James Cooke is a principal analyst with Nucleus Research in Boston, covering supply chain planning software. He was previously the editor of CSCMP?s Supply Chain Quarterly and a staff writer for DC Velocity.
At a time of ever-increasing fuel surcharges, Jel Sert Co. has managed to do the seemingly impossible: hold the line on its transportation expenses. When it tallied up its freight expenditures for 2007, Jel Sert, a snack food and dessert maker perhaps best known for its freezer pops, found that it had managed to keep its spending to the same level it did in 2006— $15 million.
But the company did more than simply hold the line on transportation expenses last year, says Michael Martinez, Jel Sert's director of distribution. It actually reduced its per-shipment cost. In 2006, the company paid $15 million to move 20,000 shipments, he says. "But [in 2007,] we shipped 1,000 more truckloads [while keeping] the dollar spend the same. It's like having 1,000 free truckloads."
How did it manage this feat? Jel Sert says the key to its success was a transportation management system, or TMS. In December 2006, the company began using its first TMS—a Web-hosted version from Lean Logistics. Almost immediately, the software identified ways to streamline operations and consolidate loads. (For more on Jel Sert's story, see the sidebar.)
Jel Sert's case is hardly unusual, say the makers of TMS solutions. They claim that companies that use the software, which is designed to help users manage their transportation operations by overseeing the planning and movement of shipments, routinely see reductions in their freight bills. Yet experts in the field warn that not every shipper may be in a position to reap huge savings from a TMS. Shippers have to meet certain criteria if they hope to score big.
It pays to automate
TMS applications are nothing new. In fact, they've been around for almost two decades now. But these days, shippers have a couple of choices when it comes to how they use the software: They can buy a software license from the vendor and install the application on their corporate servers. Or they can do as Jel Sert did and arrange to have the software delivered "on demand." Under this model, which tends to be the less costly approach, the user essentially rents the application from a vendor that hosts the program on its own servers and delivers it over the Internet for a fee.
With rates rising and fuel surcharges soaring, analysts say interest in transportation management systems has grown over the past couple of years. And that interest shows no sign of receding. The Stamford, Conn.-based research firm Gartner Group forecasts that TMS software vendors will see revenues march steadily upward this year. Gartner expects sales to climb from $493 million in 2007 to $554 million this year—a gain of 12.4 percent.
Though TMS vendors tout their wares as a way for shippers to stem the tide of rising transportation costs, the potential benefits vary according to the state of a shipper's current operations. "The savings depend on how messed up you are to begin with," says Adrian Gonzalez, director of ARC Advisory Group's Logistics Executive Council in Dedham, Mass. He notes that in general, companies that rely on manual processes—where, say, employees call up carriers to tender loads and fax out routing instructions— have the most to gain from implementing a TMS. "The range of savings will depend on how manual your processes are to begin with," he says. "It could be significant, with the range of savings from 5 to 20 percent."
Analyst John Fontanella of Boston's AMR Research Inc. agrees with Gonzalez that manual operations have the most to gain from installing a TMS, but his estimate of the potential savings runs somewhat lower. Fontanella puts the savings at somewhere between 5 and 10 percent of transportation expenditures. To warrant the expense of purchasing or renting a system, he adds, a company must spend at least $8 million a year on transportation. "Below that it's tough to justify the cost of a TMS," says Fontanella.
What a TMS can do
Assuming a company has a large enough annual freight bill to justify the expenditure, how can a TMS improve its operations? For starters, the software can automate the day-to-day freight management activities. Transportation management systems are designed to handle standard communications with carriers, sending emails or faxes to book a shipment or schedule a pickup, for example. They're also set up to compile rate databases, collecting information on various carriers' rates and terms by contacting them via email and asking them to submit their rates online. Not only does that eliminate the need for employees to contact carriers individually and record rate information on an Excel spreadsheet, but it also makes rate comparison a snap.
In addition to compiling rate databases, many TMS systems boast procurement features that allow shippers to solicit electronic bids from carriers, Gonzalez notes. This, in turn, enables shippers to identify opportunities to negotiate volume discounts with those carriers. "For companies that don't put out their freight to bid and have a fragmented carrier base, they can use the TMS to take a centralized approach to aggregate their spend across their divisions and negotiate better rates with carriers," explains the ARC analyst. "The TMS also has optimization technology that can analyze all the carrier bids and take into account business rule requirements or any constraints."
Along with rate comparisons, transportation management systems typically can analyze shipment patterns and look for ways to consolidate orders—for example, combining several shipments into a single truckload for delivery to multiple customers, rather than sending several less-than-truckload shipments. "Savings often come from optimization, minimizing the number of less-thantruckload shipments," says Gonzalez.
