Transportation management systems first hit the market in the early 1980s. Though the early versions may seem primitive today, they literally transformed many a logistics operation.
Should you still need convincing that Corporate America's transportation productivity has shot up over the years, all you need to consider is this: Back when transportation was deregulated in 1980, U.S. transportation expenditures totaled $228 billion, or a whopping 16.2 percent of gross domestic product (GDP). By 2003, U.S. transportation expenditures had dropped to a mere 8.5 percent of GDP.
What happened? Part of it, of course, was shippers' newfound ability to negotiate freely with carriers once the regulatory shackles had been removed. But another part was shippers' success managing these costs more effectively—more often than not with the help of automation, specifically that breed of software known as the transportation management system, or TMS.
Transportation management systems first hit the market in the early 1980s. Though the early versions may seem primitive today, they literally transformed many a logistics operation: users began achieving both efficiencies and cost reductions from day one. And in the intervening years, as both software and analysts grew ever more sophisticated, companies found they could kick their savings into high gear by integrating the TMS with other systems.
Today, it's been estimated that a company implementing its first TMS can expect to cut transportation expenditures by anywhere from 10 to 40 percent. Given that ransportation expenses typically account for more than 60 percent of a company's total logistics expenses, that's not exactly chump change.
At no time in history have those savings been so essential. It's no secret that trucking costs are soaring. A recent survey by Georgia Southern University, the University of Tennessee and others revealed that respondents spent a whopping 55.7 percent more on truckload freight during this past year than they did in the previous year, and there's every reason to expect this trend to continue. That only increases the pressure on logistics and supply chain managers to do whatever they can to hold down these expenses without compromising customer service. It's also putting pressure on them to automate. These days, a reliable and efficient transportation management system (TMS) is no longer a luxury; it's a necessity.
But what if you can't afford it? Traditionally, transportation management systems have come with a high price tag, sometimes costing upwards of $750,000.
For managers who don't have a lot of spare cash lying around, there's good news on the horizon. The more creative TMS vendors have ?modularized? their systems, making it possible for customers to buy only what they need or can afford, rather than sinking a lot of money into a full cradle-to-grave system. If all you need is a routing guide or an order and shipment visibility module, now you can buy just that.
These Web-based cafeteria plans can put good, workable TMS modules into the hands of practically any company. And they're expected to have broad appeal. Virtually all of the research indicates that managers with responsibility for transportation want a TMS whose operations they can understand, that they can install quickly and easily, and that they can add onto easily.
We're not suggesting radical change here. The basic blocking and tackling hasn't changed much over the years. A company still has to pick an order, stage it and find a carrier to move it from point A to point B. Today's shippers are still doing pretty much what they've always done. They're just doing it differently. And it's the TMS that is making the ifference.
The number of container ships waiting outside U.S. East and Gulf Coast ports has swelled from just three vessels on Sunday to 54 on Thursday as a dockworker strike has swiftly halted bustling container traffic at some of the nation’s business facilities, according to analysis by Everstream Analytics.
As of Thursday morning, the two ports with the biggest traffic jams are Savannah (15 ships) and New York (14), followed by single-digit numbers at Mobile, Charleston, Houston, Philadelphia, Norfolk, Baltimore, and Miami, Everstream said.
The impact of that clogged flow of goods will depend on how long the strike lasts, analysts with Moody’s said. The firm’s Moody’s Analytics division estimates the strike will cause a daily hit to the U.S. economy of at least $500 million in the coming days. But that impact will jump to $2 billion per day if the strike persists for several weeks.
The immediate cost of the strike can be seen in rising surcharges and rerouting delays, which can be absorbed by most enterprise-scale companies but hit small and medium-sized businesses particularly hard, a report from Container xChange says.
“The timing of this strike is especially challenging as we are in our traditional peak season. While many pulled forward shipments earlier this year to mitigate risks, stockpiled inventories will only cushion businesses for so long. If the strike continues for an extended period, we could see significant strain on container availability and shipping schedules,” Christian Roeloffs, cofounder and CEO of Container xChange, said in a release.
“For small and medium-sized container traders, this could result in skyrocketing logistics costs and delays, making it harder to secure containers. The longer the disruption lasts, the more difficult it will be for these businesses to keep pace with market demands,” Roeloffs said.
