Compiled ByJill Jusko The market for transportation management systems (TMS) will grow to more than $1.7 billion by 2006, predicts ARC Advisory Group, a Dedham, Mass.-based consulting firm. That represents a cumulative annual growth rate of 16.4%, based on the $804 million ARC calculates firms spent in 2001. About 20% of the revenues were derived from recurring fees such as subscription, transaction and hosting fees. ARC details its study of the TMS market in its new study, "Transportation Management Systems Global Outlook: Market Analysis & Forecast Through 2006." In analyzing the market, the advisory group identified TMS as "software solutions that facilitate the procurement of transportation services, the short-term planning and optimization of transportation activities, and the execution of transportation plans." "Most companies have traditionally taken a fragmented approach to transportation management, and so the technology has also been developed and deployed from a silo perspective," says Adrian Gonzalez, ARC senior analyst and the study's author. Other key findings include:
Executing transportation activities via a hosted network will continue to gain momentum; Fleet management solutions, particularly routing and scheduling applications, will continue to lag the rest of the market; and International trade and supply-chain process management will drive growth as companies work to strengthen their trade compliance and trade security processes and improve their ability to manage inventory in motion. The study also includes market shares by solution, type, geographic region and other demographics.