In addition, a TMS can make short work of tasks like building loads and assigning orders to a particular shipment—tasks that tend to tax the human brain's capacity. "When you're trying to build loads manually, it gets overwhelming too quickly," says transportation consultant Foster Finley, a managing director at AlixPartners in Detroit. Say, for example, a manager is looking for the best way to move a $300 LTL shipment heading west, he says. Sorting through hundreds of shipments manually to find the best solution would be an all but impossible task. But turn the problem over to a TMS, and in minutes, it's likely to come up with an opportunity to add it to an existing truckload move for an additional $50 stop-off charge.
A stick for discipline
A TMS can offer other benefits as well. What many companies overlook is the potential for a TMS to help them impose discipline on transportation operations throughout the company's various sites. Fontanella notes that a TMS can be a particularly useful tool for ensuring that individual sites comply with corporate policies and adhere to the terms of any contracts the company has signed with carriers.
The software can also help steer users to the lowest-cost carriers. If all company DCs use the same TMS for load tendering, Finley says, the system can be set up to ensure that shipments are booked on preferred carriers. "When you're tendering a load and you have multiple tariffs," he says, "you can use the TMS to make sure you have the carrier with the lowest rate accepting the load if possible."
In the past, TMS applications were generally geared to domestic highway and rail movements. Today, however, most TMS applications are designed to identify savings opportunities not just in domestic movements but in international ones as well. "The bigger TMS vendors are expanding their footprint to cover more areas," says Gonzalez. "They are becoming more multimodal."
Companies that operate private fleets can also realize savings by using a TMS to streamline their operations. Gonzalez says that a TMS can be used to analyze routes or even find a backhaul load. A TMS can also eliminate the need for manual appointment scheduling. "Many companies still pick up the phone to schedule a delivery or appointment," says Gonzalez. "[With a TMS,] you can direct someone to a Web site where they can book themselves a slot online."
Future flexibility
Although most companies justify the cost of a TMS on the basis of transportation savings, that might not be the case in the future. Someday, companies may turn to this type of software more for the flexibility it offers them to react to changing conditions in the marketplace. Consultant Stephen Craig of CP Consulting says a TMS makes it easier for a shipper to change its transportation strategy each year or even respond to transportation market changes. In fact, a TMS can be used to model a company's current shipping approach and then come up with different scenarios for saving money.
The customers that get the most from their transportation management systems, he says, will be those that use the software for more than simply solving short-term problems. "A TMS is not going to help you beat fuel surcharges," says Craig. "But a well-implemented TMS is a good way for folks to deal with the changes that are just not stopping."
a taste for savings
Interested in using a transportation management system (TMS) but worried that it might be too costly for your operation? If food producer Jel Sert's experience is any indication, those fears might be unfounded. According to Michael Martinez, the company's director of distribution, Jel Sert saw a prompt payback on its TMS investment. In fact, he reports, the on-demand TMS that the company implemented in December 2006 paid for itself in less than three months.
A privately held, family-owned company based in West Chicago, Ill., Jel Sert makes "My-T-Fine" puddings, "Fla-Vor- Ice" freezer bars, "Otter" freeze pops, and Wyler's soft drink mixes. The company, whose business is largely seasonal (it moves 75 percent of its products in the spring and early summer), uses a combination of truckload, intermodal, less-than-truckload (LTL), and parcel carriers to ship its merchandise to locations nationwide.
Up until 2006, when the company deployed its first TMS, its transportation operation was strictly a paper-based manual process. "We were very transactional, processing one piece of paper at a time, and we were missing the opportunity to see multiple pieces of data at one time," says Martinez.
But the company's shift to a TMS—a Web-hosted solution from Lean Logistics that Jel Sert "rents" for a monthly subscription fee—changed all that. "By automating with a TMS, we are able to see 'lots' of orders on our terminals at one time, giving us the ability to save on freight by aggregating our data and putting things together like a puzzle," Martinez reports.
Seeing the big picture enabled Jel Sert to take advantage of opportunities to consolidate LTL shipments into lesscostly truckloads. "In the past, we did LTL," says Martinez, "Or we would use a 53-foot trailer with only 10 pallets on it, and we paid the full price for the truck." Now, he says, that no longer happens.
In the year prior to installing the TMS, the company spent $15 million on freight transportation. This past year, it spent the same amount, even though fuel charges rose and the company made 1,000 more truckload shipments. "We shipped more volume but we didn't spend a dollar more," says Martinez. "The savings were in the seven digits."
