| A06268 | Pages: 343 | Mar 2021 | 6970 Views | ||
| Author(s) : Abhijith Nair | Tables: 171 | Charts: 71 |
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Pandemic disrupted the entire world and affected many industries.
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Request Now !The global transportation management system market was valued at $5,467 million in 2019, and is projected to reach $11,367 million by 2027, registering a CAGR of 9.6% from 2020 to 2027. Transportation management system (TMS) is a platform designed to streamline the transportation process, a subpart of the supply chain. It deals with monitoring, organizing, managing, and handling any matter related to the transportation of products right from placing the order until the final delivery. 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, make easier decisions, and plan & strategize for optimal transportation solutions.
The current market volatility has highlighted the significant role of the supply chains in the overall success and valuation of global corporations. Today’s supply chains are incredibly complex, with myriad partners spread across multiple regions as part of an unprecedented, intertwined global trade ecosystem. The COVID-19 pandemic has caused an enormous strain on the global supply chains as they rush to complete and ship orders as quickly as possible which is driving the adoption of transportation management systems among the end users.
By component, the global transportation management system market was dominated by the solution segment in 2019 as solutions help in optimizing 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. However, the services segment is expected to witness highest growth, owing to reduced time and costs associated with optimization of systems in the initial phase of deployment. Most cloud-based transportation management systems are sold as software-as-a-service (SaaS). This means that users subscribe to the technology on a monthly or annual basis instead of purchasing the technology outright. This is more cost-effective and users are always on the most recent version of the software. In addition, advancement in technologies, such as IoT and cloud-based services, provides opportunities for the overall growth of the market.
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By solution type, the planning & execution segment dominated the market in 2019, and is expected to maintain its dominance in the coming years. 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.
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 U.S. 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 focused 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.
The report focuses on the growth prospects, restraints, and opportunities of the market. The study provides Porter’s five forces analysis of the market to understand impact of various factors such as bargaining power of suppliers, competitive intensity of competitors, threat of new entrants, threat of substitutes, and bargaining power of buyers.
The global transportation management system market is primarily segmented on the basis of component, solution type, deployment model, transportation mode, and industry vertical. Based on component, the market is bifurcated into solution and services. By solution type, it is segmented into planning & execution, order management, audit, payment, & claims, reporting & analytics, and routing & tracking. Based on deployment, it is divided into on-premise and cloud. On the basis of transportation mode, it is fragmented into roadways, railways, airways, and maritime. Finally, based on industry vertical, the market is classified into retail, healthcare & pharmaceutical, manufacturing, transportation & logistics, energy & utilities, government, and others. Region-wise, it is analyzed across North America, Europe, Asia-Pacific, and LAMEA.
Post COVID-19, the transportation management system market was valued at $5,968 million in 2020, and is projected to reach $11,367 million by 2027 at a CAGR of 9.6%. The current estimation of 2027 is projected to be higher than pre-COVID-19 estimates. COVID-19 pandemic has bought a moderate impact on the transportation management system market, achieving a growth rate of 3-4% in 2020. The current market volatility has highlighted the significant role of the supply chains in the overall success and valuation of global corporations. Today’s supply chains are incredibly complex, with myriad partners spread across multiple regions as part of an unprecedented, intertwined global trade ecosystem. The COVID-19 pandemic has caused an enormous strain on the global supply chains as they rush to complete and ship orders as quickly as possible. With tightening budgets and the need to stay connected using technology, it is more important than ever for transportation and logistics companies to have an effective mobility strategy in place.
To adapt supply chain strategies, companies must have knowledge of existing technology, and then determine which additional tools they must integrate to enable their current technology to support their new shipping needs.
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Factors, such as colossal technological advancement across the transportation and logistics sector, create a positive correlation for the transportation management system 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 growth during the forecast period.
The transportation & logistics segment acquires a significant value of around 35-40% within the supply chain, and as it physically connects the business to its supply chain partners, such as suppliers and customers, thereby increasing the customer satisfaction and profit margin. Growing integration of technology within the transportation sector has created unprecedented opportunities for operational efficiencies, sustainability, new business models, and richer customer experiences. For instance, according to the World Economic Forum, digitalization in the logistics industry could unlock $1.5 trillion opportunity by 2025.
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Advanced technologies, such as Internet of Things (IoT), big data, and artificial intelligence (AI), and their predictive capabilities resulted in the creation of smarter and more efficient transportation operations.
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. By 2020, the value of B2B e-commerce is expected to surpass $1 trillion 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.
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Key Benefits For Stakeholders
Key Market Segments
Key Market Players
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The transportation management system (TMS) market is experiencing rapid growth, owing to colossal technological advancement across the transportation & logistics sector, thereby creating a positive correlation for the transportation management system market. Furthermore, exponential growth within the e-commerce industry has expanded the significance of logistics process, thereby creating a high need for effective transportation management system. Growing popularity of autonomous and connected vehicles coupled with rising adoption of cloud technology and industry 4.0 is estimated to have a positive impact on the market growth during the forecast period.
The transportation & logistics sector acquires a significant value of around 35-40% within the supply chain. It also physically connects the business to its supply chain partners, such as suppliers and customers, thereby increasing the customer satisfaction and profit margin. The growing integration of technology within the transportation sector has created unprecedented opportunities for operational efficiencies, sustainability, new business models, and richer customer experiences.
Emerging technologies, such as AI and machine learning, have enabled back-office automation, predictive operations, intelligent transportation assets, and new customer experience models. These technologies primarily aim to digitize the entire end-to-end transportation process of order management, contracting, delivering, and payment. Therefore, digital innovation services from connected warehouses to autonomous last-mile delivery services have widened the scope of transportation management system, which, in turn, is set to increase the productivity performance by enabling innovation and reducing the costs of a range of business processes, thereby creating a strong foundation for TMS market.
Industry 4.0 has gained rapid traction within the manufacturing sector, thereby creating a wider scope for the overall market growth. Technologies, including advanced robotics, artificial intelligence, sophisticated sensors, cloud computing, IoT, data capture & analytics, and digital fabrication are all creating a strong foundation for the next industrial revolution. With the adoption of industry 4.0, several industries and the manufacturing sector are able to make lucrative profit margins with reduction in operational cost. As per the prediction of the Smart Manufacturing Leadership Coalition (SMLC), by correctly implementing industrial data, tone can reduce capital intensity by 30%, reduce product cycle times by 40%, and have a positive impact on energy, emissions, waste, & productivity. The ongoing trends are leading enterprises to use industrial data in a way that will lead them to better business outcomes. This scenario is estimated to have a positive impact on the overall market growth.
The transportation management system market is competitive and comprises a number of regional and global vendors competing based on factors such as cost of solutions & services, reliability, efficiency of products, and support services. The market is concentrated with major players consuming 40-45% of the market share. The degree of concentration is expected to remain same during the forecast period. On the other hand, 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 the 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 alleviates the market growth.
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