JDA Software Group, Inc. (now known as Blue Yonder) launched the first TMS in the early 1990s. JDA pioneered the concept of utilizing software to optimize and manage transportation operations for businesses. In 2005, Oracle introduced its Oracle Transportation Management (OTM) platform. These platforms, and others that followed, revolutionized the logistics industry. These early systems were complex and often installed on an “on-premise” basis (JDA later introduced a cloud-based option).
While these powerful platforms delivered previously unattainable levels of supply chain control, they also have some disadvantages. Due to their cost, they were (and arguably still are) only practical for shippers with annual freight spends in excess of $100MM. They are time-consuming to implement and resource-intensive to maintain, and integration with existing ERPs, WMSs and other systems can be challenging. Lastly, there can be a steep learning curve for both administrators and end-users.
During the mid-2010’s, TMS development largely followed two tracks:
(1) 3PLs began to develop proprietary, in-house TMS platforms in a bid to compete with the legacy systems, differentiate their offerings and position themselves as tech-forward organizations. However, many of these systems were intended for internal use as operational platforms, not customer-facing (or customer friendly) TMS solutions. These platforms often competed on the basis of features and functionality, leading to a proliferation of “bells and whistles” as providers sought to deliver a complete “all in one” solution to the shipper marketplace.
(2) Logistics technology companies began to offer “lite,” often free, TMS software that was intended as an entry-level option or as a means to showcase the capabilities of a full-featured paid TMS solution. These software-as-a-service (SaaS) offerings made upgrading from pen and paper or Excel spreadsheets quick and easy, but lacked robust features and scalability.
It may be hard to believe, but before the advent of TMS technology, most shippers and logistics companies used spreadsheets, pen and paper, or other ad-hoc solutions to keep track of their transportation operations. Perhaps it’s even harder to believe that some shippers continue to operate without a TMS today. But shippers need not rely on arcane logistics management methods—there are ideal solutions out there for every shipper.