2019 Supply Chain Transportation Study
In a microstudy by Manhattan Associates of nearly 100 transportation technology and business leaders, respondents listed real-time visibility, rising costs, limited capacity and optimization as their biggest challenges.
The respondents identified themselves as coming from across a number of industries, including logistics services, food and beverage, wholesale, manufacturing, and consumer goods. They were generally unified in their challenge to deliver a more real-time supply chain. Nearly all shipping modalities were well represented, with overall ground transportation categories like parcel, LTL and truckload coming in about 20-30 percent higher in usage than private fleet, ocean, air and intermodal.
Direct to Consumer
Rising direct-to-consumer fulfillment expectations cascade into every industry and force supply chain leaders to look toward new innovations in order to thrive. So, it is perhaps not surprising to see survey respondents indicate a focus on investments that reduces friction and increases efficiency when it comes to the transport of goods. As an indicator of this focus, 75 percent of those supply chain leaders indicated that real-time visibility was very important to their business. Perhaps more than any other element, insight into real-time tracking at the conveyance, shipment and even the item level is becoming critical to maximizing the efficiency of not only transportation assets but also warehouse and yard assets that support the transportation vehicles.
However, supporting more fulfillment options – and doing so more rapidly – has created a growing concern about increasing costs among those surveyed. While only eight percent of respondents expect to see increases in rail shipment costs, an overwhelming 42 percent expect to see an increase in truckload costs. As a group, 8 of 10 people surveyed expect to see their overall transportation costs increase notably over the next two years. When respondents listed their priorities, the clear leader was predictably reducing overall transportation costs, as indicated by 39 percent of those surveyed. Achieving real-time visibility was the most-selected second priority for nearly 28 percent of respondents.
The combination of an increasing number of less-expensive (or even free) direct-to-consumer deliveries with rising transportation costs due to capacity constraints and decreased efficiency is causing transportation leaders to begin exploring transportation management systems (TMS) – especially those engineered specifically to deal with the constraints of the modern supply chain. Nearly half (44 percent) of the respondents indicated that they plan to initiate a TMS project in the next two years. One in four will be implementing a TMS solution for the first time, indicating that a wider range of businesses is being impacted by the demands of omnichannel fulfillment and more companies require a TMS solution.
In order to combat costs, a modern TMS solution must be able to learn. It has to provide an initial planning optimization for a desired outcome. But, it also needs the ability to adapt to real-time visibility across the network once it is in motion. Fluidity due to capacity constraints, rising expectations of delivery speed and the vastness of global networks makes on-the-fly optimization paramount. As a group, survey respondents agreed, listing optimization as their third-largest challenge, behind visibility and rising costs. Executive-level respondents even indicated that optimization was the highest priority over the next two years.
Just the Beginning
The survey results revealed that respondents are diversified in their use of transportation modalities; they are focused on managing transportation costs, and they place a high priority on real-time visibility throughout their transportation network in order to deliver on the customer promise as profitably as possible.
As investments in TMS solutions increase over the next two years, the outlook amongst supply chain leaders is positive. They are tackling known challenges and preparing for the unknown. And while the stakes are high, they recognize they cannot conquer omnichannel fulfilment without tools and technology engineered for the modern transportation network.
To find out how Manhattan TMS can help resolve these challenges and reduce transportation costs, check out manh.com/tms.