The British logistics robot vendor Dexory this week said it has raised $80 million in venture funding to support an expansion of its artificial intelligence (AI) powered features, grow its global team, and accelerate the deployment of its autonomous robots.
A “significant focus” continues to be on expanding across the U.S. market, where Dexory is live with customers in seven states and last month opened a U.S. headquarters in Nashville. The Series B will also enhance development and production facilities at its UK headquarters, the firm said.
The “series B” funding round was led by DTCP, with participation from Latitude Ventures, Wave-X and Bootstrap Europe, along with existing investors Atomico, Lakestar, Capnamic, and several angels from the logistics industry. With the close of the round, Dexory has now raised $120 million over the past three years.
Dexory says its product, DexoryView, provides real-time visibility across warehouses of any size through its autonomous mobile robots and AI. The rolling bots use sensor and image data and continuous data collection to perform rapid warehouse scans and create digital twins of warehouse spaces, allowing for optimized performance and future scenario simulations.
Originally announced in September, the move will allow Deutsche Bahn to “fully focus on restructuring the rail infrastructure in Germany and providing climate-friendly passenger and freight transport operations in Germany and Europe,” Werner Gatzer, Chairman of the DB Supervisory Board, said in a release.
For its purchase price, DSV gains an organization with around 72,700 employees at over 1,850 locations. The new owner says it plans to investment around one billion euros in coming years to promote additional growth in German operations. Together, DSV and Schenker will have a combined workforce of approximately 147,000 employees in more than 90 countries, earning pro forma revenue of approximately $43.3 billion (based on 2023 numbers), DSV said.
After removing that unit, Deutsche Bahn retains its core business called the “Systemverbund Bahn,” which includes passenger transport activities in Germany, rail freight activities, operational service units, and railroad infrastructure companies. The DB Group, headquartered in Berlin, employs around 340,000 people.
“We have set clear goals to structurally modernize Deutsche Bahn in the areas of infrastructure, operations and profitability and focus on the core business. The proceeds from the sale will significantly reduce DB’s debt and thus make an important contribution to the financial stability of the DB Group. At the same time, DB Schenker will gain a strong strategic owner in DSV,” Deutsche Bahn CEO Richard Lutz said in a release.
Transportation industry veteran Anne Reinke will become president & CEO of trade group the Intermodal Association of North America (IANA) at the end of the year, stepping into the position from her previous post leading third party logistics (3PL) trade group the Transportation Intermediaries Association (TIA), both organizations said today.
Meanwhile, TIA today announced that insider Christopher Burroughs would fill Reinke’s shoes as president & CEO. Burroughs has been with TIA for 13 years, most recently as its vice president of Government Affairs for the past six years, during which time he oversaw all legislative and regulatory efforts before Congress and the federal agencies.
Before her four years leading TIA, Reinke spent two years as Deputy Assistant Secretary with the U.S. Department of Transportation and 16 years with CSX Corporation.
National nonprofit Wreaths Across America (WAA) kicked off its 2024 season this week with a call for volunteers. The group, which honors U.S. military veterans through a range of civic outreach programs, is seeking trucking companies and professional drivers to help deliver wreaths to cemeteries across the country for its annual wreath-laying ceremony, December 14.
“Wreaths Across America relies on the transportation industry to move the mission. The Honor Fleet, composed of dedicated carriers, professional drivers, and other transportation partners, guarantees the delivery of millions of sponsored veterans’ wreaths to their destination each year,” Courtney George, WAA’s director of trucking and industry relations, said in a statement Tuesday. “Transportation partners benefit from driver retention and recruitment, employee engagement, positive brand exposure, and the opportunity to give back to their community’s veterans and military families.”
WAA delivers wreaths to more than 4,500 locations nationwide, and as of this week had added more than 20 loads to be delivered this season. The wreaths are donated by sponsors from across the country, delivered by truckers, and laid at the graves of veterans by WAA volunteers.
Wreaths Across America
Transportation companies interested in joining the Honor Fleet can visit the WAA website to find an open lane or contact the WAA transportation team at trucking@wreathsacrossamerica.org for more information.