SAP Integrated Business Planning


Transportation Management Systems

Increasing importance of global freight drives investments

By the year 2024, global freight volume is forecast to surge to 92.1 billion tons (55 billion tons, 2015). Trends in the transportation market affect this high increase in volume. These trends can be divided into exogenous and endogenous influence factors.


Exogenous influence factors

Factors that affect a company. These trends can only be influenced by a company to a very limited degree:

  • Cost pressure: Rising logistics costs – Higher price transparency and price sensitivity
  • Demand fluctuation: High client demand volatility
  • Governance regulations/compliance: Laws, regulations, standards
  • Individualization: Specific customer demand – greater diversity
  • Staff shortages in the transportation industry
  • Risk/Interruptions: Political risks, natural disasters, cyber attacks
  • Complexity: Complex and dynamic market
  • Sustainability: Higher demand for Go Green initiatives
  • Changed consumer behavior: Change in distribution of sales channels

Endogenous influence factors

Factors that are driven by a company rather than by external factors and can be manipulated to favor the company´s needs:

  • Digitalization of business processes: Moving from a paper-based to a digitalized process
  • Business analytics: Increase the transparency of a value chain with the help of Data analytics
  • Transparency in supply chain: Increase transparency in the whole value chain
  • Automation: Increase productivity by a higher degree of automation on processes and machines
  • Networking/collaboration: Vertical and horizontal connection of the network
  • Decentralization: Decentralized warehouse and hub concept

Transportation Management Systems (TMS) are becoming essential tools to meet the challenges associated with these trends, ranging from high growth rates and rising costs to increasingly sophisticated customer demands. We have seen a very diverse TMS market emerge that aims to keep pace with the latest technology trends. Essentially, there are few large ERP vendors such as SAP and Oracle who have also mature TMS solutions as part of overall enterprise offering, and a number of specialised software vendors focusing on variety of planning solutions or just purely on TMS.

The Transportation Management System Survey

Deloitte set up and conducted a major survey to analyse and identify insights on the TMS market both for Business Fit and Technology fit for different TMS vendor solutions.

This survey is part of Deloitte’s broader transportation practice and its work to compare and build insight into the offerings of TMS vendors. We conducted a three-month market study in Q3/Q4 2019 based on Deloitte’s leading 1 to 4th Party Logistics (1-4 PL) Service Provider structure and TMS Business Architecture Framework.

"The results of the study show that TMS providers still differ greatly in their individual business architecture. It appears that TMS providers adapt to different market needs and target customers and have different levels of maturity in terms of the individual modules. Therefore, TMS buyers are advised to be very diligent when it comes to choosing a vendor. In order to properly serve business needs, an individual assessment is highly recommended."
-Antti Isomäki & Jari Pesonen, Deloitte

Transportation Management Systems
The Transportation Management System Survey


By reflecting the results of the survey, we can determine that every company need to identify their potential for improvement in a structured and efficient way in order to generate greater business value. There is no TMS covering all the requirements of the different companies and their party logistics types.

Firstly, a significant number of vendors differentiate between freight forwarder and shipping (industry) companies and therefore offer different modules for their target groups.

Secondly, vendors take the PL types and business architecture of a client target group into consideration. This means they focus on the details of different core processes and software capabilities. For this specialization, a customizable solution is needed.

On technology side the majority of TMS vendors are investing in future-oriented technologies such as IoT, RPA, and Cloud Solutions. More than two thirds of them, however, are relying on on-premise systems instead of a cloud-based solution. Besides the trending new technologies, companies are looking for ease of integration to company’s chosen ERP solution and fully mobile enabled user experience as key requirements.

Antti Isomäki

Antti Isomäki
Enterprise Technology and Performance,
Deloitte Finland

Jari Pesonen
Supply Chain Consulting,
Deloitte Finland

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