Ben Ames has spent 20 years as a journalist since starting out as a daily newspaper reporter in Pennsylvania in 1995. From 1999 forward, he has focused on business and technology reporting for a number of trade journals, beginning when he joined Design News and Modern Materials Handling magazines. Ames is author of the trail guide "Hiking Massachusetts" and is a graduate of the Columbia School of Journalism.
Logistics professionals are facing stormy economic conditions as they head into the winter holiday peak season. Between waves of Covid pandemic variants, a tight labor market, rising inflation, and climbing interest rates, the second half of 2022 promises unpredictable market conditions for those involved in moving freight around the country.
Those variables could make it hard to keep supply chains running smoothly, but companies may find answers in a key piece of technology that serves as the hub of the transport sector—transportation management systems (TMS).
In contrast to other logistics software applications—which tend to be narrowly focused on a specific function, like warehouse or yard operations—the TMS sits at the crossroads where truckers, brokers, and shippers meet. By acting as a marketplace for those three different interests, a TMS can help each party negotiate for what it needs to keep pickups and deliveries happening on time.
To pull that off, the TMS sector has been evolving at high speed in recent years, adding new technologies and capabilities that users couldn’t have predicted just five years ago. That evolution has created a market with a vast array of options tailored to different types of users. “TMS are like shirts, there’s one for every use case,” says Tim Higham, CEO at Florida software vendor AscendTMS. “For example, if you do drayage, maybe you need a different one than if you do LTL or last-mile. The industry has lots of niches and specialties, and is trying to automate as much as possible. But there’s enough room in this business for every company offering a TMS.”
TAILORED TO FIT
That’s starting to change. The latest TMS platforms are designed with the flexibility to allow different types of customers to use the same software—a nod to the diverse array of companies operating in the transportation sector. For example, while the trucking industry includes a handful of large fleets running hundreds of tractor-trailers each, the great majority have just a few vehicles. Today, more than 90% of U.S. motor carriers operate six or fewer trucks, according to the trade group the American Trucking Associations (ATA).
To accommodate the needs of both types of users, software vendors like Ascend offer systems that allow users to turn certain software features on and off. For example, a freight broker that owns no trucks would not activate the software’s vehicle asset management screen, while a pure freight carrier that doesn’t broker out loads would not switch on the brokerage screen.
In the turbulent market of 2022, that brokerage capability has become more popular. “Sixty-seven percent of our carriers have their brokerage features turned on, and that’s a new high for us,” Higham says. The reasons vary, he says. Some users are choosing that strategy because strong freight demand is producing so many loads that they can’t handle the business with their own trucks alone, while others could be suffering from the lingering driver shortage and are unable to find anyone to operate the vehicles they do have.
“A year ago, I would have said they’re getting more loads from customers but don’t want to expand their assets because they can’t find drivers. But now, fuel is so expensive that it can be easy to lose a thousand dollars per week while operating a truck, but you still want to keep those orders,” Higham says. Either way, today’s more flexible TMS software is allowing transportation providers to cope with market changes.
MAKING CONNECTIONS
Another way that transportation management systems are evolving to meet customer needs is by integrating with suppliers of related products and services. “The typical user lives in the TMS; it’s the first thing he opens at 8:00 a.m. If it’s a small company, he’s using it evenings and weekends, too,” Higham says. “And he wants to use it without opening other windows and cutting and pasting information.”
To support that type of intense use, Ascend has built integrations with about 70 companies that provide everything from liability insurance to driver payroll services. Many other TMS vendors have added connections to digital freight brokers (DFBs) to generate loads.
Such integrations are key to helping users eliminate inefficiencies, whether they run a fleet of 10 trucks or 100, says Dominic Leo, vice president of growth at Alvys, a California-based company that offers a cloud-based TMS. Operating a trucking business encompasses a huge range of tasks, from overseeing driver compliance, insurance, and vehicle maintenance to supporting track and trace, digital invoicing, and accounts-payable capabilities, he says.
To help fleet managers do all that within a single software platform, Alvys, like Ascend, has built integrations with a range of service providers. In Alvys’ case, those providers include businesses specializing in electronic payments (e-checks), telematics, accounting, and fuel cards as well as the factoring companies that enable speedy payments between business partners.
The best TMS platforms pull all those functions together in a simple, user-friendly interface, Leo adds. “You need an intuitive interface that allows companies to scale and supports a clear process from load creation through payment, so the TMS is not just a glorified spreadsheet.”
A NOD TO THE LITTLE GUYS
Those new capabilities are particularly important for users in a dynamic economy, where spot rates and contract rates fluctuate widely and bargaining leverage swings quickly between carriers and shippers. Large companies often have the resources to ride out the storm, but smaller firms may struggle to stay profitable, says Leo.
The need to support small customers has not gone unnoticed by TMS vendors. “2022 is fraught with uncertainty,” says Mark Carroll, executive vice president at Transportation Insight Holding Co. (TI), a combination of the digital freight solutions specialists Transportation Insight and Nolan Transportation Group (NTG). “The freight market has always been cyclical, and now you have inflation, a hangover from Covid, and market congestion. That makes it hard to forecast and plan for customer demand. These are uncertain times within the trucking market, so we’re focusing on how not to leave small and medium-sized businesses (SMBs) orphaned.” To serve those smaller shippers and carriers, he says, TI is developing “lightweight” TMS products.
The logistics technology industry has focused for years on enterprise-level users with deeper pockets, but a TMS can benefit users of any size and help them make their operations more efficient, Carroll explains. For example, TI’s platform offers improved visibility over loads in transit, paired with exception management tools that direct users’ attention only to the problems they need to solve, such as a truck that is behind schedule.
All this comes amid a broad industry shift toward cloud-based software, which relieves users of the need to manage their own computer servers and hire IT experts to maintain them. Instead, a business needs only an internet connection.
As one measure of the growing popularity of the cloud-based delivery model, TMS developer MercuryGate International Inc. in July said it had seen 40% growth in its cloud business, bringing the number of software-as-a-service (SaaS) deployments to 2 million since the start of 2021. “Our customers tell us they need a TMS that acquires and manages data better, faster, and easier to deliver actionable insight and move freight across their entire supply chain network,” MercuryGate President and CEO Joe Juliano said in a release. “That means a modern cloud-based capability that makes connections easy, accessible, and global among their customer, vendor, and supplier network. Costs are up, and our customers need to break down silos in the supply chain, improve visibility, … and reduce cost.”
Players and partners across the logistics and transportation arena are being stressed by changes in the post-pandemic market. But thanks to a rapid response from software providers, TMS applications are rising to the challenge with improved capabilities.
“There’s so much uncertainty right now: E-commerce has boomed, accelerated by pandemic; it’s uncertain how shippers can find capacity to meet consumer demand; and there are worker and material shortages,” TI’s Carroll says. “So we’re giving people the tools they need to help manage their day.”
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.