A global pandemic, surging e-commerce, modal shifts: Have TMS platforms risen to the challenge?
Faced with unprecedented demands and unforeseen challenges, transportation management systems have struggled to keep shipper supply chains fluid and functioning. In a world of unrelenting e-commerce growth and rapidly shifting shipper needs, change can’t happen fast enough.
Gary Frantz is a contributing editor for DC Velocity and its sister publication CSCMP's Supply Chain Quarterly, and a veteran communications executive with more than 30 years of experience in the transportation and logistics industries. He's served as communications director and strategic media relations counselor for companies including XPO Logistics, Con-way, Menlo Logistics, GT Nexus, Circle International Group, and Consolidated Freightways. Gary is currently principal of GNF Communications LLC, a consultancy providing freelance writing, editorial and media strategy services. He's a proud graduate of the Journalism program at California State University–Chico.
Pat Martin, a long-time executive with less-than-truckload carrier Estes Express Lines, remembers a not-so-distant past when the spring meant trucks full of barbeque grills descending on Home Depot locations nationwide and delivering pallets of grills to the stores. Consumers would then walk the aisles, pick their favorite, cart the box out to their car or truck, and take it home.
“Today a lot of that is changing,” says Martin, who is Estes’ corporate vice president of sales. “We still [move] a ton of grills the old way, but now, with e-commerce, it’s also drop-ship from vendors. There is more LTL and more final mile. It’s trickier and requires a lot more work—and a lot more visibility and connectivity.”
Shippers want to know now exactly where that shipment is, when it’s being delivered, and, “if there is a hiccup, when and how that’s going to be fixed,” he says, adding that they want tech solutions that are agile, can quickly spin up and go live, are easy to use, and can link up quickly with new apps as supply chain technology evolves.
“They want to be able to plan better, move faster, and make better decisions with data that is fresh and accurate today—not from two or three days or a week ago,” he notes. “And that’s putting pressure on carriers and their technology platforms to step up and deliver far more than just the shipment.”
It’s a confluence of market dynamics and shipper demands that is changing the landscape of what a transportation management system (TMS) is; how it’s bought, built, and deployed; how it operates; and how it evolves. The strategic TMS decisions shippers and carriers make today are based on a myriad of market factors and modal and information needs. “One size fits all/does all” no longer works.
And in today’s venture-capital–fueled market, new players taking innovative approaches and delivering effective new apps and tools are forcing traditional platforms to adapt as never before. They have to be able to collaborate and connect with emerging new apps and tools, and compete in a transportation technology landscape ripe for innovation—and disruption.
A PREMIUM ON AGILITY
In this market, “vendors are feeling the pressure to become more nimble in how they evolve, how they look at architecture,” observes Tom Curee, senior vice president of strategy and innovation for third-party logistics service provider (3PL) Kingsgate Logistics, whose brokerage operations manage over $100 million in freight spend annually.
In his view, a 3PL has to be equally nimble, agile, and strategic, able to quickly and seamlessly incorporate new tools as they reach the market and prove their value. His company has taken a blended approach to the TMS challenge, building out for its shippers a proprietary TMS for clients to tender their freight and Kingsgate to manage it.
On the carrier side, Curee’s strategy was to go outside and collaborate with multiple providers, stitching them together for carrier planning and execution. Kingsgate has partnered with three best-of-breed tech players to deploy a carrier portal providing planning and execution tools, rate benchmarking, and lane capacity analytics, respectively, using Trucker Tools’ Smart Capacity offering,DAT’s Ratecast product, and FreightWaves’ Sonar service. Application programming interfaces (APIs) then link the shipper platform and carrier portal so his team has a total view of the process.
Curee says the platform lets the carrier automate the process of matching loads to available trucks, plan out a week or more’s worth of multiple loads in preferred lanes, and use one-click booking, automated tracking, and digital document tendering. It also helps his team and his carriers identify and resolve capacity issues, reward Kingsgate’s best carriers with quality loads, and ensure it’s securing the most accurate, real-time market pricing. Importantly, Kingsgate also has kept in place traditional phone and email communications to support managing more complex or challenging loads—and keeping that personal touch between trucker and broker intact where needed.
A “360 VIEW OF THE SHIPMENT”
Recognizing this trend, many TMS developers are building out “more robust API engines, allowing users to bring more tools into their TMS, not just what was built by the vendor,” Curee notes. He sees this as a fundamental shift—and a positive for the industry—that is driving wider and faster adoption of new technologies, particularly in specific areas like visibility, freight matching, and optimization.
