Transportation management remains a top focus for senior management, as they look to compete in challenging macroeconomic conditions, with customers who no longer accept the degraded service of the recent past.

Shippers and logistics services providers (LSPs) are looking for technology tools to meet the requirements of today’s market. The 2023 Global Transportation Management Benchmark Survey saw continuation of a seven-year pattern of increased spending on transportation-related technology. Transportation management, however, is a broad field that extends beyond the traditional planning-focused TMS to encompass a wider range of capabilities, including real-time visibility, carrier communications, and sourcing and performance dashboards driven by business intelligence (BI). Even with an increase in available funds, shippers and LSPs still must narrow their investment focus to a few areas to make a meaningful difference.

The following three charts from the study’s findings paint a clear picture of where respondents’ transportation management priorities will lie over the next two years.

Today’s Transportation Management Focus

With transportation cost and availability issues subsiding, shippers and LSPs are turning their attention to service and performance (see Figure 1). The movement of data, and using it to improve the customer experience, has become as important as the execution of shipments. Visibility (60%) was the top overall capability for the sixth year, reversing a three-year decline. Carrier sourcing, a new answer option last year, remained second (46%) overall and, despite lower demand, shippers and LSPs are reinforcing their networks to avoid some of the challenges they faced over the last several years. Performance management and BI dashboards experienced a 10% increase in 2023, to 45%, and moved from the seventh to third spot as more companies recognized the value of transportation information that  goes well beyond the transportation organization.

Figure 1: Key Capabilities for Improvement

Source: Descartes

Value for the Future

Despite returning to pre-pandemic shipping volumes, transportation performance stability hasn’t recovered, and customers now expect to have the status of shipments at their fingertips. As a result, shippers and LSPs see that closing the “black holes” in their transportation networks can add the most value to their business (see Figure 2). Overall in 2023, visibility (43%) is expected to deliver significantly more value than any other capability, up 3% from 2022. The next closest overall response was order management (25%), 18% lower than visibility, and driven by those companies where management believes transportation management can be a competitive weapon (27%) and top performer  (34%). Carrier sourcing dropped from the second spot in 2022 (41%) to the fourth spot in 2023 (23%).

Figure 2: Top 5 Areas with Greatest TMS Future Value

Source: Descartes

IT Investment Over the Next Two Years

There’s good alignment with transportation management value and investment for the next two years for the top three most-cited capabilities (visibility, order management and performance management/BI dashboards). For shippers and LSPs, visibility is a journey across transportation modes and supply chain partners. Visibility has been cited as the top IT investment for the last five years and, in 2023, at 52%, it was tied with 2022 results and was 17% higher than any other answer choices (see Figure 3). Visibility is also going more “mainstream” with those companies where management doesn’t believe transportation management is important, and even poorer financial performers are making it their first priority. Order management (35%) moved from the third spot to second and carrier sourcing (32%) dropped from the second to fifth spot. Performance management dashboards (33%) have become an essential part of transportation management and remained in the third spot for the second consecutive year.

Figure 3: Top 5 Future TM Investments 

Source: Descartes

With so many companies recognizing the integral nature of transportation management performance to overall company performance, it’s no surprise that planned spending on transportation-management IT remains robust. The 2023 survey highlights that the disruption and uncertainty of the last two years has transportation organizations tightening their focus on:

  • Better visibility, to become more aware of disruptions as they occur, and make better and more proactive decisions about goods in transit;
  • Improved order-management capabilities, to bring all transportation moves into a single platform, and have greater visibility into transportation demand, and
  • Performance management and BI dashboards, to gain a deeper understanding of carrier and customer performance, and be able to provide that data beyond the transportation organization.

Where is your organization making its transportation management IT investments?

Chris Jones is executive vice president of industry and services with Descartes.Source: https://www.supplychainbrain.com/blogs/1-think-tank/post/37256-visibility-again-dominates-the-transportation-management-agenda-in-2023