Jel Sert has gained one other advantage from its TMS— it's now finding itself quite popular with carriers. In the past, the food producer had used a third-party freight payment service to reimburse its carriers. Because the TMS has a payment module, Jel Sert has switched over to that, eliminating the middleman. "It's improved the receipt-to-payment cycle time," Martinez says. "And that means more carriers want to do business with us."
“The past year has been unprecedented, with extreme weather events, heightened geopolitical tension and cybercrime destabilizing supply chains throughout the world. Navigating this year’s looming risks to build a secure supply network has never been more critical,” Corey Rhodes, CEO of Everstream Analytics, said in the firm’s “2025 Annual Risk Report.”
“While some risks are unavoidable, early notice and swift action through a combination of planning, deep monitoring, and mitigation can save inventory and lives in 2025,” Rhodes said.
In its report, Everstream ranked the five categories by a “risk score metric” to help global supply chain leaders prioritize planning and mitigation efforts for coping with them. They include:
Drowning in Climate Change – 90% Risk Score. Driven by shifting climate patterns and record-high temperatures, extreme weather events are a dominant risk to the supply chain due to concerns such as flooding and elevated ocean temperatures.
Geopolitical Instability with Increased Tariff Risk – 80% Risk Score. These threats could disrupt trade networks and impact economies worldwide, including logistics, transportation, and manufacturing industries. The following major geopolitical events are likely to impact global trade: Red Sea disruptions, Russia-Ukraine conflict, Taiwan trade risks, Middle East tensions, South China Sea disputes, and proposed tariff increases.
More Backdoors for Cybercrime – 75% Risk Score. Supply chain leaders face escalating cybersecurity risks in 2025, driven by the growing reliance on AI and cloud computing within supply chains, the proliferation of IoT-connected devices, vulnerabilities in sub-tier supply chains, and a disproportionate impact on third-party logistics providers (3PLs) and the electronics industry.
Rare Metals and Minerals on Lockdown – 65% Risk Score. Between rising regulations, new tariffs, and long-term or exclusive contracts, rare minerals and metals will be harder than ever, and more expensive, to obtain.
Crackdown on Forced Labor – 60% Risk Score. A growing crackdown on forced labor across industries will increase pressure on companies who are facing scrutiny to manage and eliminate suppliers violating human rights. Anticipated risks in 2025 include a push for alternative suppliers, a cascade of legislation to address lax forced labor issues, challenges for agri-food products such as palm oil and vanilla.
That number is low compared to widespread unemployment in the transportation sector which reached its highest level during the COVID-19 pandemic at 15.7% in both May 2020 and July 2020. But it is slightly above the most recent pre-pandemic rate for the sector, which was 2.8% in December 2019, the BTS said.
For broader context, the nation’s overall unemployment rate for all sectors rose slightly in December, increasing 0.3 percentage points from December 2023 to 3.8%.
On a seasonally adjusted basis, employment in the transportation and warehousing sector rose to 6,630,200 people in December 2024 — up 0.1% from the previous month and up 1.7% from December 2023. Employment in transportation and warehousing grew 15.1% in December 2024 from the pre-pandemic December 2019 level of 5,760,300 people.
The largest portion of those workers was in warehousing and storage, followed by truck transportation, according to a breakout of the total figures into separate modes (seasonally adjusted):
Warehousing and storage rose to 1,770,300 in December 2024 — up 0.1% from the previous month and up 0.2% from December 2023.
Truck transportation fell to 1,545,900 in December 2024 — down 0.1% from the previous month and down 0.4% from December 2023.
Air transportation rose to 578,000 in December 2024 — up 0.4% from the previous month and up 1.4% from December 2023.
Transit and ground passenger transportation rose to 456,000 in December 2024 — up 0.3% from the previous month and up 5.7% from December 2023.
Rail transportation remained virtually unchanged in December 2024 at 150,300 from the previous month but down 1.8% from December 2023.
Water transportation rose to 74,300 in December 2024 — up 0.1% from the previous month and up 4.8% from December 2023.
Pipeline transportation rose to 55,000 in December 2024 — up 0.5% from the previous month and up 6.2% from December 2023.
Parcel carrier and logistics provider UPS Inc. has acquired the German company Frigo-Trans and its sister company BPL, which provide complex healthcare logistics solutions across Europe, the Atlanta-based firm said this week.
According to UPS, the move extends its UPS Healthcare division’s ability to offer end-to-end capabilities for its customers, who increasingly need temperature-controlled and time-critical logistics solutions globally.
