Transportation Management Systems Market Size, Share & Trends Analysis Report, By Deployment Mode, By Mode of Transportation, By End User, By Region, And Regional Forecasts, 2019 - 2025

Industry Insights

The global transportation management systems market size was valued at USD 61.27 billion in 2018 and is expected to expand at a CAGR of 16.2% over the forecast period. The emergence of advanced technologies, growth in the retail and e-commerce sector, high Return on Investment (RoI), and an increase in bilateral trade relations between various nations are the key factors driving the growth.

Transportation management system (TMS) is accessible as a module in Supply Chain Management (SCM) and Enterprise Resource Planning (ERP) suites. It helps various industries and organizations with procurement and freight shipment with the help of tools such as freight audit, payments, route planning and optimization, yard management, load building, order visibility, and carrier management. TMS aims at improving the efficiency of shipments, lower the costs incurred, and gaining real-time supply chain visibility with enhanced customer service.

A failure in on-time shipments can lead to significant losses in profit margins and can result in customer frustration. However, to avoid this, end-use industries have increasingly started adopting TMS. This is aimed at providing new forms of optimization which continues to drive the overall efficiency of the TMS and enhance the developer’s RoI.

The latest solutions are capable of capturing and translating several data fields associated with complex shipments to ERP. This helps users to avoid the re-entering of data and enables the use of standards such as EDIFACT or ANSI X12 in Electronic Data Interchange (EDI) and Extensible Markup Language (XML) with carriers. These systems are also being built with powerful optimization engines to offer efficient reporting capabilities. In view of the changing requirements of consumers, these systems are developed in such a way that they are easy-to-use, highly-adaptable, and fast-to-implement; and hence, such systems can potentially deliver a measurable RoI.

Bilateral economic relations between various countries have boosted the demand for reliable transportation management system. U.S.-Japan bilateral relations involve substantial trade and investment. Japan is a major market for many U.S. goods and services, including metals, plastics, agricultural products, organic chemicals, pharmaceuticals and machinery. Similarly, U.S. and India have bilateral trade ties whereby U.S. annually exports precious metals and stones, mineral fuels, aircraft and machinery to India, while importing agricultural products, spices, essential oils, rice, and processed food products from India. According to the Office of the United States Trade Representative, the goods & services trade with India was estimated to be USD 126.2 billion in 2017 and is expected to grow over the coming years.

Deployment Mode Insights

On the basis of deployment mode, the transportation management systems market can be categorized into on-premise and cloud. The on-premise deployment mode held the largest market share in 2018. Currently, many large manufacturing and distribution companies still prefer the on-premise deployment mode for TMS solutions owing to the safety requirements, ease of access to the server, and greater control over customization. However, with the awareness of the benefits of cloud, industries are expected to adopt cloud over the forecast period.

The cloud segment is expected to expand at the highest CAGR over the forecast period. Cloud TMS offers unique planning and optimizing benefits to shippers, vendors and logistics providers. With the exponential increase in the amount of data being generated, companies are opting for cloud-based TMS solutions. These solutions have proved as a cost-effective alternative to on-premise storage, particularly to lower the licensing cost and avoid having more technical staff. They offer unique benefits to logistics service providers, vendors, customers, and shippers. Another important advantage lies in the storage of information in a central location. This ensures fast and easy access to the system from any geographic location without any interruptions.

Mode of Transportation Insights

The TMS market can be categorized by mode of transportation, into roadways, railways, airways, and waterways. The roadways segment held the largest market share in 2018. Road freight is one of the most common modes of transportation. It is relatively cheaper as compared to other modes. It is a cost-effective and flexible mode of transport and makes loading and unloading possible at any destination. However, there are certain limitations to transport via road, such as limited carrying capacity, multipoint police checks, poor road conditions, traffic, and others.

The railways segment is expected to expand at the highest CAGR over the forecast period owing to government initiatives for the upgradation of railways through Public Private Partnership (PPP). Trains are used to transport a large volume of cargo in a short period of time over long distances. The limitations to railway transportation include high fixed costs due to railway track infrastructure, route limitations, no flexibility for the loading and unloading of goods at any place, and unavailability of labor in remote parts of the country.

