Transportation management is gaining strategic importance

Descartes Systems Group, a leading software-as-a-service provider for logistics companies, has released the results of its ninth annual global transportation management benchmark survey. For the study, Descartes and SAPIO Research surveyed 616 respondents, consisting of an equal number of logistics service providers (brokers, freight forwarders and 3PL providers) and shippers (manufacturers, distributors and retailers) from a variety of industries. The goal of the survey was to assess the current role of transportation management, identify the most effective technologies and competitive strategies, and provide an outlook on future investments in transportation IT. Respondents came from the USA, Canada and Western Europe.

Transportation no longer just a cost factor

The study shows that 81% of the more than 600 shippers and logistics service providers surveyed consider transport management to be a differentiating feature or strategic competitive advantage. This is the highest figure since the study began and shows the extent to which transport management now contributes to company development and customer satisfaction. At the same time, the proportion of those who consider transportation to be merely a basic service or unimportant has fallen to 19 percent, the lowest level since the survey began.

«This year's survey clearly shows that transportation is no longer seen by companies as just a cost factor, but increasingly as a strategic driver of customer value and business growth,» says Mike Hane, Director of Product Marketing for Transportation Management at Descartes, adding: «This shift is supported by increased investment in transportation management systems (TMS), according to the survey results: Companies are looking to further integrate automation and AI into their transportation management processes to increase performance and value.»

Digitalized processes: still room for improvement

Although the freight forwarders and logistics service providers surveyed increasingly recognize TMS as an essential solution in modern technology landscapes, there are still significant gaps in automation and digital maturity. Only 17% of respondents have fully automated their processes, while over a third rely heavily or predominantly on manual processes. This digital divide is particularly pronounced between companies with industry-leading financial performance (51 percent fully automated) and those with below-average financial performance (five percent fully automated). The latter lag significantly behind in the areas of automation, AI usage and growth expectations.

The use of generative AI shows a very high level of activity: 96% of all respondents use it in their operational processes. The three most common use cases are data entry (41%), route and load optimization (39%) and AI-supported freight forecasts as well as automated load allocation and capacity planning (35% each). The few companies (four percent) that do not use generative AI tend to classify transportation management as a mandatory function and are more likely to expect little to no growth in the next two years.

Willingness to invest in logistics IT

Other key findings of the study include increasing TMS investment, more focus on security and positive growth prospects: 80 percent of respondents plan to increase IT spending on TMS with a focus on performance management, visibility and fleet management. The monitoring of carriers and freight forwarders (insurance, security, fraud prevention) is one of the most important TMS functions, with respondents from North America ranking this function seven percent higher than their European counterparts. Overall, 72 percent of companies expect annual sales growth of at least five percent over the next two years.

Source: Descartes