Adrian Gonzalez is the president of Adelante SCM, a peer-to-peer learning, networking, and research community for supply chain and logistics professionals.
After 19 years, what else can you say about transportation management systems that you haven't already said?
My wife asked me that question as I was heading out a few weeks ago to give a talk on transportation management systems (TMS) to a group of supply chain and logistics professionals at a CSCMP New England Roundtable meeting. It's a good question, one I hadn't stopped to think about before, so I reflected on it as I drove to the meeting.
First, I verified the math in my head (twice), and my wife was right: I've been an industry analyst now for over 19 years, most of that time focused on transportation management and TMS. I can't tell you how many TMS-related research reports, blog posts, videos, webinars, and presentations I've written or produced over the years, but it's a lot—enough to make you think I've said all I could about TMS already.
The reality is that I do repeat myself a lot because, despite the abundance of evidence out there about the benefits of implementing a TMS, many companies are still managing their transportation operations with spreadsheets and homegrown systems that are decades old. So, I repeat myself because some companies are new to TMS and are learning about the technology and its benefits for the first time, and some companies are like distracted children: You have to tell them over and over again until they finally listen.
The other reality is that there is always something new to talk about. The scope and capabilities of transportation management systems, as well as the vendor landscape, have changed significantly over the years, and the systems continue to evolve. The same is true for the transportation market and the types of challenges and opportunities that shippers and third-party logistics providers face.
Simply put, although transportation management systems have been around for decades, there are plenty of new things to talk about, too many to cover here. But here are some of the trends and developments that rise to the top for me.
Expanding scope and capabilities
At its core, the primary function of a TMS hasn't changed over the years: to help shippers and third-party logistics providers plan and execute processes in the transportation management lifecycle, including (but not limited to) procurement, optimization, routing and scheduling, load tendering, track and trace, freight audit and payment, freight forwarding and brokerage, and business intelligence and analytics.
The things that have changed are:
More powerful optimization capabilities:Â Thanks to the rise of cloud computing, along with advancements in the types of algorithms used, optimization engines today are able to solve more complex problems much faster than before. The scope of transportation optimization goes beyond load consolidation—that is, aggregating less-than-truckload shipments into truckload shipments. It also plays an important role in procurement, zone skipping, mode conversion, cross-docking and pooling, what-if analysis, and various other scenarios.
Increased control tower visibility: The line between TMS and control tower solutions has started to blur, especially when it comes to international, multimode shipments. Leading solutions go beyond providing visibility to shipments and assets. They also enable visibility to orders and stock-keeping units, and they incorporate optimization capabilities (to replan when exceptions occur) and collaboration capabilities (to facilitate communication and the exchange of data and information between trading partners). Leading solutions are also starting to embed machine-learning capabilities and leverage a broader set of data sources—including weather, traffic, location, and social media—to enable predictive capabilities, especially around determining more accurate estimated times of arrival (ETAs).
Improved user experience: In the past, many TMS user interfaces were crammed with too many features and too much information that users didn't need or want to accomplish their tasks. They had nonintuitive workflows that didn't align with the way users were accustomed to working (or with the way they wanted to work); or they forced users to open multiple windows and tabs, and click countless times, to accomplish what should have been a straightforward task. The good news is TMS vendors have started to think beyond features and functions and have started investing heavily, including hiring user interface (UI) and user experience (UE) consulting firms, to improve the usability of their solutions (both desktop and mobile), often with inspiration from social networking and consumer apps.
In addition to these three major changes, TMS providers have also significantly improved their solutions' mobile capabilities along with creating more flexible and configurable architectures that enable companies to drive their own innovation.
Changing vendor landscape
The technology is not the only thing that has changed; who's providing it and how it is delivered has also evolved. There have been many mergers and acquisitions in the TMS space over the years, driven in part by customer demands to replace multiple siloed applications with a single platform that can addresses multiple modes (including parcel and private fleet) and multiple geographies. There's still no single vendor that does it all well, but the market has come a long way in this effort.
