ID: MRFR/ICT/0888-CR | February 2020 | Region: Global | 122 pages
Market Research Future (MRFR) predicts the Global Transportation Management System (TMS) Market size to expand at a CAGR of 6.7% from 2017–2025 (forecast period). Key factors propelling the growth of the TMS industry include technological developments in the transport and logistics sector and the rapid growth in the eCommerce industry.
The global transport management systems (TMS) market has had a negative effect since the coronavirus outbreak in December 2019. The pandemic has resulted in a number of countries imposing lockdowns and shutting down businesses, except for essential services (allowed with minimal workforce). In recent times, these lockdowns have resulted in a major reduction in travel and transport. Transport is a vital aspect of the travel and tourism market. Companies working in the sector need to maintain their fleets efficiently so that they can deliver better services to end-users. With the expansion of the overall travel & tourism industry, especially in developing countries, overall competition in the industry is growing significantly and, in order to compete effectively in the market, companies are investing in boosting their supply chains and logistics channels by deploying comprehensive transport management systems (TMSs). These travel and tourism companies are mainly looking for TMS solutions that efficiently collect real-time data about the fleet status and carrier contract management, among other applications. As a result, vendors operating in the market are enhancing their solutions to meet the needs of travel and tourism companies. The demand for this software is expected to rebound in the coming months as many governments are preparing to lift the lockdowns. Governments of many countries have given permission to the majority of companies to resume their operations in accordance with the safety guidelines. The demand for transport management systems is expected to increase dramatically in the long run.
Technological developments in the transportation and logistics industry
The demand for greater agility in transport and logistics operations that enable companies to offer superior customer service is driven primarily by digital transformation across the industry. Many companies are embracing a new range of emerging technologies as part of the digital transformation trend, generating unparalleled opportunities for operational efficiency, sustainability, new business models, and richer customer experience. Advanced technologies like the Big Data, Internet of Things (IoT), and Artificial Intelligence (AI) and their predictive capabilities make transport operations smarter and more efficient. For example, AI has allowed back-office automation, predictive operations, intelligent transport assets, and new customer experience models. These new technologies are digitizing the entire end-to-end transport process of order management, contracting, delivering, and payment. The digital transformation in the transportation industry has proved to be a competitive catalyst for improving the ROI of any company. As a result, digital innovation from connected warehouses to new autonomous last-mile delivery services has expanded the relevance and presence of TMS, turning the age-old industry into an exciting place to accelerate change in order to enhance society. The ongoing digital transformation in the transport sector, which aims to boost productivity performance by facilitating innovation and reducing the costs of a variety of business processes, is expected to drive the TMS market.
Autonomous and connected vehicles to improve the transport and logistics industry
The use of autonomous vehicles in the transport and logistics field has increased over the last few years. Growing technological developments in AI and growing investment in the development of sensors and vision technologies are fueling the growth of autonomous vehicles to transform the way vehicles are assembled, operated, used, and serviced. Autonomous vehicles are aiming to transform logistics from trucks to last-mile robots by unlocking new levels of safety, efficiency, and quality. Many companies are working to speed up the acceptance of fully driverless vehicles. For example, Google and Tesla have made substantial advances in driverless automated vehicles. Tesla, the leading producer of electric vehicles, is undertaking measures to incorporate fully autonomous heavy-duty freight vehicles. Likewise, companies such as Amazon and UPS are investing in the production of flying drones to automate delivery processes.
Increasing concerns over data security
The risks of data misuse and theft are rising alongside the digitization of processes by shippers, forwarders, transport companies, and infrastructure operators. As per the study, the logistics industry could have experienced a financial loss of USD 7 billion by 2025. Enterprises have sensitive data that must be secured in order to prevent data breaches and fraud as it can affect the credibility of companies. Company data can leak over the Internet and may be accessed by unauthorized users, which is a growing concern. For example, TMS requires a multi-tenant architecture in which a single version of the software is run on a server shared by multiple customers. Here, there is a chance that the company's customers will be able to access the data of competitors. These security concerns related to the data access by unauthorized users will also threaten the data security of the enterprise and the competitive position of the enterprise. As per Hornet Security, the logistics industry is the second most targeted area by attackers. As a result, these security and privacy concerns increase the level of concern among companies, thereby limiting the growth of the TMS market during the forecast period.
Slow adoption of TMS solution owing to high capital investment
The digitalization of transport operations requires a high level of capital investment, which includes the installation of automation equipment, software, and solutions that incur high costs. Replacing existing processes is expensive. Another factor that inhibits the development of the TMS market is slow adoption due to the complex integration of multiple IoT platforms, various protocols, and a large number of APIs. The adoption of TMS solutions is slowing down owing to the reluctance of companies to switch from manual practices to a digitalized process requiring high capital re-investment. Many companies have a relaxed attitude towards emerging digital technologies and use their intuition rather than adopting digital technologies to make better business decisions. As a result, companies with limited financial resources are unable to opt for automation systems, thus serving as a restraint to the growth of the TMS market.
Global Transportation Management System Market has been segregated into Components, Deployment, and Industry.
By Component, the global market has been segregated into solutions, hardware, and services.
By Deployment, the global transportation management system market has been segmented into on-premise and cloud.
By Industry, the global transportation management system market has been segmented into Retail, Travel and Tourism, Healthcare, Construction and Mining, and Others.
Transportation Management System Market by region has been segmented into North America, Europe, Asia Pacific, the Middle East and Africa, and South America.
North America to foster the global market
North America had the highest market share in 2018, with a market valuation of USD 1,241.0 million; the market is projected to record a CAGR of 5.9% over the forecast period. The growth in the North American market is influenced by the presence of major transport management solutions providers such as Oracle Corporation, JDA Software Group, and CTSI Global, among others. Moreover, the early adoption of technology and an increase in demand for TMS systems from the e-commerce sector in the area are expected to further fuel the growth of the transportation system market in North America in the immediate future.
The market for transport management systems is highly competitive. This market has an immense potential to expand due to rapid industrialization. As a result, vendors began targeting untapped smaller companies. This is fueling the industry to reach every corner of the business.
In April 2018, Precision Software launched its Common Carrier Platform to ease the boarding of new carriers. The Precision's Common Carrier Platform sets out a standard onboarding process that can be used globally. The onboarding process has been dramatically streamlined to allow carriers of all sizes to access the company’s multi-carrier network. Precision Software has an unrivaled network of over 5,000 configurable and accredited carriers in every region of the world, helping multinational businesses handle more than 3 billion shipments annually.
This report provides projections for revenue growth at international, regional, and country levels and examines the latest developments and prospects in the industry in each of the sub-sectors from 2017 to 2025. For this analysis, MRFR has segregated the global transportation management system market report based on component, deployment, industry, and region.
Frequently Asked Questions (FAQ) :
The transportation management system (TMS) market is anticipated to register 6.7% CAGR over 2025.
Digitization of the transportation industry is supposed to catalyze market expansion.
The transportation management system (TMS) market, by component, is segmented into solution, services, and hardware.
Some key players of the transportation management system (TMS) market are Oracle Corporation (US), Manhattan Associates Inc. (US), JDA Software Group, Inc. (US), Descartes Systems Group Inc. (Canada), and SAP SE (Germany), among others.
The transportation management system (TMS) market in North America is expected to register 5.9% CAGR.