The Assertion Most Shippers Don’t Use a TMS is Tired and False - Let’s Do Better
For years it's seemed like every article on technology adoption in the logistics industry states an old, unsubstantiated “fact” that (insert made up number here) percentage of shippers who could benefit from a TMS don’t use one. The intent is to give the impression that every shipper with a supply chain smaller than Walmart's or an IT budget less than seven figures is still hand writing Bills of Lading and faxing load sheets to carriers.
This is simply not true. Companies of all sizes are using TMS platforms and other logistics technology very effectively. If anything, it could be argued that there are too many TMS platforms. Between 3rd party applications and TMS-like offerings from all types of brokers and carriers, all the basic functions of a TMS are covered for most shippers that actually want them. The core functionality provided by a TMS has already been commoditized.
I’d also argue that the majority of companies with even minimal shipping volume and still not using technology are not doing so for lack of awareness or willingness to try new things. It’s a failure on the part of technology providers to show them enough value and create a compelling reason to change. In other words, the solutions as they are presented are not good enough.
What the industry doesn’t need is more bloated TMS technology that tries to be everything to everyone. It’s this approach that has built the perception that TMS systems and other logistics technologies are expensive and hard to implement.
Yet, it’s in this void where new opportunity lies and what’s exciting about where the logistics industry is heading right now. Disruption is happening thanks to a new approach by new providers who are successfully taking on old supply chain and logistics problems. Niche technology players are creating effective solutions in the space that do many things better than the large TMS providers.
Today, a modern logistics operation must be a connected “technology stack” of best in class applications that speak and exchange data together through API’s and other advancements for sharing information. With a seamless flow between systems, shippers and logistics providers can leverage applications that are best for the tasks they need done. This is in contrast to the dated approach of using a single, big logistics platform that does everything, but none of it very well.
Two examples of companies successfully doing this are Project 44, with their innovative use of APIs to connect logistics partners, and Catapult International's suite of rate and contract management tools. These companies offer a fresh approach that solves problems where many of the large TMS platforms come up short.
Let’s make the Technology Stack the new TMS.