End User Insights

The end user segments analyzed in the study include retail and e-commerce, manufacturing, logistics, government organizations, and others. The manufacturing segment held the largest share of the overall market in 2018. The growing number of manufacturing units in countries such as Mexico and India has led to an increase in the outsourcing of raw materials, inventories, and other raw materials required for manufacturing activities. Furthermore, increasing imports and exports and trade relations between countries are expected to boost the demand for shipping services, which would ultimately drive the market growth. For instance, the Indian government’s ‘Make in India’ initiative has put a strong emphasis on the domestic manufacturing sector, which has triggered the local TMS market growth.

The retail and e-commerce segment is expected to expand at the fastest CAGR over the forecast period owing to the increasing retail industries in countries such as U.S., China, and others. China accounts for nearly 80% of the online sales in Asia Pacific whereas India is expected to become the world’s fastest growing e-commerce market propelled by robust investment in this sector and higher smartphone penetration. Some of the biggest e-commerce giants such as Amazon.com, Inc.; Alibaba Group; and Walmart Inc. maintain their shipping operations through transportation management systems.

Regional Insights

North America held the largest share of the overall market in 2018 owing to the highest use of roadways as a mode of transportation for freight movement. Companies such as 3GTMS; Cerasis, Infor Inc.; IBM Corporation; JDA Software Group, Inc.; Manhattan Associates; and MercuryGate International Inc.; among others are situated in this region.

Asia Pacific is expected to emerge as the fastest-growing market over the next seven years. The growing retail and e-commerce sector in China, India, and Japan is anticipated to boost the growth. The growing investments in railways and the upgradation of the traditional freight infrastructure fare are expected to boost the market growth over the forecast period.

Transportation Management Systems Market Share Insights

Key players such as JDA Software Group, Inc.; The Descartes Systems Group, Inc.; Oracle Corporation; SAP SE; and 3GTMS; among others hold a significant position in the market. Infor Inc.; C.H. Robinson Worldwide, Inc.; and inet-Logistics GmbH are some of the niche players operating in the market. These companies are investing significantly in R&D and are involved in product upgrades as well as new product launches. For instance, in July 2018, BluJay Solutions released the version 18.2 of its cloud-based technology platform, Global Trade Network.

This latest update is aimed at delivering full multi-modal transportation support, including air mode support for booking creation and shipping assignment; tracking provider integration with a European platform for telematics data sharing and aggregation called GateHouse Logistics, thereby providing customers with information from more than 400 telematic providers; and the ability to generate Receipt-Created Tax Invoice (RCTI), among others.

Mergers and acquisitions, contracts and agreements, and partnerships have impacted the market and are significantly driving the overall market share of key players. For instance, The Descartes Systems Group Inc. partnered with SAP SE to streamline the international shipment of goods by integrating its own system with SAP Transportation Management. Similarly, JDA Software Group, Inc. partnered with FourKites to enhance its service quality by integrating FourKite’s real-time visibility data with its own JDA TMS module.

Report Scope

Segments Covered in the Report

This report forecasts revenue growth at the global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2015 to 2025. For the purpose of this study, Grand View Research has segmented the global transportation management systems market report on the basis of deployment mode, mode of transportation, end user, and region:

• Deployment Mode Outlook (Revenue, USD Billion, 2015 - 2025)

  • On-Premise

  • Cloud

• Mode of Transportation Outlook (Revenue, USD Billion, 2015 - 2025)

  • Roadways

  • Railways

  • Waterways

  • Airways

• End User Outlook (Revenue, USD Billion, 2015 - 2025)

  • Retail & Ecommerce

  • Manufacturing

  • Logistics

  • Government Organizations

  • Others

• Regional Outlook (Revenue, USD Billion, 2015 - 2025)

  • North America

    • U.S.

    • Canada

    • Mexico

  • Europe

    • U.K.

    • Germany

  • Asia Pacific

    • China

    • India

    • Japan

  • South America

    • Brazil

  • Middle East & Africa