TMS systems to be changed. The digital revolution will not spare them.
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“One of the most important trends in the TSL market today is process automation, so transport service providers will have to integrate as well. This also applies to TMS systems,” admits Maciej Wolny, co-owner of Marcos Bis, a company providing IT systems for the transport sector. “We need to connect with other data providers to facilitate the process of selecting a subcontractor or negotiating prices. To put it simply – so that the forwarder does not have to look for cargo in many places but can select it from the available options on the market, directly in the TMS.
And that’s not yet possible.
Almost all forwarding companies use the same process of arranging transport for their customers – which includes the process of selecting a carrier or a means of transport. Unfortunately, TMS systems allow you to choose only from the pool of your own carriers or your own fleet and they offer almost no chance to select further subcontractors and conduct auctions. And this is today, after all, the basic operation, thanks to which the forwarding companies earn their margins,” notes Tomasz Łyszega, business development leader at Trans.eu.
“The freight forwarder must use other tools or the exchange, but even with the latter inplace, it means that he does it manually because, for example, he has to click through several chat windows. Once he selects a subcontractor, he adds it to the TMS to complete the process there. The history of negotiations and rates offered by other carriers remains in the archive of exchange communications. This results in the loss of data from the course of the auction, e.g. what were the deviations in the offered rates and what was the number of carriers who participated in the auction. The process of selecting an external carrier is not transparent,” adds Łyszega.
Data that gets lost
Indeed, because although the forwarders, when discussing the conditions of cooperation on specific routes, collect a lot of data, they are not able to store them.
Most often they do not collect the whole range of prices they receive from carriers. The only thing that is stored in the TMS is the final selected price for which a particular carrier will carry out the task. Meanwhile, during negotiations a whole range of prices passes through communicators, e-mails and text messages,” says Paweł Ziaja, an independent consultant and forwarder.
The TMS vendors themselves are gradually becoming aware of this limitation.
We have current data on the transports being carried out, we have historical data showing how the freight forwarder’s subcontractors have carried out this transportation so far, and this makes it possible to plan future actions. For example, so that there are as few ‘empty miles’ as possible. But there is no doubt we need to expand the range of information and data contained in the TMS,” admits Maciej Wolny.
Objective: to reduce manual input to a minimum
According to experts, this integration should be as broad as possible.
When I think about it, I mean combining all the tools used by the forwarder so that they work together, within one environment and exchange information,” comments Maciej Wolny, whose company has recently started to cooperate with Trans for Forwarders, a tool that automates all transport management – from obtaining freight to finding a carrier.
“We want the forwarder to have an insight into such valuable information as the average price per cargo on particular routes, which he can then use during negotiations with clients,” adds Wolny. But additional information is not everything. Saving time is also crucial. If we manage to eliminate the need to manually input orders into the system, thanks to the fact that once entered information can be used repeatedly, the forwarder will only gain from it.
This is because according to experts’ observations, transport managers are most likely to return with their offer to subcontractors with whom they have had any contact before, for example, on the instant messenger available at the transport exchange. It is estimated that almost 80% of the freight they carry with the group of 20% of the carriers with whom they have ever been in contact. Therefore, it seems crucial to focus on conducting quick, almost automatic auctions with this group, and, moreover, to keep the offers made by these companies.
Skilful use of data is crucial
“A good TMS is now the lifeblood of the company. However, in order to operate at optimum levels, it will soon not be enough to be efficient in internal processes. You will need to learn to use data skillfully, both inside and outside the company.
The former is already being processed to some extent, e.g. for reports, but modern technologies such as Machine Learning will soon bring completely new value. TMS systems will learn the behaviour of users and on this basis will suggest how to perform a particular transport task. They will serve as an intelligent assistant to the dispatcher and help to share knowledge within the company. These technologies require a lot of computing power, but in the case of TMS systems in the cloud, the client does not need to think about it.
However, it will be crucial to use external data: e.g. real-time price statistics for specific directions, or historical data to forecast trends.
The role of the TMS will be to integrate external providers of such data and to include them in the key points in the planning process. The way the data is presented will be very important – the point is that at a given moment the user should see exactly the information he needs to make a decision and not have to waste time on filtering out the noise.
Just as the integration with the freight exchange is an essential element of any TMS today, a similar but more far-reaching integration with the logistics platforms will take place in the near future. TMS systems, by transferring detailed data to the logistics platform, will be able to automatically propose a more efficient use of the fleet, and the user’s role will be only to accept or reject the suggestion.
