Transportation Management System Market
Transportation Management System Market (Application - Electrical and Electronics, Industrial, Food and Beverage, Retail, and Transportation and Logistics; Software Deployment - On-Premise and On-Demand) - Global Industry Analysis, Size, Share, Growth, Trends and Forecast 2017 - 2025
Global Transportation Management System Market: Snapshot
A transportation management system (TMS) is a subset of supply chain management and is centered mainly on transportation and logistics. The increasing use of cloud computing technologies for managing supply chain activities is one of the major trends prevailing in the transportation management systems market. Cloud-based deployments generally need less customization and configuration. These two factors are driving down lifecycle costs, making web-based applications more attractive and appealing to shippers. Retailers across the globe have realized the importance of technology for achieving real-time visibility of operations to track products as they leave manufacturing facility and move through the supply chain. Thus, retailers are gradually moving away from platform-based solutions and are switching to cloud-based technologies. Cloud technologies enable retailers to process huge customer data faster, better match customer demand with a sales season, and offer personalized solutions. Thus, cloud technologies enable mass customization, which is of growing interest to both manufacturers and retailers.
The increasing preference for SaaS based TMS solutions is the major factor driving sales growth in the TMS market. Furthermore, the need to replace and update the existing and conventional transportation management systems 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. Nevertheless, the integration of cloud computing and Radio Frequency Identification (RFID) technologies with supply chain management systems will offer healthy opportunities for the growth of TMS Market over the forecast period.
The global market for transportation management systems stood at US$ 9,600.8 mn in 2016. Rising at a healthy CAGR of 13.6% from 2017 to 2025, the opportunity in this market is likely to touch US$ 30,044.1 mn by the end of 2025.
North America to Continue Leading Global Transportation Management Systems Market
On the basis of the geography, the global market has been categorized into North America, Europe, Asia Pacific, the Middle East and Africa and Latin America. North America, closely followed by Europe, reports a greater deployment of TMS solutions, compared to other regions. In 2016, North America held over 37.5% of the global market and is expected to remain dominant over the next few years. Along with the proliferation of cloud-computing technologies, the increasing use of RFID technology in the supply chain system has helped the market gain momentum in the region.
Transportation management system vendors in North America are collaborating with RFID technology providers to develop advanced, integrated solutions and, in turn ensure better returns on R&D investments. These factors are expected to seal North America’s dominance in the global transportation management system market through the forecast period.
Transportation and Logistics Segment to Register Higher Demand Rate
The integration of automation and functions such as real-time market monitoring, coupled with shippers’ desire to ensure supply chain optimization and visibility, has expanded the application base for transportation management systems. The electrical and electronics, industrial, food and beverage, transportation and logistics, and retail sectors have emerged as the prime application areas of transportation management systems across the world.
Among these, the transportation and logistics segment is expected to continue its dominance over the forecast, majorly on account of demand from third-party logistics providers, with road transportation service providers being the largest end-users of TMS solutions. In 2016, the dominant 67.5% of the global market, the transportation and logistics segment emerged dominant. Over the forecast period from 2017 to 2025, the emerging end-use verticals such as food and beverage, retail, and electronics and electrical are expected to witness the fastest growth, fueling market’s momentum. The increasing demand for supply chain optimization and visibility is expected to drive the adoption of TMS across these verticals.
Some of the major players in the global automotive transportation management systems market are: 3GTMS, Inc. (U.S.), CargoSmart Ltd. (Hong Kong), Descartes Systems Group, Inc. (Canada), Manhattan Associates, Inc. (U.S.), BluJay Solution (U.K.), One Network Enterprises (U.S.), JDA Software Group, Inc. (U.S.), Oracle Corporation (U.S.), SAP SE (Germany) and Precision Software, Inc. (U.S.) among others. These transportation management system vendors are continually striving to expand the capabilities of transport management solutions to enable end-users coordinate their supply chain operations effectively.
Cloud-Based System Emerging Trend in Transportation Management System Market Especially During Covid-19
The current Covid-19 pandemic has rewritten the rules of the games for almost all industries and around the world. The buzz of automation cannot be sharper, across various processes. The popularity of cloud-based systems is opening a new normal in the transaction management system (TMS) market, since they help in reacting to sharply changing demand actively. An attractive trend is the incorporation of AI-based SaaS technologies among end-use industries in the TMS market. These AI-based SaaS trends are most evident perhaps in the shipping industry. The growing adoption of SaaS-based transaction management system models is a key trend in the TMS market. The trend is particularly likely to expand the options for small to midsized companies in the shipping industry.
