A transportation management system (TMS) is a subset of supply chain management and is centered mainly on transportation and logistics. The increasing use of cloud computing technologies for managing supply chain activities is one of the major trends prevailing in the transportation management systems market. Cloud-based deployments generally need less customization and configuration. These two factors are driving down lifecycle costs, making web-based applications more attractive and appealing to shippers. Retailers across the globe have realized the importance of technology for achieving real-time visibility of operations to track products as they leave manufacturing facility and move through the supply chain. Thus, retailers are gradually moving away from platform-based solutions and are switching to cloud-based technologies. Cloud technologies enable retailers to process huge customer data faster, better match customer demand with a sales season, and offer personalized solutions. Thus, cloud technologies enable mass customization, which is of growing interest to both manufacturers and retailers.
The increasing preference for SaaS based TMS solutions is the major factor driving sales growth in the TMS market. Furthermore, the need to replace and update the existing and conventional transportation management systems is expected to support the demand for advanced transportation management solutions. However, lack of awareness among end-users coupled with high deployment cost is the major inhibitor to the growth of the market. Nevertheless, the integration of cloud computing and Radio Frequency Identification (RFID) technologies with supply chain management systems will offer healthy opportunities for the growth of TMS Market over the forecast period.
The global market for transportation management systems stood at US$ 9,600.8 mn in 2016. Rising at a healthy CAGR of 13.6% from 2017 to 2025, the opportunity in this market is likely to touch US$ 30,044.1 mn by the end of 2025.
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On the basis of the geography, the global market has been categorized into North America, Europe, Asia Pacific, the Middle East and Africa and Latin America. North America, closely followed by Europe, reports a greater deployment of TMS solutions, compared to other regions. In 2016, North America held over 37.5% of the global market and is expected to remain dominant over the next few years. Along with the proliferation of cloud-computing technologies, the increasing use of RFID technology in the supply chain system has helped the market gain momentum in the region.
On the basis of end-use applications, the global TMS market is classified into: electrical and electronics, industrial, food and beverage, retail, transportation and logistics and others. Transportation and logistics held the largest share of the global market in 2016 and is expected to record steady growth from 2017 to 2025. Transportation and logistics companies across the globe are continually investing in transportation management software to improve operational efficiency, reduce cost, and enable themselves to run their freight management functions more effectively.
Furthermore, the report also segments the transportation management systems market on the basis of software deployment methods in to on-premise and on-demand solutions. On-premise solutions accounted for the maximum revenue share in 2016. Although, on-premise is expected to remain the largest application segment over the forecast period, on-demand solutions are expected to witness faster growth during the same period. On-demand TMS offers complete transportation planning, execution, procurement, and transportation visibility, improving transportation efficiency and achieving cost benefits. Thus, the global capabilities of on-demand solutions have ensured compliance by offering supply chain visibility and access to data meeting multi-regional regulations. With the shippers and transport companies increasingly preferring inter-modal transportation, the demand for on-demand solutions is expected witness robust growth over the forecast period from 2017 to 2025.
The regional analysis of the transportation management systems market gives in-depth insights into the current trends prevailing in different regions including North America, Europe, Asia Pacific, and Rest of the World (RoW). Although North America was the largest TMS market in 2016, Asia Pacific is expected to pose as a stiff competitor to the developed markets of North America and Europe. A favorable trade environment in the region is supporting the growth of the logistics network in the region, which in turn is encouraging the transport service and logistics companies to increasingly deploy transportation management solutions for managing fleets of vehicles, planning and execution, and enhancing operational visibility.