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Global Logistics Increasing by 25%

CO-transportationWhen asked about predictions for 2013 in the global logistics sector Gartner estimated that software as a service (SaaS) and cloud TMS will command 25 percent of the total addressable TMS market. This represents significant growth potential. It also says transportation and logistics is in a state of transition.

Just as customers expect to be able to find the products they want and to order them when they want -- increasingly from a smart phone and tablet and have them delivered where they want -- they also want to be able to track an order and shipment every step of the way. It wasn’t that long ago companies offered customers self-service shipment tracking as a differentiating feature. Now it’s a must to meet most customer service expectations. 

While these expectations have helped grow the delivery market, they have also raised the pressure on fulfillment. Business-to-business customers now have those same expectations for faster delivery and more visibility into their whereabouts. Meanwhile, market conditions continue to become more challenging. With staffing pressure, regulations and customer expectations all increasing, distribution efficiency, speed and visibility have never been more important for T&L companies. If they continue to take a business-as-usual approach, that’s a surefire way they will not remain competitive, or worse, they risk going out of business.

Technology, it seems, might be the answer. It can help 3PLs make better business decisions – quicker and more reliably. But they must be forward thinking and consider their options. New technologies like mobile computing, GPS, imaging and other wireless communications will help them to innovate and stay on the cutting edge.

By some estimates, 90 percent of drivers now have cell phones, and at least 44 percent of them have smart phones. Such technologies give them faster access to information and more quickly than email when they are on the road. Industry observers maintain that many drivers want and need technology to make better field decisions.

By 2016, Gartner is also projecting that more than 40 percent of new logistics application purchases will be delivered through the cloud. Companies that choose to go this route will find this makes their upfront costs lower and preserve capital for strategic IT projects. It can give also them flexibility and agility if they find a partner that can satisfy their demands and business needs now and scale with the business over time. It behooves providers to develop a clear understanding of their requirements and to research the SaaS approach to see if a subscription model meets their needs and can help them differentiate themselves.
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