The changing industry dynamics in supply chain management has also caused disruptions in freight management process. In a way, this is augmenting freight management process, notably whose impact is being felt among different parties such as brokers, carriers, freight forwarders, and B2B partners. Advancements in the application programming interfaces (APIs) have also fueled notable strides in the TMS market. However, the deployment of SaaS-based transaction management system is expected to face several technological challenges.
Nevertheless, there is an unmet need, given the demand for advanced TMS to meet performance-critical functions during the Covid-19 times. The demand for cloud-based options for operational efficiency in supply chain is a key trend in the TMS market. TMS also acts a viable bridge between on-vehicle systems and data analytics and meets the need for real-time track-and-trace capabilities. The future of freight management will be driven by new trends in transaction management system market. The incorporation of artificial intelligence tools is expanding the avenue for providers of TMS solutions. The proliferation of apps that support these tools is a key trend in the transaction management system market.
Global Transportation Management Systems Market: Overview
A transportation management system (TMS) is a software solution and a key component of supply chain management used to plan the movement of freight. TMS solutions ensure effective communication between carriers and shippers, enabling them to share real-time information. Thus, logistics and transportation companies increasingly prefer TMS solutions. Leading vendors in the transportation management system market are increasingly investing in transportation management software to offer customers, especially transport and logistics companies, a cost-efficient solution capable of running their freight management functions effectively.
Growth in intermodal transportation coupled with the growing popularity of SaaS-based TMS solutions is primarily driving the growth of the global market. Further, increasing demand for advanced TMS solutions, replacing traditional outdated systems is strongly boosting the global market growth. Although updating supply chain applications is often a difficult task, the cost benefits achieved by advanced TMS solutions are driving the replacement demand. Updating TMS solutions ensures cost benefits when favored carriers are used on a regular basis or when favored procurement positions are negotiated and coordinated. However, lack of awareness among end users and high deployment costs are deterring the growth of the global market.
Global Transportation Management Systems Market: Segmentation
On the basis of end-use applications, the global TMS market is classified into: electrical and electronics, industrial, food and beverage, retail, transportation and logistics and others. Transportation and logistics held the largest share of the global market in 2016 and is expected to record steady growth from 2017 to 2025. Transportation and logistics companies across the globe are continually investing in transportation management software to improve operational efficiency, reduce cost, and enable themselves to run their freight management functions more effectively.
Furthermore, the report also segments the transportation management systems market on the basis of software deployment methods in to on-premise and on-demand solutions. On-premise solutions accounted for the maximum revenue share in 2016. Although, on-premise is expected to remain the largest application segment over the forecast period, on-demand solutions are expected to witness faster growth during the same period. On-demand TMS offers complete transportation planning, execution, procurement, and transportation visibility, improving transportation efficiency and achieving cost benefits. Thus, the global capabilities of on-demand solutions have ensured compliance by offering supply chain visibility and access to data meeting multi-regional regulations. With the shippers and transport companies increasingly preferring inter-modal transportation, the demand for on-demand solutions is expected witness robust growth over the forecast period from 2017 to 2025.
The regional analysis of the transportation management systems market gives in-depth insights into the current trends prevailing in different regions including North America, Europe, Asia Pacific, and Rest of the World (RoW). Although North America was the largest TMS market in 2016, Asia Pacific is expected to pose as a stiff competitor to the developed markets of North America and Europe. A favorable trade environment in the region is supporting the growth of the logistics network in the region, which in turn is encouraging the transport service and logistics companies to increasingly deploy transportation management solutions for managing fleets of vehicles, planning and execution, and enhancing operational visibility.
All the segments in the research report provides the market size and forecast data, highlighting the chief factors that are responsible for impacting and challenging the growth of the market. Thus, the transportation management systems market report includes a holistic analysis of the global market and provides growth estimates for the period from 2017 to 2025, keeping in mind the various factors affecting the market.
Companies Mentioned in the Report
The major players in the global automotive transportation management systems market are: 3GTMS, Inc. (U.S.), CargoSmart Ltd. (Hong Kong), Descartes Systems Group, Inc. (Canada), Manhattan Associates, Inc. (U.S.), BluJay Solution (U.K.), One Network Enterprises (U.S.), JDA Software Group, Inc. (U.S.), Oracle Corporation (U.S.), SAP SE (Germany) and Precision Software, Inc. (U.S.) among others.
The segments covered in the global transportation management systems market are as follows: