The global transportation management systems market size to grow at USD 389 billion in 2030 at a CAGR of 17% from the early figures of USD 96 billion in 2021. The transportation management system is turning out to be an integral part of the supply chain management system. It is available as a module of an enterprise resource planning (ERP) system or a supply chain management (SCM) system. It helps users in managing and scheduling both domestic and international shipments and identifying the most efficient and cheapest mode of shipment of goods. Elements of the Transportation Management Systems market value chain include designers & developers, module developers, distribution channels, and end-users.
The job of designers and developers is to create the overall architecture of a transportation management system based on what the client wants. The Module developers do sustainable modules for transportation management systems based on the different needs of end-users in different industries and industry verticals. Transportation management system vendors can market and sell their products through both direct and indirect sales channels.
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With the rise of technology, the logistics industry has changed. The way transportation systems are designed, planned, built, and run changes quickly because of new technologies like artificial intelligence (AI), blockchain, the Internet of Things (IoT), and bigdata. Logistics and transportation require a lot of information and data to be passed back and forth between customers and service providers. Advances in information technology have made it easier for customers and service providers to share information and data quickly. The newest technologies have made it easier to see and control shipments, increasing efficiency and making customers happier.
AI is being used in a number of fields, such as logistics, supply chain, and transportation. More complex ways to process data are needed in transportation management because the amount of data is growing. Internet of Things (IoT) is an idea for a network of devices with electronics, sensors, software, and connectivity that can talk to each other, connect, and share data. The Internet of Things (IoT) has changed the logistics and supply chain industries in a big way. Software-as-a-Service (SaaS)-based TMS is becoming more popular because the SaaS delivery model is flexible and costs less than other options. A big part of the global TMS market is made up of cloud-based services. As the need for customized solutions grows, vendors are introducing more and more advanced software that can be used on-demand.
AI is being used in many industries, including transportation, supply chain, and logistics. Because the amount of data in transportation management is growing, more advanced ways to process data are needed. Internet of Things (IoT) envisions a network of devices with electronics, sensors, software, and connectivity that can talk to each other, connect, and share data.
The Internet of Things (IoT) has completely changed the logistics and supply chain industries. The demand for Software-as-a-Service (SaaS)-based TMS is growing because the SaaS delivery model is both cost-effective and flexible. Cloud-based services make up a big part of the global TMS market. Due to the growing demand for customized solutions, vendors are competing hard and putting out more advanced software that can be used on-demand.
Transportation management systems often help speed up the time it takes from when an order is placed to when it is delivered. They also help reduce the cost of managing inventory, ensure compliance, lower freight costs, and cut the time it takes to keep track of customs paperwork. Transportation management systems' better return on investment (ROI) could be a market driver for the transportation management systems market growth.
When a Transportation Management System is used, the return on investment (ROI) often comes from how well the load is managed. Shippers choose TMS for a number of reasons. TMS solutions are always changing, and ROI is being found in a number of ways. Freight savings can be directly linked to the use of TMS solutions, such as through better procurement negotiations, more efficient routing, and the choice of low-cost modes.
Transportation management systems are made up of solutions that are modular, scalable, and easy to use. They can work with all kinds of transportation. As supply chains grow around the world and get more complicated as a result, TMS providers are choosing to host their newest solutions in the cloud. Companies prefer on-premise solutions because they are worried about data privacy, security breaches, and cyberattacks. Cloud-based solutions are often cheaper and more profitable for organizations that do not have the technical resources to build their own infrastructure.
On-premise solutions, on the other hand, tend to be more expensive because the customer has to buy the necessary hardware and infrastructure and hire staff to keep it running. On-premise solutions also tend to have high costs for implementation and licensing, which can make up as much as 25% of the total cost of the solution. The high costs of on-premise solutions are likely to be a major factor slowing the growth of the TMS market over the next few years.
The growth of the market is likely to be driven by the growth of e-commerce and the high return on investment that comes with using transportation management systems. Demand for this segment is affected by the fact that trade between developed and emerging economies is getting better, which has led to more imports and exports. At the same time, a growing number of factories in places like Mexico and India has also increased the need for raw materials to come in and go out.
These raw materials need to come from different places, so transportation management systems that are both creative and effective are needed. Also, the market for the logistics industry is helped by the growing demand for luxury vehicles in emerging economies. It is because most luxury cars are made in Europe and then shipped to other countries from there. So, the need to track these shipments and make sure they get there on time has led automotive industries to use TMS. Also, parts for cars come from all over the world, which changes the demand for TMS in the industry. So, over the forecast period, the others segment is expected to grow at the second-highest CAGR of 17.0 percent, which creates a lot of opportunities in the said market.
