The popularity of the TMS platform is continuously growing. According to recent studies, almost 35% of the businesses are now using the platform for managing their transportation network. With increasing complexities of logistics and transportation, as the business grows, the need for transportation management systems can never be exaggerated. Technically, TMS enables better transactional and communication system to allow users to leverage from vast real-time data, makes easier decisions, and plan and strategise for optimal transportation solutions.
Top impacting factors
By component, the global transportation management system market constinues to be dominated by the solution segment as it help in optimising the overall supply chain process, thereby resulting in higher profit margins and growth. Digital transformation in the transportation industry has proven to encourage competition to improve any company’s ROI. Therefore, the introduction of digital from connected warehouses to new mileage delivery services ultimately increases the value and presence of TMS, transforming the old industry into an exciting place to drive change in community development.
Reduced costs for the business, the end customer, and automation of business operations for faster and more accurate billing and documentation drive the market growth. Moreover, advancement in adoption of cloud and IoT applications in planning and execution of TMS provide opportunities for the growth of the market. Furthermore, nowadays, retailers are inclining toward omnichannel systems that incorporate brick-and-mortar, online, mobile, catalog, and other sales channels under one umbrella. This increases freight transportation, and TMS helps in increasing visibility to all shipments under one user control.
Factors, such as colossal technological advancement across the transportation and logistics sector, create a positive correlation for the TMS market. Furthermore, exponential growth within the e-commerce industry has raised the demand for efficient transportation solutions, which is further estimated to emerge as a key driving factor for the overall market. However, there is growing data security concern to create a staggering effect on the market. Rising popularity of autonomous and connected vehicles coupled with increasing adoption of cloud technology and industry 4.0 are estimated to have a positive impact on the market’s growth.
Exponential growth of e-commerce
The e-commerce sector is witnessing rapid growth as more consumers are leveraging online platforms and smart devices for this purpose. As per the analysis conducted by Allied Market Research, e-commerce is on track to become the dominating force in all sales. According to Grant Thornton, e-commerce in India is expected to be worth US$ 188 billion by 2025 while manufacturers, distributors, retailers, reverse logistics managers, third-party freight brokers, and logistics services providers are working to keep up with the trend. However, the industry is still facing the issue of higher cost as some of the players have failed to integrate the e-commerce and transportation management system, which has resulted in an increased spending within the shipping capacity. This issue has raised the demand for effective transportation management system. The use of TMS in e-commerce allows shippers to leverage all modes of transportation, critical during peak shipping times and through the ongoing capacity crunch. TMS provides an extra opportunity to find the most cost-effective shipping options, and with e-commerce affecting 96% of all shippers, the need to leverage the benefits of e-commerce and TMS connectivity.
North America dominates the transportation management system market as the TMS industry is one of the major sectors in the North American landscape, providing the largest revenue worldwide due to large number of players and industry columns. The US and Canada are cooperating for a greater share of the transportation management system market. In addition, Canada is projected to be the fastest growing sector in the transportation management system market. North American countries continue to be more competitive and focussed on consumers, raising expectations for a better transportation management system. The transportation sector is a major factor in the supply chain as it relies solely on transportation professionals to achieve their financial goals, customer delivery commitments, and their profits. Asia-Pacific is expected to achieve a rapid growth rate due to growing international trade, especially in emerging economies such as China and India. In addition, in the Asia-Pacific region, smartphone penetration is increasing with non-renewable revenue. These factors contribute to the development of e-commerce in these areas. Therefore, a proper transport management system is needed to cater to the maximum number of customers. *