Transportation Management System Market Size & Share Analysis - Trends, Drivers, Competitive Landscape, and Forecasts (2024 - 2030)

Transportation Management System Market Size

Transportation Management System Market Trends & Drivers

Cloud-Based TMS Solutions Are Major Market Trend

• Digital technologies are driving revolutions for companies in the transportation domain, and while large firms have ample funds to have a proper IT setup, SMEs do not.
• Since IT expenses are high, startups and SMEs go with cloud-based transportation management systems because they eliminate the need to create a dedicated IT department in the organization. According to reports, around 83% of the SMEs are using cloud-based TMS.
• From an IT point of view, a cloud-based TMS supports faster deployments, needs less time for installation and training, and provides automatic updates, along with modern features.
• These solutions offer accessibility, flexibility, business scalability, and easy execution and maintenance. All these benefits make them an attractive choice for transportation companies and enhance overall supply chain efficiency.
• Cloud-based TMS offers a simple platform to manage transportation and logistics processes. It permits collaboration among stakeholders, as well as enables real-time access to data.
• These solutions have the capability to integrate with other supply chain management systems, such as carrier management systems (CMS), warehouse management systems (WMS), and enterprise resource planning (ERP) systems.

Expanding E-Commerce Sector Fuels Market Prosperity

• Globally, there were 2.64 billion online buyers in 2023, which was more than 33% of the world’s total population; this means 1 out of 3 people shop online.
• The market is growing due to the increase in the number of e-commerce website users. Around 67% of the customer buying journeys include internet searches. According to the World Economic Forum, the penetration rate of e-commerce will go up to 17% by 2025.
• The rise in the number of internet users with a higher disposable income is the primary driver of e-commerce growth across the globe.
• This growth has fueled the volume of shipments that need to be handled and delivered. Effective supply chain management and logistics solutions are needed to meet the rising demand for freight services.

Data Security Challenges Impede Market Advancement

• TMS platforms have sensitive information, such as financial data, customer data, shipment information, and proprietary business information. Any data leakage or negligence can affect the company as well as the customer.
• Cybersecurity threats, such as phishing scams, ransomware, malware attacks, and data breaches, can also affect the TMS platforms. Criminals get financial information, valuable data, and money from businesses by attacking this platform, which acts as a major challenge for TMS security.
• Several businesses, especially those in critical sectors, such as finance, pharmaceutical, and healthcare, need to follow unique data security and privacy laws. There could be legal consequences, fines, and harm to the business's reputation if these regulations are not met.
• TMS platforms and stakeholders are connected with each other since they play a crucial role in the supply chain, including suppliers, carriers, and third-party logistics providers. Any weakness in these systems can expose confidential data and damage the business.

Transportation Management System Industry Outlook

Component Assessment

• Solutions are the largest component, with a market share of 50% in 2024. This dominance is due to the need for lower shipping charges, inventory handling, delivery tracking, warehousing efficiency augmentation, and customer service enhancement.
• The services category is expected to witness the highest CAGR, of 20.4%, from 2024 to 2030. This will be due to the rising demand for consulting, deployment, and training services for these solutions, as TMS is a relatively new concept even for established companies.

This segment is divided into three categories:

• Solutions (Largest Component)
• Hardware
• Services (Fastest-Growing Component)

Deployment Assessment

• The on-premises category is the larger category, with a market share of 70% in 2024. This is because many distribution and production companies prefer the on-premise deployment mode for transportation management systems.
• This is due to numerous advantages this deployment type offers, such as better control over customization, easy access to the server, reasonable cost, scalability, accessibility, and overall safety.
• The cloud bifurcation will have the higher CAGR, of 20.2%, from 2024 to 2030 in the market. Cloud-based transportation management systems lessen the reliance on onsite hardware, while offering rapid and easy installation. Logistics providers, shippers, and vendors get major planning and optimization benefits.
• Another major reason for the growth of the market in this bifurcation will be the lower cost of cloud-based solutions than those deployed on premises. As the volume of data is increasing, organizations are demanding cloud-based TMS solutions to reduce operational costs.