Another evolution has been the increasing affordability of TMS platforms, how they are coming into the market, and the channels they are using to engage customers and accelerate growth. “In the last few years, a TMS has become affordable for every shipper,” notes Estes’ Martin. He cites as examples cloud-based TMS offerings from providers like Kuebix and My Carrier. “You can get up and running very quickly, in some cases 10 minutes. And it’s free to the shipper. The carrier is paying for it.”
For Estes, the platforms provide another digital channel to engage the customer that helps reduce cost of service and is more efficient, shipper-responsive, and cost-predictable. The TMS provider earns a transaction fee from the carrier based on how many shipments are booked and moving through the system. “These fully built APIs let you digitize many activities, like tendering, creating bills of lading, and tracking electronically,” Martin notes.
He says Kuebix, for example, has gone out to all the major LTL (less-than-truckload) carriers and built common APIs for dispatching, imaging, tendering bills of lading, and tracking. To complement these platforms, Estes also is investing in strategic technology upgrades of its own. It recently launched a new tracking API for shippers and is working on a pickup API.
“We’re moving to more of a ‘push’ environment, giving them the latest status as soon as available,” says Martin, noting that this includes updated live delivery ETAs and notifications that tell the shipper how many stops away the truck is from delivery. “We are doing all we can to give that customer a 360-degree view of the shipment,” he emphasizes.
E-COMM–DRIVEN CHANGES
Bart De Muynck, vice president, transportation technology research at Gartner, notes the enormous impact e-commerce has had on the evolution of the TMS. That’s because “virtually every industry now has e-commerce shipments, whereas before it was mainly retailers.”
TMS platforms, De Muynck says, were initially created to solve for the larger first- and middle-mile movements, primarily with full-truckload and LTL freight. And while that is still an important segment, solutions are expanding to cover international and last mile as well as the exponential growth in parcel shipping.
He identifies three distinct market needs: last-mile delivery solutions, for shippers with complex last-mile requirements covering a multitude of delivery options; multicarrier parcel management, for shippers with high reliance on parcel shipping and dealing with the likes of UPS, FedEx,DHL, and regional parcel carriers; and vehicle-routing solutions, for shippers mainly using private fleets or contractors to deliver their e-commerce shipments.
“This landscape is de facto complex, and often there is no one way to skin the cat,” De Muynck says. “Most companies therefore might choose a mix of all these solutions.” He cites as well an important distinction: “It is not as much [about] functions or tools, but rather being more user-friendly, intuitive, easier and faster to implement, and easier to support,” he says, adding that TMS platforms need to serve as hubs that connect “networks of carriers, visibility partners, digital freight [marketplaces], and others.”
“IT NEEDS TO BE MORE GOOGLE-LIKE”
What is the No. 1 problem a TMS has to solve for today? “Visibility across the supply chain—all modes, all players. Integration, real-time data access, and system availability,” says Stephanie Silvestre, senior vice president of supply chain for Southern Glazer’s Wine & Spirits, a family-owned company and the nation’s largest distributor of beverage alcohol.
“There is definitely a need for TMS providers to become [more of] a neutral, all-comers connectivity hub,” she adds. Silvestre manages global supply chain operations that are multimodal, and roughly 50/50 domestic and international. The company is the 57th largest importer in the U.S.
She also cites the challenge of integrating service providers, shippers, and suppliers—and their data—into TMS platforms. “One of our biggest holdups is we don’t have all the information coming into our TMS from them, so the TMS can’t optimize and do what it was designed to do,” she explains. “Sometimes, TMS platforms can make that integration very cumbersome … it needs to be more Google-like.”
Another challenge is the sheer volume of data available and deciding what is “must have” versus “nice to have.” “We have to pick the 10 or 15 data points that really matter,” she emphasizes. “You can’t show up at [the carrier’s] doorstep and ask for 100 things; you will never get them. Ask for what they realistically can provide and what you need; then set up measures to hold them to it.”
She agrees that the world has changed with respect to the demands and expectations of e-commerce, how sensitive supply chains are to breakdowns, and how that impacts supporting technology—and the economy. It’s also brought to the forefront a fundamental question every company has to ask: Is managing freight a core competency of my company? “You have to figure out what you are, what your real strengths are before you answer that question. I see a lot of companies struggle with that,” she’s observes.
It really comes down to what is the vision for your company, Silvestre says. For Southern Glazer’s, the answer was to outsource its needs for TMS technology, which led it to expand an existing relationship with Ryder.
