If it’s a Buyer’s Market for Freight Rates, Who Needs a Transportation Management System


It’s a common situation: When an industry is hot or the market is roaring, companies spend so much time serving customers that they rarely take the time to look internally at what efficiencies or process improvements could be made.

That’s certainly the case in transportation now. “We’re very much in a buyer’s market right now, with rates falling significantly compared to 2018,” JP Wiggins, 3Gtms’ vice president of logistics, told Logistics Management.

But a bustling market won’t keep up this pace forever, and companies can avoid drastic swings by investing now in key transportation technology, such as a transportation management system (TMS). Unfortunately, Wiggins, notes, “TMS sales are higher during recessionary periods, which is basically an indicator of companies that ‘waited too long’ to invest in the technology.”

And a slowdown may come sooner rather than later, with some economists predicting a downturn in 2020, which creates a tougher market for shippers.

In this discussion with Logistics Management, Wiggins covers the challenges shippers should expect with an economic slowdown and how a transportation management system can save money in any freight environment. From the discussion:

According to Gartner, most organizations (approximately 75%) see an average operational cost savings from a TMS between 5% and 15% (with most companies using 5% as a very conservative estimate). In some instances—and particularly for organiza­tions that have not previously used a TMS—an operational cost savings of more than 15% is possible….

Along with the cost savings that companies get from implementing TMS, most also experience 5% to 10% productivity gains from the new software. These gains come from several different sources, not the least of which is the “control tower” view that all divisions and business units get when their organizations implement a unified, cloud-based TMS. Concurrently, the system vastly improves functions like route optimization, mode selection, and carrier utilization, all of which play critical roles in the overall transportation picture.

Get the full view of why waiting for a slowdown is not the time to look for a TMS; and why implementing cost savings now – like Gerber Plumbing Fixtures did and saw near-immediate savings – helps even out the swings of the economy and ensures you’re maximizing productivity no matter the market conditions.

Learn how a TMS saves money in any freight environment.





Publish date

November 4, 2019



Subscribe to our blog