Startups (such as Kuebix, Cloud Logistics, 3Gtms, and EmergeTMS) also continue to enter the market, leveraging their newer architectures as a differentiator, as well as new business models, and pricing strategies (such as "freemium" offerings, where a basic version is provided for free and users pay for more advanced functionality) that combine technology with managed services.
I hate putting TMS providers in categories or boxes because in many cases they either fit in multiple boxes or they don't fit any exactly right. But for the sake of simplicity, Figure 1 shows a snapshot of the current TMS vendor landscape. Providers range from vendors that offer a wide variety of supply chain applications (including warehouse management systems) to vendors that offer broad TMS suites (multimode, multigeography) to vendors that offer specialized solutions (a single mode or transportation process). Several third-party logistics providers also offer their own, internally developed TMS solutions.
There are also a variety of other technology solutions that are on the edge of TMS—meaning, they either extend or enhance the capabilities of TMS applications. These "on the edge" solutions focus primarily on transportation network design, modeling, or optimization, or they enable specialized transportation processes like real-time freight visibility, carrier connectivity, and freight-lane matching and collaboration. (See Figure 2.) The two that are getting the most attention today are real-time freight visibility and carrier connectivity.
Real-time freight visibility: A subset of control tower applications, this is one of the hottest segments of the TMS ecosystem and saw a couple of significant acquisitions last year (such as Descartes' acquisition of MacroPoint and Trimble's acquisition of 10-4 Systems). Most leading TMS vendors have partnerships with multiple freight visibility solution providers, such as those listed in Figure 2. Demand for these solutions is being driven by the need for more real-time and accurate visibility to orders, shipments, and trucks in response to more stringent customer service expectations, such as Walmart's "on-time in-full" (OTIF) requirements.
Carrier Connectivity: Electronic data interchange (EDI) still remains well-entrenched in transportation as the means for exchanging data between shippers, carriers, and other transportation partners. The future of carrier and trading partner connectivity, however, is application program interfaces (APIs) and web services (such as XML). APIs and web services provide more real-time data and visibility than EDI, along with other integration and maintenance benefits. Most leading TMS vendors have partnerships with multiple API-based carrier integration partners, including those listed in Figure 2. APIs for less-than-truckload (LTL) carriers are the most mature, but APIs for truckload, parcel, and rail are emerging, as well as APIs for status updates, transit times, and other data sets.
I don't know where I'll be in twenty years, whether I'll still be following the TMS market or not, but I'm pretty sure the technology will continue to evolve in response to market demands, and I'm pretty sure they'll always be something new to talk about.
New Jersey is home to the most congested freight bottleneck in the country for the seventh straight year, according to research from the American Transportation Research Institute (ATRI), released today.
ATRI’s annual list of the Top 100 Truck Bottlenecks aims to highlight the nation’s most congested highways and help local, state, and federal governments target funding to areas most in need of relief. The data show ways to reduce chokepoints, lower emissions, and drive economic growth, according to the researchers.
The 2025 Top Truck Bottleneck List measures the level of truck-involved congestion at more than 325 locations on the national highway system. The analysis is based on an extensive database of freight truck GPS data and uses several customized software applications and analysis methods, along with terabytes of data from trucking operations, to produce a congestion impact ranking for each location. The bottleneck locations detailed in the latest ATRI list represent the top 100 congested locations, although ATRI continuously monitors more than 325 freight-critical locations, the group said.
For the seventh straight year, the intersection of I-95 and State Route 4 near the George Washington Bridge in Fort Lee, New Jersey, is the top freight bottleneck in the country. The remaining top 10 bottlenecks include: Chicago, I-294 at I-290/I-88; Houston, I-45 at I-69/US 59; Atlanta, I-285 at I-85 (North); Nashville: I-24/I-40 at I-440 (East); Atlanta: I-75 at I-285 (North); Los Angeles, SR 60 at SR 57; Cincinnati, I-71 at I-75; Houston, I-10 at I-45; and Atlanta, I-20 at I-285 (West).
