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 continue 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 a 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 the 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.
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 the 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.
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.
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 the 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.
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.
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 Attribute |
Details |
Market size value in 2020 |
USD 102.6 billion |
Revenue forecast in 2025 |
USD 198.82 billion |
Growth Rate |
CAGR of 16.2% from 2019 to 2025 |
Base year for estimation |
2018 |
Historical data |
2015 - 2017 |
Forecast period |
2019 - 2025 |
Quantitative units |
Revenue in USD billion and CAGR from 2019 to 2025 |
Report coverage |
Revenue forecast, company share, competitive landscape, growth factors and trends |
Segments covered |
Deployment mode, mode of transportation, end-user, region |
Regional scope |
North America; Europe; Asia Pacific; South America; Middle East & Africa |
Country scope |
U.S.; Canada; Mexico; U.K.; Germany; China; India; Japan; Brazil |
Key companies profiled |
JDA Software Group, Inc.; The Descartes Systems Group, Inc.; Oracle Corporation; SAP SE; 3GTMS |
Customization scope |
Free report customization (equivalent up to 8 analysts working days) with purchase. Addition or alteration to country, regional & segment scope. |
Pricing and purchase options |
Avail customized purchase options to meet your exact research needs. Explore purchase options |
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
The U.S.
Canada
Mexico
Europe
U.K.
Germany
Asia Pacific
China
India
Japan
South America
Brazil
Middle East & Africa
b. The global TMS market size was estimated at USD 80.9 billion in 2019 and is expected to reach USD 102.6 billion in 2020.
b. The global TMS market is expected to grow at a compound annual growth rate of 16.2% from 2019 to 2025 to reach USD 198.2 billion by 2025.
b. North America dominated the TMS market with a share of 33.3% in 2019. This is attributable to the highest use of roadways as a mode of transportation for freight movement.
b. Some key players operating in the TMS market include JDA Software Group, Inc.; The Descartes Systems Group, Inc.; Oracle Corporation; SAP SE; and 3GTMS.
b. Key factors that are driving the TMS market growth include 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.
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The automotive & transportation industry is amongst the most exposed verticals to the ongoing COVID-19 outbreak and is currently amidst unprecedented uncertainty. COVID-19 is expected to have a significant impact on the supply chain and product demand in the automotive sector. The industry's concern has moved on from being centered on supply chain disruption from China to the overall slump in demand for automotive products. The demand for commercial vehicles is expected to plummet with the shutdown of all non-essential services. Furthermore, changes in consumer buying behavior owing to uncertainty surrounding the pandemic may have serious implications on the near future growth of the industry. Meanwhile, liquidity shortfall and cash crunch have already impacted the sales of fleet operators, which is further expected to widen over the next few months. We are continuously monitoring the COVID-19 pandemic, and assessing its impact on the growth of the automotive & transportation industry. The report will account for Covid19 as a key market contributor.