Despite the rapid evolution of today’s supply chain and the proven cost-saving ability of a transportation management system (TMS), few shippers are using TMS software. In fact, only around 35% of shippers have a TMS.
Transportation management is gaining importance across all industries because of the wealth of opportunities available to reduce operating costs and improve service levels. Shippers who manually manage transportation are missing out on efficiency opportunities.
Every business is different and values certain technological investments over others. But due to several trends within the transportation industry, right now is the perfect time for shippers to successfully invest in and implement a TMS.
The relatively low cost of diesel fuel, combined with mild demand for trailer space, has created good pricing conditions for shippers. Freight carriers have to drop prices to stay competitive, but this won’t last long. The price of oil is on the rise, and a driver shortage is continually on the horizon. Both of these trends will force freight rates to skyrocket. Invest in a TMS now while transportation isn’t inflating operating costs, and you’ll be prepared to find cost savings when transportation rates rise — giving you a competitive advantage over your competition.
Cloud technology has completely changed the way businesses use and benefits from TMS software. With software-as-a-service (SaaS) TMS technology available, there is no upfront investment in the technology. Nobody needs to come and install the program. It’s available on the web, in a format where you simply pay for what you use, and there are never costly upgrades. These systems are easier to use than ever before, making ROI much faster and easier to achieve. The recent improvements to TMS technology mean that there’s less risk in investment, lower costs to operate and more benefits from the system itself.
Technology changes industries in fits and starts. While transportation has yet to be completely overhauled by technology, industries like video rental stores, which disappeared overnight, have been permanently affected. Drone delivery, 3D printing, e-commerce, and omni-channel fulfillment, self-driving vehicles, and rising consumer demands are all disruptive trends. Many industries face a future in which their distribution network will be entirely altered. Investing in a TMS now is important for the future. You’ll need a system in place to help manage transportation while it undergoes dramatic transformations.
The industry is in a sweet spot right now – a growing need for TMS technology coincides with a time of low costs and low-risk investments, and all of it near the tipping point of rising costs and extreme supply chain innovations.
Shopping for a TMS can be a daunting task. There are hundreds of options, and whether you are a small or large shipper, it can be difficult to determine which one best fits your needs. It’s one decision to invest in a TMS – it’s a whole other ball game trying to choose one.
Deciding to implement and then choosing a TMS is a big undertaking for any business. However, by making the decision now to invest in a TMS, and closely researching your options, you can start saving money on transportation right away and be prepared for a future in which transportation is changed dramatically.