Reimagining the TMS for the age of e-commerce – DC Velocity

In the interconnected supply chain world, its probably no surprise that the pandemic-fueled e-commerce boom in the U.S. has roiled the transportation market as well, leading to a surge in parcel volumes, a tightening in truck capacity, and rising package rates, to name just a few of the effects.

Add it all up, and those changes are causing serious supply chain headaches for companies struggling to stay afloat in a competitive retail marketplace. In search of relief, many shippers are turning to an increasingly diverse range of carriers, utilizing small regional firms to supplement the big three parcel carriersUPS Inc., FedEx Corp., and the U.S. Postal Service.

That approach can help, but it also adds new layers of complexity to the already challenging task of tracking individual parcels across multiple modes, carriers, intermediaries, and sortation centers.

In response, developers of transportation management systems (TMS) are rolling out new capabilities designed to help users navigate those challenges, insiders say. These new software capabilities are centered on data digitalization and increased real-time trackingwhich some call visibility on steroids.

Taken together, those advancements can help users trim delivery costs while continuing to meet escalating demandswhether from consumers whove come to expect Amazon-level next-day delivery service or retailer customers like Walmart that will tolerate nothing less than on-time/in-full (OTIF) shipments from suppliers.

TMS developers say the key to managing those challenges is improved visibility, which is built by collecting data at every step of the transportation and delivery processtypically through tools like electronic logging devices (ELDs) on trucks, internet of things (IoT) sensors on pallets, and digitalized paperwork such as bills of lading.

Amazon has changed the way we all expect [logistics]to be done,says Dan Clark, founder of TMS developer Kuebix and vice president of product innovation and strategy for Trimble Inc.,which acquired Kuebix in 2020.A lot of money has been invested in visibility in recent years, and now weve got to put visibility on steroids to meet what customers expect to happen.

That visibility is key to allowing shippers to deploy their TMS platforms in new ways, like tracking freight across multiple modes, building application programming interfaces (APIs) with regional parcel carriers, or consolidating packages for delivery to a carriers regional hub as part of a zone-skipping strategy, says Mike Doyle, Kuebixs vice president of product management.

Its a game of transparency and visibility today, adds Clark. So, a TMS goes beyond the definition of just managing transportation and becomes a network TMS that connects to everything and everyone.

A key consideration in building that network is choosing a TMS thats offered on a software-as-a-service (SaaS) basis and operates in the cloud, as opposed to running on servers located on the shippers premises.Thats because cloud-based platforms can automatically pull data from disparate sources and then analyze it, all while running the latest software version available. In addition, SaaS platforms essentially democratize the software, making it available to small and medium-sized businesses that havent traditionally used a TMS because they were priced out of the market, Clark says. With the SaaS model, they can also choose only those micro-services they need, instead of paying for the whole package, he adds.

Going with a cloud-based TMS that automatically collects data from ELDs and other sources is also a critical step toward digitalizing the mountains of data generated in transportation operations and automating processes to improve precision and efficiency, says Daragh Mahon, chief information officer of Werner Enterprises Inc., a transportation and logistics service provider that recently adopted a new TMS.

In November, Werner said it had made an investment in Mastery Logistics Systems Inc. and would adopt its MasterMind TMS. Mastery is the software startup created by former Coyote Logistics CEO and co-founder Jeff Silver, who sold Coyote to UPS Inc. in 2015 and founded his new firm in 2019 with a focus on cloud-based collaborative platforms.

Among other advantages, connected, cloud-based TMS systems can boost communication throughout the transportation sector. In Werners case, the company can use ELDs, IoT sensors, and telematic devices to collect information that can potentially be parlayed into operating improvements. Through its new deal with Mastery, the company plans to tap that potential and leverage new benefits.

There are 80 to 120 pieces of data we can create every second, from temperature to oil pressure to speedsome are for safety, some are for maintenance, Mahon says. Were collecting it, but were not using it to the fullest extent. Theres a ton of opportunity there that the industry hasnt explored yet.

Although carriers have been working for years to connect disparate systems and automate manual processes, the Covid-19 pandemic has jumpstarted those efforts, forcing through a lot of change thats long been needed in the transportation sector, according to Mastery CEO Jeff Silver.

Theres so much unnecessary work, Silver says. How much time has been wasted when people print out bills of lading, drivers carry them across the country, and then copy and scan them? It is an idiotic amount of absolutely no-value work thats been happening since 1984, when I got into this business.

But new solutions are now coming into focus, thanks to TMS systems that enable instant connections with ELDs and APIs, supporting improved communication, automation, and other advances throughout the transportation sector. TMSs that dont provide that flexibility will be crippling, Silver says.

Today, TMS platforms are evolving far beyond their roots in carrier selection and routing to essentially become advanced communication hubs. Cloud-based systems can now provide both connectivity and visibility throughout far-flung networks. That combination is empowering even small companies to leverage next-generation TMS tools to solve some of the thorniest problems of the e-commerce age.

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Reimagining the TMS for the age of e-commerce - DC Velocity