UPS Healthcare has 17 million square feet of cGMP and GDP-compliant healthcare distribution space globally, supporting services such as inventory management, cold chain packaging and shipping, storage and fulfillment of medical devices, and lab and clinical trial logistics.
More specifically, UPS Healthcare said that the acquisitions align with its broader mission to provide end-to-end logistics for temperature-sensitive healthcare products, including biologics, specialty pharmaceuticals, and personalized medicine. With 80% of pharmaceutical products in Europe requiring temperature-controlled transportation, investments like these ensure UPS Healthcare remains at the forefront of innovation in the $82 billion complex healthcare logistics market, the company said.
Additionally, Frigo-Trans' presence in Germany—the world's fourth-largest healthcare manufacturing market—strengthens UPS's foothold and enhances its support for critical intra-Germany operations. Frigo-Trans’ network includes temperature-controlled warehousing ranging from cryopreservation (-196°C) to ambient (+15° to +25°C) as well as Pan-European cold chain transportation. And BPL provides logistics solutions including time-critical freight forwarding capabilities.
Terms of the deal were not disclosed. But it fits into UPS' long term strategy to double its healthcare revenue from $10 billion in 2023 to $20 billion by 2026. To get there, it has also made previous acquisitions of companies like Bomi and MNX. And UPS recently expanded its temperature-controlled fleet in France, Italy, the Netherlands, and Hungary.
"Healthcare customers increasingly demand precision, reliability, and adaptability—qualities that are critical for the future of biologics and personalized medicine. The Frigo-Trans and BPL acquisitions allow us to offer unmatched service across Europe, making logistics a competitive advantage for our pharma partners," says John Bolla, President, UPS Healthcare.
The supply chain risk management firm Overhaul has landed $55 million in backing, saying the financing will fuel its advancements in artificial intelligence and support its strategic acquisition roadmap.
The equity funding round comes from the private equity firm Springcoast Partners, with follow-on participation from existing investors Edison Partners and Americo. As part of the investment, Springcoast’s Chris Dederick and Holger Staude will join Overhaul’s board of directors.
According to Austin, Texas-based Overhaul, the money comes as macroeconomic and global trade dynamics are driving consequential transformations in supply chains. That makes cargo visibility and proactive risk management essential tools as shippers manage new routes and suppliers.
“The supply chain technology space will see significant consolidation over the next 12 to 24 months,” Barry Conlon, CEO of Overhaul, said in a release. “Overhaul is well-positioned to establish itself as the ultimate integrated solution, delivering a comprehensive suite of tools for supply chain risk management, efficiency, and visibility under a single trusted platform.”
Shippers today are praising an 11th-hour contract agreement that has averted the threat of a strike by dockworkers at East and Gulf coast ports that could have frozen container imports and exports as soon as January 16.
The agreement came late last night between the International Longshoremen’s Association (ILA) representing some 45,000 workers and the United States Maritime Alliance (USMX) that includes the operators of port facilities up and down the coast.
Details of the new agreement on those issues have not yet been made public, but in the meantime, retailers and manufacturers are heaving sighs of relief that trade flows will continue.
“Providing certainty with a new contract and avoiding further disruptions is paramount to ensure retail goods arrive in a timely manner for consumers. The agreement will also pave the way for much-needed modernization efforts, which are essential for future growth at these ports and the overall resiliency of our nation’s supply chain,” Gold said.
The next step in the process is for both sides to ratify the tentative agreement, so negotiators have agreed to keep those details private in the meantime, according to identical statements released by the ILA and the USMX. In their joint statement, the groups called the six-year deal a “win-win,” saying: “This agreement protects current ILA jobs and establishes a framework for implementing technologies that will create more jobs while modernizing East and Gulf coasts ports – making them safer and more efficient, and creating the capacity they need to keep our supply chains strong. This is a win-win agreement that creates ILA jobs, supports American consumers and businesses, and keeps the American economy the key hub of the global marketplace.”
The breakthrough hints at broader supply chain trends, which will focus on the tension between operational efficiency and workforce job protection, not just at ports but across other sectors as well, according to a statement from Judah Levine, head of research at Freightos, a freight booking and payment platform. Port automation was the major sticking point leading up to this agreement, as the USMX pushed for technologies to make ports more efficient, while the ILA opposed automation or semi-automation that could threaten jobs.
"This is a six-year détente in the tech-versus-labor tug-of-war at U.S. ports," Levine said. “Automation remains a lightning rod—and likely one we’ll see in other industries—but this deal suggests a cautious path forward."
Editor's note: This story was revised on January 9 to include additional input from the ILA, USMX, and Freightos.