ATRI’s analysis, which utilized data from 2024, found that traffic conditions continue to deteriorate from recent years, partly due to work zones resulting from increased infrastructure investment. Average rush hour truck speeds were 34.2 miles per hour (MPH), down 3% from the previous year. Among the top 10 locations, average rush hour truck speeds were 29.7 MPH.
In addition to squandering time and money, these delays also waste fuel—with trucks burning an estimated 6.4 billion gallons of diesel fuel and producing more than 65 million metric tons of additional carbon emissions while stuck in traffic jams, according to ATRI.
On a positive note, ATRI said its analysis helps quantify the value of infrastructure investment, pointing to improvements at Chicago’s Jane Byrne Interchange as an example. Once the number one truck bottleneck in the country for three years in a row, the recently constructed interchange saw rush hour truck speeds improve by nearly 25% after construction was completed, according to the report.
“Delays inflicted on truckers by congestion are the equivalent of 436,000 drivers sitting idle for an entire year,” ATRI President and COO Rebecca Brewster said in a statement announcing the findings. “These metrics are getting worse, but the good news is that states do not need to accept the status quo. Illinois was once home to the top bottleneck in the country, but following a sustained effort to expand capacity, the Jane Byrne Interchange in Chicago no longer ranks in the top 10. This data gives policymakers a road map to reduce chokepoints, lower emissions, and drive economic growth.”
It’s getting a little easier to find warehouse space in the U.S., as the frantic construction pace of recent years declined to pre-pandemic levels in the fourth quarter of 2024, in line with rising vacancies, according to a report from real estate firm Colliers.
Those trends played out as the gap between new building supply and tenants’ demand narrowed during 2024, the firm said in its “U.S. Industrial Market Outlook Report / Q4 2024.” By the numbers, developers delivered 400 million square feet for the year, 34% below the record 607 million square feet completed in 2023. And net absorption, a key measure of demand, declined by 27%, to 168 million square feet.
Consequently, the U.S. industrial vacancy rate rose by 126 basis points, to 6.8%, as construction activity normalized at year-end to pre-pandemic levels of below 300 million square feet. With supply and demand nearing equilibrium in 2025, the vacancy rate is expected to peak at around 7% before starting to fall again.
Thanks to those market conditions, renters of warehouse space should begin to see some relief from the steep rent hikes they’re seen in recent years. According to Colliers, rent growth decelerated in 2024 after nine consecutive quarters of year-over-year increases surpassing 10%. Average warehouse and distribution rents rose by 5% to $10.12/SF triple net, and rents in some markets actually declined following a period of unprecedented growth when increases often exceeded 25% year-over-year. As the market adjusts, rents are projected to stabilize in 2025, rising between 2% and 5%, in line with historical averages.
In 2024, there were 125 new occupancies of 500,000 square feet or more, led by third-party logistics (3PL) providers, followed by manufacturing companies. Demand peaked in the fourth quarter at 53 million square feet, while the first quarter had the lowest activity at 28 million square feet — the lowest quarterly tally since 2012.
In its economic outlook for the future, Colliers said the U.S. economy remains strong by most measures; with low unemployment, consumer spending surpassing expectations, positive GDP growth, and signs of improvement in manufacturing. However businesses still face challenges including persistent inflation, the lowest hiring rate since 2010, and uncertainties surrounding tariffs, migration, and policies introduced by the new Trump Administration.
As U.S. businesses count down the days until the expiration of the Trump Administration’s monthlong pause of tariffs on Canada and Mexico, a report from Uber Freight says the tariffs will likely be avoided through an extended agreement, since the potential for damaging consequences would be so severe for all parties.
