There is no question that two years of pandemic-induced chaos upended the freight and logistics markets, unleashing challenges both familiar and new to the industry. Across the supply chain, the major players—shippers, 3PLs (third-party logistics companies), brokers, and capacity providers—struggled to adjust and find solutions to unprecedented issues. Those encompassed everything from goods delayed in China to congested ports and rail yards to capacity constraints, sky-high freight rates, rocketing fuel costs, and a remarkable surge in last-mile deliveries powered by stuck-at-home consumers embracing e-commerce like never before.
At the forefront of the battle were providers of transportation management systems (TMS)—the repositories, connecting pipes, and critical pumps of logistics and transportation data and information upon which efficient supply chain flows depend. Such systems, used in one form or another by virtually every node of the supply chain, were not immune to pandemic-fueled disruptions. Like others, they had to adapt and, in some cases, reinvent themselves faster than ever.
If anything, the TMS landscape has become more complex and fragmented at the same time, notes John Janson, director of global logistics for SanMar, one of the nation’s largest providers of wholesale branded apparel, bags, and caps. More than ever today, TMS platforms “have to connect and work with my current systems, my existing data sources, and connect me quickly with new data sources and apps,” he says, adding “I’m not buying a McLaren sports car. I need a partner that does the [freight management] blocking and tackling flawlessly and can adapt as my business changes—[a solution that] covers 80% of my needs, then I can modify for the rest.”
SanMar is a major consumer of ocean, rail intermodal, truckload, less-than-truckload (LTL), and especially parcel delivery services. It manufactures in 24 countries, is a top 75 U.S. importer, has 10 distribution centers in North America, and pushes out “somewhere north of 100,000 parcel shipments a night,” Janson reports.
He currently uses a homegrown TMS platform coupled with parcel-audit and freight-payment partners to plan and execute transportation and manage his spend. In his view, the biggest hurdle to overcome in a TMS selection decision: “for [TMS providers] to boil it down to a credible, defendable ROI that I can take to my IT steering committee and say with confidence this is the value we will get out of this investment.”
The past two years of shippers and 3PLs scrambling to find capacity at any cost and piecemealing together transportation networks are over. Now the focus is on how TMS resources can support more effective and actionable business intelligence, quickly and easily connect disparate partners and data sources, provide real-time analytics, enable process automation, and support networks with high-quality carriers, notes Tom Curee, executive vice president at 3PL Kingsgate Logistics.
That network analysis relies heavily on “TMS and the large responsibility they have for acquiring and storing data,” he says. “That’s probably one of the most important things they are doing now.”
Kingsgate employs a blended, or “hybrid,” approach to its TMS solution, using a base in-house capability complemented by and integrated with third-party best-of-breed apps that support specific functions, like shipment tracking, real-time capacity visibility, and predictive freight matching, in this case, with software provider Trucker Tools.
“Flexibility is a huge ask nowadays,” observes Curee. “The days of rigidity in systems are gone.” The other big ask, he says, is access to more data and the ability to effectively cleanse, incorporate, and apply it in a distributed management ecosystem, as new data sources are emerging all the time.
Transportation management systems play an important role in providing the “connective tissue” and serving as a reliable, common “repository of record” for accurate, clean supply chain data, he notes. Third-party service providers are “consumed with how we leverage all [the data], organize it where it makes sense, and apply it to running the business—and serving customers better,” Curee says.
Especially in a technology environment where powerful third-party apps are seemingly popping up every day, the pressure is on for TMS providers to “be faster to integrate and leverage innovation,” he says. “Integration skill and capability is a huge need today,” Curee adds. And not just innovation in what the TMS has built itself, “but [also] being able to incorporate literally dozens of other niche best-of-breed providers that are carving out a market and providing a piece of the puzzle shippers want to use.”
As the saying goes, Mark Cubine, vice president of marketing and enterprise systems for McLeod Software, one of the largest providers of TMS solutions for carriers and 3PLs, has “been around the block” a few times. Two decades of experience in TMS software will provide that perspective. “The pandemic had very little hangover in our industry for 3PLs and carriers,” he’s observed.
