Papers

ROI is Driving Next Generation TMS Adoption

The next generation of TMS’s are providing new forms of optimization to continue to drive the ROI higher. By Chris Cunnane

April 17, 2017

A transportation management system (TMS) helps companies efficiently, reliably, and cost effectively move freight from origin to destination. Failure to get goods to and from a destination on time can lead to significant losses in revenues as well as cus-tomers.

The key to achieving success is to have a robust TMS in place, one which has a powerful op-timization engine and reporting capabilities. Additionally, the TMS must be easy to use, highly adaptable, fast to implement, and deliver a meas-urable ROI. This article will explore each of these more in depth and describe how a next generation TMS can improve your transportation management.

TMS Hot Trends

The transportation industry is certainly growing as commerce becomes more global in nature. There are a few major growth trends that are driving the TMS market. First is the fact that TMS has a strong and proven ROI.

A recent ARC survey on the ROI of TMS found that respondents indicated freight savings of approximately 8.5 percent with the use of a TMS applica-tion. Of these savings, 84 percent of users indicated that less than 25 percent of the net savings were absorbed by the TMS. These freight savings can be attributed to lower cost mode selections, better routing, and better pro-curement negotiations.

A second major trend driving the growth of TMS is lower barriers to entry. Historically speaking, without a freight spend in the $20 million and over range, implementing a TMS was not an option.

However, now, there are more options, especially cloud-based offerings, that allow companies with significantly lower freight spend to take advantage of a TMS. Moreover, these solutions are certainly not cut-rate applications. They provide the same robust features and functionality shippers need and expect from a TMS.


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