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What does the TMS landscape look like right now?

There has been an avalanche of supply chain news in the last 18 months. Despite the increased interest in the logistics industry, the transportation management system (TMS) is an often overlooked and underappreciated component of supply chain operations. A TMS is the heartbeat of supply chain management. It is the consummate control value, directing traffic between legacy order processes and any warehousing or distribution module. Billions of dollars are being invested into B2B software companies to enhance the logistics industry. However, most of these technologies must be architected with TMS integration in mind. With all these macroeconomic factors up in the air, what does the TMS landscape look like right now?

An overview of the Transportation Management System (TMS)

A typical TMS can include both procurement and outbound orders. Load boards allow orders to be evaluated by the TMS or ancillary software components. This functionality offers the shipper various suggested routing solutions. These options are evaluated by Carrier Sales or Operations teams before consummating transactions with a transportation provider (carrier). Once the partner is selected, the TMS can generate electronic load tendering (historically EDI, and now hopefully API). Various B2B software solutions can plug into the TMS to track and trace the shipment with the selected carrier. Downstream, the TMS or another software plugin can support freight audit and payment (settlement process). Communication back to ERP systems (after orders turned into optimal shipments) and Warehouse Management Systems (WMS) is also possible.

Who are the TMS Systems that matter?

As you can see, the TMS is the center of this complex, connected ecosystem. The importance of a TMS to the supply chain industry cannot be underestimated. That said, many TMS systems are dated. The transportation industry is over 100 years old. Software to handle logistics began to be developed in the 1970’s and 1980’s. Historic companies like SAP/Oracle have developed technology for logistics for decades. Companies with modern sounding names like Blue Yonder are reincarnations of older TMS systems from JDA founded in 1985. The TMS market is large and very fragmented. No company has significant market share (10% or more of the industry revenue). Instead, there are dozens of TMS companies supporting the billions of dollars of commerce flowing through the supply chain. Some relevant names to remember are MercuryGate, Descartes, BluJay, TMW, McLeod, and Aljex. However, this is a small fraction of the hundreds of players in this marketplace.

TMS System investments and the future

Recently, the investment community has taken notice of TMS systems and noticed their potential. New TMS systems like Shipwell and Turvo are cropping up with advanced features and integrated partner networks from the start. Private equity companies like CapStreet Group have invested in older TMS systems like PCS Software. They are injecting new capital and talent into older players to give them new opportunities for growth. In total, billions of dollars have been directed into the TMS industry in the past 5 years. These once forgotten workhorses of the supply chain are experiencing a rebirth with VC and PE capital. Revenue across the TMS market is projected to top $27 Billion by 2028.

Contact FreightFriend to Integrate Your TMS System with our B2B Software

Does your TMS have a digital routing guide? Can you offer your customers the ability to search a database of over 500,000 new carriers? Reach out to us here at FreightFriend to learn more about our relationship-based approach to digital freight matching. We can integrate with your TMS system today.


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