There is a tremendous opportunity for increased efficiency.
By Fabrizio Brasca
Over the past 20 years, transportation management has evolved from a cost-driven execution function to a strategic enabler, with the goal of maintaining a balance between cost and service. While the adoption rate of advanced technology for transportation management is reasonably high, there is still a tremendous opportunity for increased efficiency.
In looking toward the future of transportation management, it is important to consider need and capability. In this context, “need” is defined as understanding and responding to global trends, including the evolution of the consumer-centric supply chain, asset and driver shortages, and fuel cost fluctuations. “Capability” is defined as the emergence of technological advancements and trends such as mobile enablement, increases in processing power and the availability of real-time situational data.
In a complex supply chain environment, transportation has the power to create a strategic differentiation and drive profitability. But it’s clear that advanced technology must play a significant role in optimizing this function over the next decade.
Supply Chain Unification
As supply chain practitioners strive to increase their responsiveness while mitigating network costs, there is a growing realization that traditional boundaries may not support this strategy. Instead of existing as a series of functional silos, the supply chain environment must evolve and support a more unified view across functions.
Transportation has already seen some silos removed. As recently as 20 years ago, transportation organizations were internally siloed by flow, geography, division and location. Today, we see the creation of transportation “control towers” which enable a more unified view that considers shared assets and network synergies.
Transportation plays a unique role in the supply chain. Like warehousing and order management, transportation is centered on the execution of transactions, delivery of goods, tracking of movements and reconciliation of payment. However, transportation also has a planning component that’s similar to upstream supply chain planning domains such as replenishment. This combination of planning and execution presents a powerful opportunity for transportation in bridging the barriers created by existing silos.
By considering transportation capabilities concurrently with the initial replenishment plan, shipments can be created in the right quantities to balance inventory deployment with the optimal use of available assets. We can expect to see these types of intelligent planning scenarios being adopted in the next decade.
Increased Constraint Awareness and Iteration
The rise of the consumer-centric supply chain has brought with it many logistics implications. Generally, the supply chain operates at an increased speed, with various distribution nodes that pressure all participants.
Because existing supply chains were originally engineered for the flow of goods, these forces are creating a new level of stress.
To overcome the design flaws, transportation capabilities must become more adaptable. In less-mature supply chains, having loads backed up in a warehouse yard was normal, but today, this bottleneck can impact profitability and speed to market.
Looking ahead, it’s critical that transportation systems have a product-centric awareness of obstacles. Since transportation is essentially the circulatory system of the supply chain, this function must be optimized to ensure an ideal flow across all network nodes.
Managing Driver Shortages
Driver shortages will continue to increase the stress on asset availability within transportation networks. Shippers will look for flexible carriers to meet demand; and carriers will manage driver shortages with flexible service commitments.
Early accessibility to information is critical to managing both challenges. Carriers can plan and react more proactively with advance notice of the shipper’s replenishment needs. Conversely, carriers can alert shippers of anticipated resource shortages to minimize service disruptions.
Maturing transportation practices will allow for adjustments after procurement commitments are defined. This requires transportation systems to tie together procurement practices and transportation execution.
Moving forward, transportation management systems need to be self-aware, capable of analyzing the current execution operation and alerting staff about negative trends.
Fostering True Network Collaboration
In order to increase service levels and reduce costs, it’s necessary to adjust the demand and capacity of the transportation network. Carriers can create a more efficient network by exposing capacity dynamically within their operations. Shippers also can realize cost savings by matching their freight to real-time opportunities created by carrier movements.
As technology creates new levels of visibility, carriers have a great opportunity to reduce empty miles in their networks. Carriers will be able to more easily expose availability and provide real-time visibility to equipment — avoiding empty trailers. Today, available capacity is recognized only when it’s too late. But in the future, real-time visibility can help both shippers and carriers seize cost-reduction opportunities.
Today’s transportation management solutions are characterized by large amounts of data, complex structures and user screens packed with information, supported by mandatory training. This creates time demands in deployment and ongoing use of these solutions.
The next generation transportation management solutions will need to include straightforward user interactivity that’s modeled on consumer devices, and enabled on mobile platforms.
As the availability and consumption of large amounts of data increase, user interfaces will evolve to provide more contextual or situational views. Transportation solutions will guide the user to act in a more directed fashion that is more analytics-driven.
Transportation management has historically been siloed into modal execution activities. As shippers have evolved to create more efficient networks, they have consolidated disparate processes. This reduced the multitude of paper reports and supported better management practices via an electronic, digitized system. Shippers today expect modern systems that provide real-time visibility. Transactions should have both electronic and scanned documentation easily accessible in a single system, with an audit trail that tracks the change in operational transactions over time. We can expect this digitization trend to continue over the next 10 years.
Consumers have mastered the art of easily onboarding new contacts via social media. However, in the transportation business, it is not nearly as simple. New collaborative networks must be formed to make it easier to build relationships and to improve the onboarding process.
One historic challenge has been the legal issues surrounding contractual business relationships. Cost assumptions, commitment to capacity and master agreements form business relationships today, and are administered, manually, by the legal staff.
However, the procurement-to-contract phase can take months to execute, and the processes of providing updates on tenders and in-transit status are also time-consuming endeavors. There is a great opportunity to streamline operations through easier carrier onboarding to a shipper’s collaborative network.
New onboarding processes need to streamline the sign-off procedures associated with procurement and execution relationships. Carriers should have a single portal to gain access to information related to procurement, tactical capacity manipulation, tender requests, track-and-trace activities and freight financials. Carriers should also have a common area where capacity can be exposed to multiple shipper trading partners via a single social network.
By using more social tools, carriers will not have to be trained on multiple transportation management systems. They can easily leverage a visibility and collaboration layer that fosters these relationships in a more productive manner.
Moving Toward The Future
As competition increases and consumers become more demanding, the transportation function will become a more vital part of the supply chain network. The entire supply chain will look to transportation professionals to deliver the last mile in customer service, while supporting the overall profitability of all participants.
The good news is that transportation management solutions continue to improve to meet the needs of tomorrow. By increasing real-time visibility across transportation resources, these solutions will support a new level of speed and agility. For companies that keep pace with technology improvements, and match them with new ways of working, a significant competitive advantage is possible as we move toward 2026.
Fabrizio (Fab) Brasca is vice president of industry strategy at JDA Software, the leading provider of innovative supply chain management, merchandising and pricing excellence solutions worldwide. In this global role, he is responsible for developing innovative strategies across all industry verticals, strengthening executive-level relationships with JDA’s key customers and prospects and advising companies on best practices to become more profitable. Brasca joined JDA as part of the i2 Technologies acquisition in January 2010 after spending more than 10 years at i2 serving in transportation-focused senior management positions. In these roles, he oversaw i2’s global transportation practice, including marketing, presales, roadmap development and services functions. He holds an Honours Bachelor of Mathematics, with a specialization in business and information systems from the University of Waterloo, Waterloo, Ontario.