December 2022, Forbes, Steve Banker
The Network Effect
The first of the transportation trends is the network effect is at the heart of supply chain transformation. Essentially, the network effect exists when all components of the supply chain technology ecosystem work together to improve the performance of the end-to-end supply chain.
From a transportation standpoint, the network effect relies on communication between trading partners on a public cloud application to make freight moves more efficient. The more entities on the network, the more powerful the network synergies are. A network application can mean more efficiently matching loads with capacity, using visibility tools to predict more accurate ETAs, optimizing routes, and ensuring that trucks can be loaded and unloaded as efficiently as possible. Sustainability is a byproduct of the network effect. The identification of good backhaul opportunities, load consolidation, and route optimization mean less trucks on the road.
Transportation Management System Innovation
The second of the transportation trends is innovation in transportation management systems (TMS). Historically, transportation management systems have offered a strong ROI. The primary reason companies buy a TMS is for freight savings. These freight savings can be attributed to simulation and network design, load consolidation and lower cost mode selections, and multi-stop route optimization. As freight costs have continued to rise, companies have looked more and more to their TMS to mitigate these rising costs. A big reason for TMS growth is due to the fact that technology has been steadily improving over the last few years. There are three innovation in particular that are playing a big role.