Bart DeMuynck has seen transportation management systems evolve from multiple viewpoints over his career. His first experience came with Penske Logistics implementing a transportation management solution (TMS) for its contract logistics business in Europe, then as a tech user in business operations for Frito-Lay, then as a senior analyst evaluating supply chain technology for Gartner, and later as chief customer officer for project44, one of the industry’s largest visibility platforms.
He’s watched the industry navigate through several boom-and-bust cycles, particularly in the past three to four years as private equity and venture capital money flooded the market with dozens of startups.
And while many of these startups promised to be the “next cool thing” that would transform and even disintermediate various parts of freight management, only a few actually delivered. Many rocketed into prominence only to flame out as the economy settled into its post-Covid behaviors and the freight markets cratered, from which they are still recovering.
Nevertheless, DeMuynck, who now runs his own tech consulting firm, sees transportation management software and related apps and platforms as a market primed to surge once again. “Logistics tech is still hot,” he says. “The difference today is that users don’t want to know about the ‘next cool thing.’ They want a solid business case that has true ROI and backs it up with performance.”
The biggest focus he’s found from talking to users is on going back to basics. “Give me a TMS that is more dynamic, agile, cloud-based, and easier to use. Apply AI to help with predictive analytics and preemptive action,” he says. “There is still waste in the blocking and tackling of running a trucking company, managing freight as a broker, running a back office, or managing shipping operations inside a business. Driving more efficiency and automation into these processes is where TMS platforms need to take out cost and create more value.”
OPPORTUNITIES STILL ABOUND
Mark Cubine, vice president of marketing for TMS provider McLeod Software, also sees further business process automation as a recurring demand from truck operators, shippers, and brokers. For those initiatives to be effective, however, he emphasizes that users need a strong core TMS, “that base foundation to do all the common things, the basic blocking and tackling, if you will, in a configurable way to fit their business.”
At the same time, TMS providers also must “embrace innovation” and provide a platform “that allows users to take advantage of all those emerging best-of-breed services and solutions,” he says.
In McLeod’s case, that includes collaboration tools and a portfolio of over 150 integrated partners with whom it has built application programming interfaces (APIs) to streamline integration and connection with other apps and new tools as they come on the market.
Some examples of third-party integrated partners would include app providers like Trucker Tools, which specializes in freight matching, automated load booking, and shipment tracking; Qued, which offers load appointment scheduling; Parade, which provides capacity planning management for freight brokerages and third-party logistics service providers (3PLs); Trimble, for its mileage, trip planning, and ELD (electronic logging device) products; and Alpine 1, which offers vehicle maintenance solutions.
All such integrations are intended to provide connections that allow for data sharing and incorporate specific services to complement and extend the capabilities of the base TMS platform.
“Fast, effective integration tools through open, pre-built APIs have become table stakes,” Cubine says. “Those are the best opportunities to take advantage of new products and innovations quickly. That has real competitive advantage; allowing companies to steer some of their own innovations [through your platform] has a high payoff.”
He also sees opportunity in helping carriers and brokers deal with “unstructured data.” Many shippers, small brokers, and carriers still use email or other manual methods like web portals (where data must be keyed in) to send shipping instructions or details on when and where truck capacity is available. McLeod and other TMS providers have been developing “natural language” tools that pull the unstructured data from such emails, convert it, and deliver it as structured, clean, usable data into the TMS.
“You’re saving a shipping clerk or broker hours of time reading through hundreds of emails a day and then keying information about a load or a truck into a screen,” Cubine explains. “It frees up that employee to focus on higher-value tasks, and it brings quality information into the system faster and more accurately.”
TMS: A TOOL, NOT A STRATEGY
Andy Dyer, president of transportation management for 3PL AFS Logistics, also sees growing interest in going back to basics among players in the transportation space. And while the freight tech market “took off in the last decade and this decade … and there is still a pile of money in it,” solutions still need to deliver on a fundamental promise of consistent, efficient performance, innovation, and continuous improvement, he says.
As shippers look to establish their freight tech roadmap, Dyer counsels them to begin with a self-assessment. “It starts with an understanding of your baseline and your current state,” he says. “Where are you with capabilities, resources, and productivity today? How do you want those to change? And what are your priorities?”
The next step is to define what you want the future to be, and that should be driven by overall business goals. “[You need to have a clear idea of] your desired outcome, where your business is going and the desired growth trajectory, and how you want technology to help you get there,” he says. “It’s got to be more than ‘get me a new TMS.’”
A new TMS is a tool, not a strategy, he adds. “A strategy is your roadmap to achieving a desired business outcome, implementing a solution, testing it, measuring the results, and then adjusting for gaps or failures. Technology is a tool to help achieve that outcome.”
DeMuynck echoes Dyer’s observations: Decisions on freight technology must start with an understanding of the overall business strategy. “What are you trying to achieve? Is it powered by tech, or are there other ways to accomplish it?”
He recalls that during the freight tech boom of the last several years, a lot of buyers “were investing in the promise. Now they want to see the value up front.” DeMuynck says a common complaint from tech users he speaks with is that solution providers have not done a good job demonstrating value and ROI where the customer expects it.
