indicated freight savings of approximately 6 percent with the use of a TMS application. Of these savings, nearly 60 percent of users indicated that less than 25 percent of the net savings were absorbed by the TMS. These freight savings can be attributed to lower cost mode selections, better routing, and better procurement negotiations.
Lower Barriers to Entry
The freight spend required to invest in a TMS solution is lower than ever. Historically, if a company did not have over $20 million in freight spend, purchasing a TMS was out of the question. The emergence of SaaS solutions, and less sophisticated on-premise applications, has reduced that number significantly. Now, essentially companies of all sizes can afford a TMS. This includes companies with as little as $1 million in freight spend.
More Information on Study and Supplemental Reports
For more information on this study, please visit our Market Research section.
ARC has two related client reports that are also available for purchase:
• “Return on Investment for Transportation Management Systems”
• “Managed Transportation Services vs. Transportation Management Systems: An ROI Analysis”
If interested in these reports please contact Gregg Starr for additional details ([email protected]).