The global transportation management systems market share is segmented by deployment and mode of transportation.
On the basis of deployment, the said market is classified into on-premise and cloud, where the On-Premise segment dominates the market.
The on-premise segment accounted for a market value of USD 48 billion in 2021 and is expected to grow to USD 183 billion by 2030 at a CAGR of 16%. On-premise transportation management systems are set up and run from the user's own server. In 2018, the on-premise segment made the most money, which made up 59% of the global transportation management systems market.
Most manufacturing and distribution companies that have been around for a while still prefer the on-premise deployment mode for transportation management systems solutions. This is because of the safety requirements, how easy it is to access the server, and how much more control the company has over customizing the system. End-use industries are expected to adopt cloud TMS solutions in the coming years as more people learn about the benefits of the cloud and how cheap it is to set up compared to on-premise deployment.
The Cloud segment for the said market segmentation had a significant market value that registered the figures of USD 35 billion in 2021 and grow to USD 149 billion by 2030 at a CAGR of 18%.
In the last few years, cloud-based TMS solutions have become more popular because they are inexpensive to start, easy to set up, and require less hardware. It helps shippers, vendors, and logistics providers plan and optimize in unique ways. Companies are choosing cloud-based TMS solutions because the amount of data being created is growing at an exponential rate. These solutions have proven to be a more cost-effective option than on-premise deployment. This is mainly because the licensing and data storage system costs are lower, and the technical labor is less, which lowers the company's overall operational costs.
When segmented by the mode of transportation, the global transportation management systems market is further classified into Roadways, Railways, and Waterways.
Out of these three categories, the Railways are the most dominant segment among the three segments.
The roadways segment accounts for a market value of USD 35 billion in 2021 and is valued at USD 137 billion by 2030 at a CAGR of 17%.
One of the most common ways to move freight is by road, which is also one of the cheapest ways to move freight compared to other ways. It is also flexible, so it can be loaded and unloaded at any destination. But there are some problems with road transportation, such as the fact that it cannot carry a lot of things, police checkpoints are often set up at multiple points, the roads are not always in good shape, and there is a lot But as long as governments in emerging economies keep working to improve transportation infrastructure, the demand for logistics through roads is likely to grow. This will affect the demand for TMS in the roadways segment.
Railways are the most dominant segment in the said market domain, with a market value that stood at USD 30 billion in 2021 and is valued at USD 125 billion by 2030 at a CAGR of 17%.
The most dominant part of the transportation management systems market is the segment for railways. It is expected to grow at the fastest rate over the next few years because the government is working to improve railways through the Public-Private Partnership (PPP). The railroad is an important part of moving goods. It is used to move large amounts of cargo with the help of special wagons that can move cargo faster than roads.
Waterways are listed third among the other segments that recorded a market share of USD 8 billion in 2021 and are anticipated to grow to USD 30 billion by 2030 at a CAGR of 15%.
If you need to move a lot of cargo over a long distance, waterways are the best way to do it. This method is used a lot to move bulk goods like agricultural products, ores and minerals, crude oil and petroleum, and many other things. Waterways are used for a lot of international trade transport. The main problem with shipping by sea is that it is hard to find out where the shipment is at any given time. Also, it has a high terminal cost because ports and ships are the most expensive things to build and keep up.
The global transportation management systems market is primarily divided into three regions, namely – North America, Europe, and Asia-Pacific, out of which North America is the most dominant region with the major market share.
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North America is the most dominant region with a market value of USD 41 billion in 2021 and is expected to grow to USD 153 billion in 2030 at a CAGR of 16%.
The transportation and logistics business is a very competitive one in the said region, and a highly integrated supply chain network connects buyers and sellers through many types of transportation, such as freight rail, air, and express delivery services, truck transport, and maritime transport. This is why the North American region dominates the global market.
Europe had a significant market share of USD 33 billion in 2021, which is anticipated to rise to USD 108 billion by 2030 at a CAGR of 14%.
The government of European countries has taken a number of steps to improve the transportation system. For example, Universal Traffic Management and Control (UTMC) is a project started by the UK government to make sure that the intelligent transportation system is built and used in the right way. Its goal is to get rid of traffic jams, make public transportation more reliable and fast, and cut down on pollution from cars. This is why the European region owes a significant share of the market.
The Asia–Pacific region is the second most dominant region after North America, which has a market value registered at USD 32 billion in 2021 and growing to USD 156 billion by 2030 at a CAGR of 19%.