Reinventing TMS in the age of e-commerce

In the world of the interconnected supply chain, it’s probably no surprise that the pandemic-fueled e-commerce boom in the United States has also disrupted the transportation market, leading to increased parcel volumes, a tightening truck capacity and an increase in parcel rates, to name but a few of the effects.

Add it all up and these changes are causing some serious supply chain headaches for companies struggling to stay afloat in a competitive retail market. Seeking relief, many shippers are turning to an increasingly diverse lineup of carriers, bringing in smaller regional companies to supplement the “big three” package carriers – UPS Inc., FedEx Corp. and the US Postal Service.

This approach can help, but it also adds new layers of complexity to the already difficult task of tracking individual packages across multiple modes, carriers, intermediaries and sorting centers.

In response, developers of transportation management systems (TMS) are rolling out new features designed to help users meet these challenges, insiders say. These new software capabilities are centered around digitizing data and increasing real-time tracking, which some call “visibility on steroids.”

Taken together, these advancements can help users reduce delivery costs while continuing to meet growing demands, whether it’s consumers who expect Amazon-level next-day delivery service or retail customers. like Walmart who will not tolerate anything less than on-time/complete shipments (OTIF) from suppliers.

I CAN SEE CLEARLY NOW

TMS developers say the key to managing these challenges is better visibility, which is “built” by collecting data at every stage of the transportation and delivery process, typically through tools such as electronic logging devices. (ELD) on trucks, the Internet of Things (IoT) sensors on pallets, and digitized documents such as bills of lading.

“Amazon has changed the way we all expect [logistics] to do,” says Dan Clark, founder of TMS developer Kuebix and vice president of product innovation and strategy for Trimble Inc., which acquired Kuebix in 2020. “A lot of money has been invested in visibility these years, and now we’ve got to put visibility on steroids to meet what customers expect to happen.

This visibility is key to enabling shippers to deploy their TMS platforms in new ways, such as tracking freight across multiple modes, building application programming interfaces (APIs) with regional parcel carriers, or consolidating packages to be delivered to a carrier’s regional hub as part of a “zone hopping strategy,” says Mike Doyle, vice president of product management at Kuebix.

“It’s a game of transparency and visibility today,” adds Clark. “Thus, a TMS goes beyond the definition of just transport management and becomes a ‘network TMS’ that connects to everything and everyone.”

A key factor in building this network is choosing a TMS that is offered on a Software as a Service (SaaS) basis and operates in the cloud, as opposed to servers located at the sender’s premises. This is because cloud-based platforms can automatically pull data from disparate sources and then analyze it, while running the latest software version available. What’s more, SaaS platforms essentially “democratize” the software, making it accessible to small and medium-sized businesses that haven’t traditionally used a TMS because they were out of the market, Clark explains. With the SaaS model, they can also choose just the “micro-services” they need, instead of paying for the whole package, he adds.

DIG INTO DATA

Going with a cloud-based TMS that automatically collects data from ELDs and other sources is also a critical step towards digitizing the mountains of data generated in transport operations and automating processes to improve accuracy and reliability. efficiency, says Daragh Mahon, CIO of Werner Enterprises. Inc., a transportation and logistics service provider that recently adopted a new TMS.

In November, Werner announced that he had made an investment in Mastery Logistics Systems Inc. and would be adopting its “MasterMind” TMS. Mastery is the software startup created by former CEO and co-founder of Coyote Logistics, Jeff Silver, who sold Coyote to UPS Inc. in 2015 and founded his new company in 2019 focusing on collaborative platforms based on the cloud.

Among other benefits, connected and cloud-based TMS systems can boost communication across the entire transportation industry. In Werner’s case, the company can use ELDs, IoT sensors and telematics devices to collect information that can potentially be used to improve operations. Through its new agreement with Mastery, the company plans to tap into this potential and leverage new benefits.

“There’s 80 to 120 pieces of data we can create every second, from temperature to oil pressure to speed – some of it is for safety, some for maintenance,” says Mahon. “We collect it, but we don’t use it to the fullest. … There’s a ton of opportunity there that the industry has yet to explore.

Although carriers have been working for years to connect disparate systems and automate manual processes, the Covid-19 pandemic has reinvigorated those efforts, forcing many changes that were long overdue in the transportation industry, according to Mastery CEO , Jeff Silver.

“There’s so much unnecessary work,” Silver says. “How much time was wasted when people printed out bills of lading, drivers hauled them across the country, then copied and scanned them? It’s a silly amount of absolutely worthless work that’s been happening since 1984 when I joined this company.

But new solutions are now being developed, thanks to TMS systems that enable instant connections with ELDs and PLCs, supporting improved communication, automation and other industry-wide advancements. transports. “TMSs that don’t offer this flexibility will be crippling,” says Silver.

Today, TMS platforms are evolving far beyond their roots in carrier selection and routing to essentially become advanced communication hubs. Cloud-based systems can now provide both connectivity and visibility across large networks. This combination allows even small businesses to take advantage of next-generation TMS tools to solve some of the toughest problems of the e-commerce era.