“The [TMS] issues we were dealing with going into the pandemic are pretty much the same ones coming out.” He describes it as “a volatile period” but notes that, “at the end of the day, the problems facing the industry are little changed.” He cites issues such as fuel costs, driver recruiting and retention, truck parking, driver hours of service, and the bane of every trucker’s existence: excessive detention at pickup or delivery docks. Coupled with these are pricing decisions, lane and customer analysis, and optimally managing network capacity.
In Cubine’s view, the number one focus of any fleet-oriented TMS should be how it helps carriers and 3PLs “set up drivers for success.” It’s something “that the better carriers are being more mindful of,” he says. That requires trip-planning tools that can effectively match loads to driver availability and capability, recognize and account for the required HOS (hours-of-service) rest breaks, recommend optimal routes, create reasonable appointment windows, find the lowest-cost fuel, and identify available overnight parking and then adjust when exceptions or issues occur.
With electronic logging devices now ubiquitous across the industry, providing 24/7 accurate real-time location and time-on-task data, “we should never dispatch a driver on a load if they don’t have the hours to do it or if they can’t physically accomplish it,” Cubine emphasizes. “It’s all about keeping your promises to drivers” in terms of pay, working miles, operating safety, and maximizing hours of service and home time. “You have to know when you are not meeting that commitment to the driver and what you need to do to get back on plan,” he says, which is what today’s modern, integrated TMS platforms are designed to do.
Among the biggest challenges to keeping those promises: unwarranted or excessive driver detention. “A driver sitting at a dock waiting excessively for an unload is capacity wasted,” Cubine notes. TMS platforms have vastly improved their ability to track and quantify detention—and its costs—down to a single plant or warehouse. That data enable truckers and their shipper customers to know in real time when detention exceeds allowable limits and notify consignees what continued delays will cost them. And since the shipper pays the detention fees, they need to know nearly immediately when a consignee is failing to get that trucker out on time.
Cubine says that carriers also will use detention data to “blacklist” repeat offenders in order to avoid scheduling loads into facilities that consistently waste driver time. “Detention is the enemy of capacity, and of drivers earning what they deserve for their time and service,” he concludes.
If the pandemic had any lasting impact on transportation management systems, it was creating the demand among customers that TMS providers become more resilient, agile, and adaptable, notes Steve Blough, chief innovation officer and cofounder of TMS provider MercuryGate, which runs some $93 billion worth of customer freight spend through its products annually.
“It’s not a ‘within the four walls’ operation anymore,” Blough says. “We have to allow people to collaborate and work in ways we never thought of before,” which means building out tools that support remote work; integrating with a raft of new application programming interfaces (APIs), whose ranks grow every week; continuing to enable decades-old electronic data interchange (EDI) connections; and allowing for mobile app access and data capture, among others.
“The speed of change is much faster than it has ever been, and it extends across a larger application ecosystem, from first to final mile,” Blough notes. “You have to adapt without waiting for code changes or software updates,” he adds. That means building out TMS offerings where workflow changes and user configuration are easily enabled, are more flexible, and can be accomplished and implemented in a fraction of the time previously required.
“The holy grail now is actionable intelligence, with systems that pull together multiple … apps, platforms, and data streams into a central repository,” he says. Getting the integration right is the challenge; that’s the foundation for continuous delivery of accurate data that drives reliable, timely information, intelligence, and informed decisions, he explains.
MercuryGate’s offering provides planning and visibility with an execution layer, Blough notes. “So we are not just seeing things but also taking action on them—or the system recommends an action,” he says. “The goal is to have the system do as much of the heavy lifting as possible, in an efficient and accurate way based on rules and historical information,” with exception alerts flagging something that needs attention. The ultimate benefit is process automation that drastically reduces manual work and makes the most of available capacity. “We have folks running fleets with hundreds of trucks, using just two dispatchers,” Blough says. “That’s exciting to see.”And there’s more room for improvement, he believes, as the industry drives toward more true collaboration among shippers, carriers, and 3PLs. While the number of trucks on the road continues to increase every year, the percentage of those that are running empty or underutilized—some 30%—hasn’t really changed in decades, Blough notes. Those empty miles present both challenge and opportunity—for fleets as well as technology providers. “If we don’t get into a true collaborative world with truckload, we are never going to get out of these empty hauls, and the waste and emissions impact they represent,” he says. “And that’s the ultimate holy grail.”
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