If the tariffs occurred, they could push U.S. inflation higher, adding $1,000 to $1,200 to the average person's cost of living. And relief from interest rates would likely not come to the rescue, since inflation is already above the Fed's target, delaying further rate cuts.
A potential impact of the tariffs in the long run might be to boost domestic freight by giving local manufacturers an edge. However, the magnitude and sudden implementation of these tariffs means we likely won't see such benefits for a while, and the immediate damage will be more significant in the meantime, Uber Freight said in its “2025 Q1 Market update & outlook.”
That market volatility comes even as tough times continue in the freight market. In the U.S. full truckload sector, the cost per loaded mile currently exceeds spot rates significantly, which will likely push rate increases.
However, in the first quarter of 2025, spot rates are now falling, as they usually do in February following the winter peak. According to Uber Freight, this situation arose after truck operating costs rose 2 cents/mile in 2023 despite a 9-cent diesel price decline, thanks to increases in insurance (+13%), truck and trailer costs (+9%), and driver wages (+8%). Costs then fell 2 cents/mile in 2024, resulting in stable costs over the past two years.
Fortunately, Uber Freight predicts that the freight cycle could soon begin to turn, as signs of a recovery are emerging despite weak current demand. A measure of manufacturing growth called the ISM PMI edged up to 50.9 in December, surpassing the expansion threshold for the first time in 26 months.
Accordingly, new orders and production increased while employment stabilized. That means the U.S. manufacturing economy appears to be expanding after a prolonged period of contraction, signaling a positive outlook for freight demand, Uber Freight said.
The surge comes as the U.S. imposed a new 10% tariff on Chinese goods as of February 4, while pausing a more aggressive 25% tariffs on imports from Mexico and Canada until March, Descartes said in its “February Global Shipping Report.”
So far, ports are handling the surge well, with overall port transit time delays not significantly lengthening at the top 10 U.S. ports, despite elevated volumes for a seventh consecutive month. But the future may look more cloudy; businesses with global supply chains are coping with heightened uncertainty as they eye the new U.S. tariffs on China, continuing trade policy tensions, and ongoing geopolitical instability in the Middle East, Descartes said.
“The impact of new and potential tariffs, coupled with a late Chinese Lunar New Year (January 29 – February 12), may have contributed to higher U.S. container imports in January,” Jackson Wood, Director, Industry Strategy at Descartes, said in a release. “These trade policy developments add significant uncertainty to global supply chains, increasing concerns about rising import costs and supply chain disruptions. As trade tensions escalate, businesses and consumers alike may face the risk of higher prices and prolonged market volatility.”
New York-based Cofactr will now integrate Factor.io’s capabilities into its unified platform, a supply chain and logistics management tool that streamlines production, processes, and policies for critical hardware manufacturers. The combined platform will give users complete visibility into the status of every part in their Bill of Materials (BOM), across the end-to-end direct material management process, the firm said.
Those capabilities are particularly crucial for Cofactr’s core customer base, which include manufacturers in high-compliance, highly regulated sectors such as defense, aerospace, robotics, and medtech.
“Whether an organization is supplying U.S. government agencies with critical hardware or working to meet ambitious product goals in an emerging space, they’re all looking for new ways to optimize old processes that stand between them and their need to iterate at breakneck speeds,” Matthew Haber, CEO and Co-founder of Cofactr, said in a release. “Through this acquisition, we’re giving them another way to do that with acute visibility into their full bill of materials across the many suppliers they work with, directly through our platform.”
“Poor data quality in the supply chain has always been a root cause of delays that create unnecessary costs and interfere with an organization’s speed to market. For manufacturers, especially those in regulated industries, manually cross-checking hundreds of supplier communications against ERP information while navigating other complex processes and policies is a recipe for disaster,” Shultz said. “With Cofactr, we’re now working with the best in the industry to scale our ability to eliminate time-consuming tasks and increase process efficiencies so manufacturers can instead focus on building their products.”