Managing transportation in times of tight capacity and high rates
Busy times for all of us and in particular supply chain managers who are dealing with capacity constraints, delays, the rise of e-commerce, forecasting in this crazy environment, identifying and analyzing data, and putting the data to use in strategies.
Technology is playing a big role but one area, in particular, that I’ve always found interesting is transportation management services (TMS). To me, this technology tool has always been a no-brainer and I’ve always been surprised by survey results showing low adoption rates. Until now. The impact of COVID-19 on supply chains is astounding and has resulted in more shippers acquiring more technology solutions, cloud-based in particular, including TMS.
No matter the mode of transportation a shipper uses, the shipper is paying more for it, that is, when they can find space. As shippers move past COVID-19 related closures, inventory replenishment has become a focus.
To satisfy inventory needs, demand for imports has been on the rise since June of last year. However, the demand has impacted every mode of transportation – ocean, air, truck, rail, and parcel carrier.
As such, managing transportation has become a priority as shippers face delivery delays and capacity constraints.
According to Gartner analyst Bart De Muynck, "the transportation management system (TMS) market was already growing, but when the pandemic emerged, logistics, transportation, and supply chain execution suddenly took on an even greater role in the overall supply chain… up until that point many shippers still looked at transportation like the tail of the dog with much more emphasis being placed on supply chain planning and procurement."
Indeed, shippers are embracing TMS to book and schedule shipments, decide on the optimal mode of transportation needed for a shipment, track shipments and much more. TMS has come a long way since its early days.
Apparel brand, Carhartt struggled with limited routing visibility and transportation costs were difficult to manage. After implementing Manhattan Associates’ TMS, transportation was optimized, and costs were better managed.
“The TMS market continues to be an active one for us as customers either move older on-premise deployments of TMS to the cloud or adopt a new TMS for the very first time,” Eddie Capel, president and CEO of technology provider, Manhattan Associates, said during the company’s first-quarter earnings call.
I recently chatted with Ron Lazo, vice president of professional services at Manhattan Associates, for an upcoming Air Cargo World podcast and I asked Ron what his customers are telling him about their current and future transportation needs.
“Customers want data,” Ron said. Furthermore, “they want to be able to predict more accurately transit times or maybe recommend alternative delivery routes during high traffic periods or maybe they want to identify shipments that are at risk in terms of on-time delivery or they need to recalculated at a different estimated time of arrival and they want to do it all proactively,” Ron told me.
To help with analysis, Ron said that Manhattan Associates has a modeling service that assists customers model certain transportation scenarios to test new ideas and challenge assumptions before they implement a strategy.
Transportation management systems (TMS) have evolved over the years and as supply chains become more intricately woven, the need for such systems are needed more than ever.
Research firm, Gartner forecast the global TMS, market to grow to $2.11 billion in 2024, a 60% growth from 2019.
For the third year in a row, Manhattan Associates was named to the Leaders quadrant in the latest Gartner Magic Quadrant for transportation management systems.
For more on Manhattan Associates’ TMS and other supply chain solutions, be sure to check out Momentum, Manhattan Associates supply chain and omnichannel customer event on May 25 -27.
If you can’t make the event, be sure to check in on my Twitter account (@cmroberson06) for thoughts and updates. I’ll be following the event as I support home-town-based Manhattan Associates.
- Cathy
For more of my writings, check out the following recent stories:
Cyberattacks threaten supply chains, Air Cargo World (Subscription required)
Forwarders benefit from tight capacity, high demand during Q1, Air Cargo World (Subscription required)
Canada Post on making e-commerce airfreight profitable, Podcast, Air Cargo World (Subscription required)
Asia-US peak air cargo surcharges rise on soaring B2B demand, Journal of Commerce