The Transportation Management System (TMS) market has grown at a steady and impressive rate over the last decade or so. There is one market segment that has historically been underserved: the SMB market. Until recently, a typical SMB simply didn’t have enough freight spend to justify implementing a TMS; they would typically outsource to a 3PL to manage their freight. However, as the barriers to entry in the TMS market have shrunk, mostly due to lower cost, less sophisticated on-premise applications and the rise of cloud / SaaS applications, more and more SMB’s are ready to take the plunge and purchase a TMS. Even with this market now looking for affordable TMS solutions, the market is still incredibly underserved.
Over the last couple of weeks Steve Banker and I have briefed with some TMS and MTS suppliers and seen demos of their products. We have also seen an emerging solution set that sits somewhere in the middle of these two solutions. We would not define them as TMS as they do not include optimization capabilities. At the same time, they are not MTS, as they do not actually offer many services. However, what these solutions do offer is a great fit for the SMB market. Two such demos we saw really stuck out in my mind: Freightview and 10-4 Systems.
Freightview was developed in 2013 as an offshoot of Freightquote, an online freight shipping provider. Both were acquired by C.H. Robinson, and operate as a division of the company now. This solution is for shippers doing 5-25 shipments per day, particularly less-than-truckload (LTL) shipments. Shippers sign up for a 30 day free trial with the option to subscribe for $99 per month per ship location if they are pleased with the solution. Steve Banker and I spoke with Jason Roberts the Managing Director and got a demo. Jason said the system was easy to set up. In fact the solution could be set up within a few days, and in many cases shippers can be managing freight by end of day.
In the initial customer set up, the customer can select the carriers in which they already have directly established rates by a pull down menu. Customers are not involved in carrier integration as Freightview has created a process to connect directly with the carrier network on behalf of the customer. Jason said they currently support connectivity to around 99% of the North American LTL carriers. If a carrier is not connected, Freightview can usually integrate with carriers quickly.
If a shipper has a load, they don’t have to go out and hit 6 or 7 carrier sites and compare rates and look for availability. The shipper can quickly compare rates and click on the carrier they want to use. This creates a tender, a BOL number for tracking, and shipping labels to be printed. For many small companies, this system provides their first access to transportation analytics. Freightview has targeted the LTL market first.
The other company Steve and I spoke with was 10-4 Systems. 10-4 Systems, headquartered in Boulder, CO, is a solutions-based technology firm that provides a variety of solutions. Jeremy Estep, Executive Vice President, gave Steve and I a demo of their various solutions. The two that intrigued me the most were The Marketplace and Freight Portal. The Marketplace is an online community and ecosystem created to balance capacity and load synergies across shippers, carriers, brokers, and 3PL’s in North America. This solution allows trucks and loads to be matched in The Marketplace, rules can be applied to the route, and deals can be made. In this solution, 10-4 charges freight providers $9.95 if their load gets matched. For private fleets, the company invoices for them and charges a small service fee.
The other interesting solution was Freight Portal. This solution is designed to give complete visibility to a company’s carrier network. Customers can view active loads, products, and carriers on a live map. This solution tracks loads via cellphones and Satellite Communication Systems. In fact, drivers do not even need a smart phone. The technology is integrated to all cell phone through cell phone triangulation. The driver opts-in, via cell phone number or through a mobile app. The truck location is available in real-time, allowing for the company to create carrier scorecards for on-time deliveries based route data, rather than self-reported data. This solution is particularly useful for big shippers. For a monthly service fee, they can track and show where all trucks and shipments are located, what’s on the truck down to the SKU level, and run analytics on on-time performance.
In conclusion, the SMB market has been incredibly underserved by both TMS and MTS suppliers. Without the need for full TMS sophistication, most TMS suppliers prefer to stay away from these small companies. On the MTS side, most SMB’s are not in the market for all the services offered, and the costs generally do not make these solutions practical. However, these new solutions which sit somewhere in between traditional TMS and MTS are poised to seize this rapidly growing market. These solutions are built from the ground up to be easy to use, low cost or even free, and are specifically designed for SMBs.
Aristides (Ari) P. Smith says
Very nice review on the current state of leveraging technology in the TMS / MTS market space. I agree that there many SMB shippers that, in theory are “underserved”, OR could it be that they are content with utilizing their Excel Spreadsheets or Access software to manage the modest freight that they have?
What we can do with technology these days is amazing, however a major initiative should be in educating our customers as to the value of utilizing the technology. Who knows, maybe they might even pay for it!