Using a Transportation Management System to Improve Service

Transportation management systems (TMS) have a very strong return on investment (ROI) based upon a proven ability to lower freight costs. TMS solutions are usually bought to lower costs. But a TMS can also help drive better service, and the ROI associated with service improvements is often either ignored or grossly underestimated.

Service Expectations are Rising Expectations for quicker deliveries of smaller shipments are increasing. In a study with its Amazon Prime customers, Amazon found that merely displaying an icon touting same-day availability increased conversions by 20 to 25 percent!

The importance of offering same-day delivery in ecommerce is now widely understood. In 2015, Boston Retail Partners did a survey of over 500 retailers in North America. Only 14 percent of the retailers offered same-day delivery for items bought online. But an additional 41 percent of the retailers wanted to achieve this capability within five years.

Across a variety of industries, suppliers are being pressed to offer more frequent but smaller shipments. The 2017 State of Logistics report, authored by AT Kearney, shows that faster and more reliable modes have grown year-over-year. These faster modes are also forecast to continue to grow for the next five years. Slower or less reliable modes have had, and are forecast to continue to have, low or negative growth.