“Of all the pitch decks I’ve seen, 80% are focused on ‘Here is my tech and look how cool it is.’ What they don’t address is, ‘Here is your [the customer] problem as I see it, here is how my tech will solve that problem, and here is where you will get productivity or other results that achieve the larger business outcome or give you competitive advantage.”
JUST GIVE ME A HAMMER
Ted Pardee, chief revenue officer for TMS provider PCS, has seen the TMS market evolve repeatedly over his 30 years in the business. He agrees that today’s user focus is on getting back to the basics of the freight business. Pardee notes that in the past couple of years, the market has been flooded with entrants promoting “cool” technologies that promised to revolutionize the business with things like advanced analytics, machine learning, artificial intelligence, and completely digital freight brokerage offerings.
Yet “sometimes you just need a hammer to hit the nail. That is what TMS is. A good one will do the basics, flawlessly, over and over again. Don’t overcomplicate what works,” he emphasizes.
He believes 2024 will be a year that sees the market regain its balance. “Shippers today want to lock down their exposure. Carriers are just holding on after simply trying to survive for the past year and a half.”
He adds that sometimes there is a right and a wrong time to buy software, with now being a key decision time for many companies. “Looking ahead, once the economy wakes up, customers will start growing again. TMS providers and their customers must be ready for that … prepared with smart technology investments now that will position them—and their carrier partners—to be successful as the economy recovers.”
He adds that critical decisions made now “will determine winners and losers, those who have the technology in place to support growth and those who are constrained.”
THE FALLACY OF PERFECT
Once a user makes a TMS purchase decision, the next steps are where the rubber meets the road—implementation and user adoption. And integration with other apps the customer may have that house data or information critical to the TMS’s success.
“Perfection is always the enemy of [the good],” says AFS Logistics’ Dyer. “Every day, week, or month you wait [to make a freight tech decision], you lose time, and you delay getting the value from doing something better fast.” He adds that rapid and effective integration is an equally important factor. “A TMS is not effective in the slightest without input. That comes in the form of orders, rates, capacity providers, shipment status, and any number of other data points.”
The ability to consume, validate, and effectively apply those inputs to make accurate decisions is paramount. “Without integration, a TMS is a hammer without nails,” Dyer notes.
DeMuynck adds two other points. One, when considering freight tech, at least be an early follower. “You may not be on the bleeding edge, but if you wait until everyone else is using it, you’ll be so far behind the curve you’ve lost competitive edge.”
Second is “don’t do it [implementation] all at once in one big bang.” An effective implementation plan needs to be a series of steps, or gates, each of which can be done quickly and can demonstrate initial value fast. “If you are going to fail, fail fast,” he says. “Learn quickly if it is not going to work. Don’t wait 12 months to find out a big implementation is not doing what you wanted; it’s almost impossible to change.”
WHAT’S HOT RIGHT NOW
Even in a down market, there is still substantial demand for various flavors of freight tech that solve for specific issues.
Steve Blough, co-founder and chief innovation officer at TMS provider MercuryGate, sees several areas that are experiencing high demand from shippers, 3PLs, and carriers. Those include:
- Digital freight brokers that still offer strong human customer service but are supported with an array of digital automation tools.
- Technologies supporting processes and actions that help shippers and truckers identify and prevent fraud and protect cargoes from theft.
- Order compliance tools that address a growing list of government regulations and ensure supply chains operate within regulatory parameters.
He also cites tech advances that help operators be more precise and efficient, such as autonomous routing and predictive delivery, verification routing services, and last-mile and optimization solutions that help customers manage the explosive growth of e-commerce. And real-time end-to-end route optimization that helps reduce deadheading and empty miles and takes real greenhouse gas emissions out of the supply chain.
And last but not least, cybersecurity. “That’s not to say folks are not addressing it, but to do it right is expensive and takes resources,” he notes. “When you think of a TMS as an interconnected platform of supply chain tools and parties, the weakest link can bring down an entire network.” In today’s cloud-based world, a strong security profile means a heavy investment in security management processes, tools for penetration testing, code inspection and employee education and training, and continuous management, Blough says.
CUT THE FAT
Over the past three or four years, companies have added any number of new tools and apps to their freight technology stack. Tom Curee, president of Qued, which recently launched a new workflow management software package specifically focused on automating and streamlining load appointment scheduling, sees shippers and 3PLs reengaging with their software providers. The purpose is to examine where they can “cut the fat, what [software] has not become real, what’s not being used to its full extent, and what did not deliver on the original promise,” Curee says.
At the same time, he sees brokers and truckers returning more attention to operations and process areas where technology can further automate, optimize, or streamline basic freight management activities. “Ops teams are the largest expense for a freight transport company,” he notes. “Being able to help automate more of that dispatcher’s or shipping manager’s workload and to help further optimize and utilize trucks and trailers has near-immediate payback.”
As the market continues to evolve, Curee sees increased focus on workflow automation across all aspects of the transportation process, and more emphasis on effective change management to ensure user adoption. “There has been a lot of passion and work put into creating some really great products,” he says. “But at the end of the day, if user adoption is not the primary focus and measure of results, then success will prove elusive.”
