Transportation management gives companies a competitive edge

There is a clear link between the value companies place on transportation management strategies, tactics and technologies, and the financial success and growth of those companies. That is the main conclusion from new research by Descartes Systems Group. Companies that underestimate the importance of transportation management achieve significantly poorer performance, both financially and in terms of growth, according to the software vendor.

Descartes’ sixth annual Global Transportation Management Benchmark Survey shows that 74% of companies who view transportation management as a competitive weapon achieve above-average financial performance. In contrast, at 40% of the companies with poorer financial performance, the senior management does not believe this type of management is of strategic importance. Respondents who see transportation as a competitive weapon are also almost twice as likely to have annual growth rates above 15% than those who regard transportation management as unimportant.

“The supply chain disruptions of the last two-plus years have highlighted the importance of transportation management strategies, tactics and technologies to the overall success of companies,” comments Chris Jones, EVP Industry and Services at Descartes. “The study showed a strong correlation between financial performance and leadership’s perspective on the value of transportation management to the organization. This perspective significantly changes how top performers think, act and invest in it.”

Driver shortage

Additionally, the survey reveals that the driver shortage and carrier capacity have become increasingly important issues over the past three years and are the biggest concerns for industry respondents. The top performers and companies that view transportation management as a competitive weapon are much more likely to have more progressive operational and technological strategies and investment plans. Moreover, the study shows that these companies are significantly better at measuring the added value of a TMS and sharing transportation management information in the supply chain. As a result, they also find it much easier to secure additional investments in this type of management.

Improving transportation value

Investments in technology are still the key choice to respond to market trends. Those investments are closely related to automating transportation processes in order to improve the value of transportation. Visibility, carrier sourcing and order management are seen as the most important capabilities for effective transportation management and reasons to invest over the next two years.