Shift Under Way In Transportation Management Systems Market

Financial struggles among three leading vendors in the transportation management systems (TMS) market helped slow growth to just 1.5% in 2003, according the ARC Advisory Group. Looking ahead, the Dedham, Mass.-based consultants say strategies for success in this market are shifting. "There are several factors that are forcing TMS vendors to revisit their strategies and product development plans," says Adrian Gonzalez, director of ARC's Logistics Executive Council and author of the study "Transportation Management Systems Worldwide Outlook." "These include the growing acceptance of subscription-based pricing and 'on-demand' deployments, the obsolescence of traditional, batch-oriented optimization, and stronger competition from ERP vendors like SAP and Oracle." ARC predicts a cumulative annual growth rate of 7.1% for TMS over the next five years, rising from $873 million in 2003 to $1.228 billion in 2008.