AAt all levels we’ve seen vendors building out their suites. One area is better support for additional modes
and parcel. In the past, these systems mostly focused on
over-the-road truck or less-than-truckload shipments. But
they didn’t manage the entire process. We’ve seen parcel
added to a common platform. We’ve seen more support for
international moves.
QHow about business intelligence?
AWe’ve had reporting on carrier performance in TMS for a while. But it was typically after the fact. The next
cool thing in TMS is the inclusion of
embedded analytics, which can be used as
part of the decision-making process. For
example, a shipper creates a carrier scorecard. Then, when it goes through the carrier selection process, that scorecard can
be used to handicap a carrier. The low-cost carrier might turn out to have a high
damage rate, so I would penalize him and
go with a slightly higher-cost carrier that
provides better-quality service.
Some of the SaaS vendors are also doing
some pretty interesting things in this area.
Now that they have enough data flowing
across their network, they can provide
benchmark information that shows the
normal rate on this lane. They then provide that information to both the carrier
and the shipper. That benchmark information was very difficult to get in the past because you had
to do a survey and get people to share the data. Now it’s all
there on the platform.
QLast year, you said that fear of the future was driving sales of transportation management software. Is that
still the case?
AComing out of 2009 and into 2010, customers were looking at this technology mostly to
plan for the future because they expected freight rates to
rise and capacity to tighten. They wanted to have the foundation in place when that occurred.
Starting in the summer of 2010, we saw some of characteristics move into the carriers’ favor. We also saw some
capacity issues. And we saw some freight rates becoming a
little higher. It wasn’t dramatic enough yet to say, “Oh my
gosh, I have to do something now.” But it started to play on
previous fears that shippers had better get ready.
I don’t think we’ve gotten to the point where we’re past
the fear. We had a little glimpse of reality this summer, and
it really confirmed to people that some of their concerns
were legitimate and they had better do something.
QAre TMS vendors adding any new features to their systems to encourage shippers to buy?
QFor what type of shipper does a software-as-a-service app make the most sense?
AIt’s inversely related to complexity. For complex ship- pers, at this time, the on-premise systems are still
more robust [than SaaS models], particularly in the area of
planning engines and optimization.
You note that I referred to complexity, not size. I’ve had
really large shippers—a billion dollars in annual freight
spend—that are not really complex; they just move a lot of
goods. I can have a $70 million shipper who uses multiple
modes and makes a lot of shipments per day and does a lot
of LTL consolidation. That $70 million shipper would need
more sophistication than the much larger shipper would.
