Home / Blog / Transportation management systems sector to experience more growth

Transportation management systems sector to experience more growth

With trucking expected to grow, so too will the TMS market.
/ Industry News & Trends /

By: Phil Sneed

A new study from Transparency Market Research indicated the global market for TMS will increase at a compound annual growth rate of just over 12 percent from 2016 until 2022.

In 2013, the global TMS sector was estimated at $6.8 billion and by 2022, that market value is projected to jump to $19.2 billion. According to a press release from Transparency Market Research, the spike in demand for TMS is directly related to the growing intermodal transportation sector, of which trucking plays a large role in.

"TMS will increase at a compound annual growth rate of just over 12 percent from 2016 until 2022."

Additionally, many companies that have a hand in transporting materials are currently utilizing older TMS and are lagging behind current and more modern systems. Companies that have are slow to adapt are potentially missing out on the benefits of newer TMS.

Specifics of the report
Regionally, the North American transportation sector has dominated the TMS market, and will continue to do so. The American Trucking Associations noted the future growth of the industry during the summer of 2015, which coincides with the expected increase of TMS.

From now until 2026, the ATA projects total freight tonnage to increase 28.6 percent. This equates to freight revenues also rising to approximately $1.52 trillion annually. In a press release, ATA president and CEO Bill Graves stated this information is vital for decision-makers.

"Knowing where the industry and economy is headed can help shippers and fleets make key business decisions and instruct lawmakers and regulators on the best policies to move our economy forward," said Graves.

Trucking is still expected to be the dominant form of transportation, even though it is projected to experience a slight dip in total tonnage. In 2014, trucking's share of tonnage was 68.8 percent and that number is expected to decline to 64.6 percent in 2026.

Finally, the number of Class 8 trucks in use will grow to just shy of 4 million over the next decade. With many more semi-trailers on the freeway, companies will need a TMS to plan transportation routes, control shipping costs and manage their growing fleet.

TMS growth
Two types of TMS are available for companies to use: on-premise and software as a solution (SaaS). The study from Transparency Market Research stated that on-premise solutions will experience a moderate increase in growth and usage.

The biggest growth regarding TMS is expected to occur with those that are SasS-based. As cloud computing continues to rise in overall usage and becomes even cheaper to utilize, trucking companies will find TMS programs available online without the need to buy more equipment or software licenses. By the time 2022 rolls around, there is a very good chance that the SaaS market for TMS will be larger than its on-premise counterpart.

Transportation management systems are vital to the trucking industry. Without them, fleets would have difficulty mapping out cost and fuel-efficient routes, while having difficulty tracking shipments and deliveries in real time.

Trucking companies unsure about which type of TMS solution to use or upgrade to can know full well that the market for the service is expected to grow, which will translate to numerous options.