FOCUS ON THE LONG GAME
Managing supply chains with multiple product locations, carriers and modes, and ship-to locations is challenging in itself, but some in the technology world are making it more complex than it needs to be, says Satish Jindel, founder and chief executive officer of ShipMatrix, which provides freight data analytics and management services.
Particularly when it comes to parcel, Jindel, who was on the founding management team of Roadway Package System, which today is FedEx Ground, believes some providers are misleading their clients by “telling them we can optimize your costs by picking the right carrier for every package and trying to play the carrier rate game package by package. That’s insane,” he says.
“That in my mind is completely irrelevant and unproductive, and can create difficulties for the shipper.” Parcel transit times don’t change every day for every package, he notes. The focus should be on meeting volume criteria with a carrier—which ensures the shipper doesn’t miss out on discounts or rebates.
At the end of the day, Jindel says, shippers will get the best deal and service performance by making and keeping volume commitments to carriers. Truck lines as well have to live up to their shipper promises of capacity at a predictable cost—regardless of the market.
“That leads to partnerships where both have skin in the game, and both benefit—the carrier with predictable, plannable volumes, and the shipper with reliable capacity, rates, and service,” Jindel says.
Supply chain planning (SCP) leaders working on transformation efforts are focused on two major high-impact technology trends, including composite AI and supply chain data governance, according to a study from Gartner, Inc.
"SCP leaders are in the process of developing transformation roadmaps that will prioritize delivering on advanced decision intelligence and automated decision making," Eva Dawkins, Director Analyst in Gartner’s Supply Chain practice, said in a release. "Composite AI, which is the combined application of different AI techniques to improve learning efficiency, will drive the optimization and automation of many planning activities at scale, while supply chain data governance is the foundational key for digital transformation.”
Their pursuit of those roadmaps is often complicated by frequent disruptions and the rapid pace of technological innovation. But Gartner says those leaders can accelerate the realized value of technology investments by facilitating a shift from IT-led to business-led digital leadership, with SCP leaders taking ownership of multidisciplinary teams to advance business operations, channels and products.
“A sound data governance strategy supports advanced technologies, such as composite AI, while also facilitating collaboration throughout the supply chain technology ecosystem,” said Dawkins. “Without attention to data governance, SCP leaders will likely struggle to achieve their expected ROI on key technology investments.”
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.
Serious inland flooding and widespread power outages are likely to sweep across Florida and other Southeast states in coming days with the arrival of Hurricane Helene, which is now predicted to make landfall Thursday evening along Florida’s northwest coast as a major hurricane, according to the National Oceanic and Atmospheric Administration (NOAA).
While the most catastrophic landfall impact is expected in the sparsely-population Big Bend area of Florida, it’s not only sea-front cities that are at risk. Since Helene is an “unusually large storm,” its flooding, rainfall, and high winds won’t be limited only to the Gulf Coast, but are expected to travel hundreds of miles inland, the weather service said. Heavy rainfall is expected to begin in the region even before the storm comes ashore, and the wet conditions will continue to move northward into the southern Appalachians region through Friday, dumping storm total rainfall amounts of up to 18 inches. Specifically, the major flood risk includes the urban areas around Tallahassee, metro Atlanta, and western North Carolina.
In addition to its human toll, the storm could exert serious business impacts, according to the supply chain mapping and monitoring firm Resilinc. Those will be largely triggered by significant flooding, which could halt oil operations, force mandatory evacuations, restrict ports, and disrupt air traffic.
While the storm’s track is currently forecast to miss the critical ports of Miami and New Orleans, it could still hurt operations throughout the Southeast agricultural belt, which produces products like soybeans, cotton, peanuts, corn, and tobacco, according to Everstream Analytics.
That widespread footprint could also hinder supply chain and logistics flows along stretches of interstate highways I-10 and I-75 and on regional rail lines operated by Norfolk Southern and CSX. And Hurricane Helene could also likely impact business operations by unleashing power outages, deep flooding, and wind damage in northern Florida portions of Georgia, Everstream Analytics said.
Before the storm had even touched Florida soil, recovery efforts were already being launched by humanitarian aid group the American Logistics Aid Network (ALAN). In a statement on Wednesday, the group said it is urging residents in the storm's path across the Southeast to heed evacuation notices and safety advisories, and reminding members of the logistics community that their post-storm help could be needed soon. The group will continue to update its Disaster Micro-Site with Hurricane Helene resources and with requests for donated logistics assistance, most of which will start arriving within 24 to 72 hours after the storm’s initial landfall, ALAN said.