opportunity knocks

Most businesses see state and federal regulations as burdensome and annoying. But for a lucky few, they also represent a huge market opportunity. Take the companies that sell transportation management systems (TMS), for example. Buoyed by interest from shippers scrambling to comply with the latest driver hours-of-service regulations or financial reporting rules, sales of their systems are on track to exceed $950 million this year, according to forecasts from the Dedham, Mass.-based consulting firm ARC Advisory Group.

Interest in TMS is coming right from the top levels of the organization, says Adrian Gonzalez, director of ARC's Logistics Executive Council. "Chief financial officers are becoming better educated about the role and impact of logistics on financial performance, driven in part by the need to comply with the Sarbanes-Oxley Act," he says. "Many companies, however, do not have a clear and accurate understanding of their transportation costs. [Those costs are] often bundled together with other costs and reported at an aggregated level, thus preventing companies from allocating transportation costs to specific products, customers or business units."

The ARC analysts don't see TMS sales slowing down anytime soon. Instead, the consulting firm projects that the market will continue to expand at a cumulative annual growth rate of 6.4 percent, reaching $1.2 billion by 2009.

Additional information on this study can be found at www.arcweb.com/res/tms.