It is also increasingly important for the TMS to provide an API that allows for the integration of internal and external dedicated systems, such as accounting systems. An intuitive user interface will also be important. This may seem trivial, but customers are paying attention to it more and more often. Today, hardly anyone wants to work with systems from the Windows 95 era and this trend will strengthen as new generations enter the labour market. L]pConvenient and user-friendly interface gives measurable benefits, counted in the time needed to implement and train employees,” comments Krzysztof Adamczyk, vice president of the board in FireUp Software and FireTMS project leader.
People will still be needed
As the TMS vendors argue, the program should enable integration with virtually any system or tool to respond to the challenges of the digital revolution.
Starting from exchanges or platforms, through telematics and GPS systems, to ERP systems, i.e. those responsible for finance, accounting and document exchange, all this should work in one environment,” says the co-owner of Marcos Bis.
“Many of the processes that are now carried out manually by a human being could be carried out without a person, automatically, thanks to the use of algorithms. Obviously, I am thinking of processes that are running correctly. Man will still be needed to solve problems and make decisions wherever there are deviations from the standard.
Marcin Łańcucki, executive manager at ANSTA, a company that develops software, among others, for the transport sector, agrees with him. “The digital revolution is happening now. Constantly improved developer tools enable you to launch new and better systems faster than ever before. The ability to exchange data between these systems provides unique development opportunities for virtually every industry,” he notes.
What this will lead to, no one can say for sure today. However, there are reasons to believe that TMS systems will significantly increase their role in the TSL industry, developing in at least two key directions. The first one is the automation. The second is supporting users in making decisions. No one’s thinking about replacing the forwarder. The software is supposed to recommend him the potentially best solutions, suggesting the key information at a given moment,” he explains.
The end of the phone era. Everything happens automatically
What does it mean in practice?
TMS systems are increasingly better at collecting and processing information about the weight of a cargo, its location or the space available on the vehicle. This is information that will soon be introduced regularly and gradually, which is not a standard yet,” says Marcin Łańcucki. “Thanks to this, the systems will suggest to the forwarder e.g. the fastest or the most profitable route. They will be able to indicate trends in the amount of cargo available in specific areas, which will allow the freight forwarder to decide whether it is still worth taking an interest in them or whether it is better to change the direction of freight beforehand.”
Communication throughout the supply chain will also change.
We have launched a mobile application, which each driver must activate on his smartphone or tablet. They are obliged to do so in their contracts. Communication is simple – the driver sends short messages informing about his activities. He waits for loading, is on the road, had a delay or an accident… – it all happens at the TMS level, the forwarder knows what is happening to the cargo and does not have to make time-consuming attempts to contact the driver,” explains the expert.
There is one more advantage to it. Namely, the communication history is kept. Thanks to this, not only are all the arrangements in one system, but even if someone deletes a message, there will be a trace of it.
Different requirements for data sharing
“In my opinion, in the short term, in the coming years, TMS systems will be equipped with mechanisms both for integration with other TMS-type systems or public freight and route platforms, as well as they will provide an isolated/local ability to organise transport processes.
This duality of requirements is due to the fact that some transport services are worth planning and implementing after a good preparation, which involves sharing data about transport planning and execution capacity coming from publicly disclosed information, the standard rates of which are also publicly known. On the other hand, there is still a large area of transport process management, which remains a secret for the customer, the forwarder and the carrier. The TMS must be able to work in these two separate worlds.
In the first case, the requirements for data sharing concern more business data, even commercial data, describing the transport task and the resources that can be used for transport.
In the second case, the requirements for data sharing concern more technical and operational aspects, e.g. secure contact between the planner and the carrier in order to check the opportunity to delegate the execution of the route to a selected driver working for a given carrier. – I have no idea what will happen in the long run,” comments Andrzej Sobala, Quantum software.
Dependent on Excel
Payments may also be revolutionised.
Integration of the TMS with banking systems or postal operators will be of key importance. In our TMS+, for many years now, companies not only issue invoices, but also track the time of delivery of the invoice to the customer. In this way, premature debt collection activities can be avoided. The option of sending reminders to customers about overdue payments has improved the effectiveness of many companies. It is the system that checks how many such invoices there are and for what amount, and also reports the average payment terms of invoices by customers. It clearly speeds up work, saves time, and nobody in finance and debt collection has to do it manually,” notes Marcin Łańcucki.
“Excel is a great tool, I’ve been dependent on it for a long time. However, there are actions that should take place automatically in companies, and Excel will not bring this about,” he says.
According to the TMS vendors, this is the main direction of development.
I remember more than 20 years ago when freight forwarders gathered every morning to discuss the current situation. They lost an hour, sometimes more,” recalls Maciej Wolny. “Today such things are not done anymore, and still there are many activities in which the forwarder can save time. It seems necessary to ‘delegate’ them to supporting systems.”