During the study, two deployment modes were analyzed:

• On-Premises (Larger Category)
• Cloud (Faster-Growing Category)

Transportation Mode Assessment

• The roadways category is the largest, with a market share of 40% in 2024. Roadways are the preferred mode of transportation because of the expansive networks of roads and their relative imperviousness to terrain, which makes more destinations accessible compared to the other modes.
• The growing e-commerce sector and low-cost transportation advantage of roads are responsible for the rising adoption of TMS for real-time tracking, route optimization, and last-mile delivery among companies using roads for logistics.
• Moreover, the efficiency of road transportation logistics is increased by incorporating AI and IoT technologies in TMS solutions.
• Maritime is the fastest-growing category, at a CAGR of 20.5% from 2024 to 2030 in the market. This mode of transportation is preferred for long-distance, international transportation of goods in massive volumes.
• TMS solutions are being integrated into maritime logistics to increase the efficiency of ports, maritime transportation, and shipping management.
• Regulation oversight, continuous monitoring, and route optimization have become essential features in TMS for businesses that utilize ships as their primary means of transport.

During the study, the transportation modes were analyzed:

• Roadways (Largest Category)
• Railways
• Airways
• Maritime (Fastest-Growing Category)

Vertical Assessment

• The retail and e-commerce category held the largest market share, of 30%, in 2024.
• The usage of TMS to enhance the customer experience, accelerate deliveries, and handle huge freight quantities is driving the market in this division.
• TMS is widely being utilized by retailers and e-commerce businesses for inventory management, route optimization, and real-time tracking, to enable rapid shipping and affordability.
• The healthcare and pharmaceutical category’s CAGR, of 20.7%, will be the highest in the market. This growth is owing to the rising demand for drugs, blood & tissue products, and other pharmaceutical goods around the world. On the other hand, logistics troubles and global supply chain issues often create problems for organizations shipping these products.
• Therefore, TMS solutions are being considered by the healthcare and pharmaceutical sector to overcome these challenges, have control over their transportation network, and save shipping costs.
• TMS assists workers in their daily lives and minimizes administrative responsibilities, by smoothing the healthcare logistics process.

During the study, these verticals were considered:

• Retail and E-commerce (Largest Category)
• Healthcare and Pharmaceutical (Fastest-Growing Category)
• Manufacturing
• Food and Beverages
• Automotive
• Energy and Utilities
• Government
• Others

Regional Assessment

• North America is the largest region, with a market share of 45% in 2024. The dominance of the region is due to government policies and regulations in support of logistics businesses and those that seek to safeguard customer data.
• This regional market is seeing rapid development due to the increasing investments in smart cities and spiking utilization of smart, connected machines.
• Many IT vendors are working to innovate TMS solutions with AI, ML, and analytics, which will further contribute to the growth of the market.
• APAC is the fastest-growing region, with a CAGR of 20.3% from 2024 to 2030. This is because of the existence of a huge and growing retail and e-commerce sector in India, China, Indonesia, and Singapore.
• Moreover, the ASEAN Economic Community (AEC) implements regulations and creates economic relationships in the region, which has been driving trade volumes in the region.

These regions and countries were analyzed in this report:

• North America (Largest Regional Market)
  • U.S. (Larger and Faster-Growing Country Market)
  • Canada
• Europe
  • Germany (Fastest-Growing Country Market)
  • U.K. (Largest Country Market)
  • France
  • Italy
  • Spain
  • Rest of Europe
• Asia-Pacific (Fastest-Growing Regional Market)
  • China (Largest and Fastest-Growing Country Market)
  • Japan
  • India
  • South Korea
  • Australia
  • Rest of APAC
• Latin America (LATAM)
  • Brazil (Largest Country Market)
  • Mexico (Fastest-Growing Country Market)
  • Rest of LATAM
• Middle East and Africa (MEA)
  • Saudi Arabia
  • South Africa
  • U.A.E. (Largest and Fastest-Growing Country Market)
  • Rest of MEA

Transportation Management System Share

A high amount of money is being invested in research and development in order to augment the product range, which will eventually help the overall market grow. Partnerships, mergers and acquisitions, collaborations, and agreements are preferred by the major players to expand their global presence. One of the main focus areas for IT vendors is to reduce operational costs for transportation and logistics firms.

Transportation Management System Industry News

• Manhattan Active Yard Management solution was launched by Manhattan Associates in May 2023. This works smoothly with its storehouse and transportation management solution.
• Trimble acquired Transporeon in April 2023. Transporeon serves a global network of 150,000 carriers and 1,400 shippers and retailers with a comprehensive group of settlement, monitoring, execution, planning, and sourcing tools.
• Localz was acquired by Descartes in April 2023. Localz’s technology helps transform the customer delivery experience by integrating real-time vehicle position tracking and conversations.
• Blume Global was acquired by WiseTech Global in February 2023 to support intermodal rail in North America.