Three years ago, we started the Transportation Management Benchmark Survey because we were seeing some companies be incredibly successful in transportation management and positively impact their company’s performance while others just struggled to get value. Now that we have years of data from hundreds of companies, we can better see what macroeconomic and industry trends are shaping transportation strategies and tactics. Most importantly, we can identify how top performers think and act differently from the rest of the pack. Here are some of the key questions addressed in the upcoming web seminar 2019 Transportation Management Strategies of Top Performers on Tuesday, May 7 at 2pm ET.
Who are “Top Performers”?
Top performers not only do better financially and grow faster, their management believes that transportation management is a competitive weapon. Never have there been examples where transportation and logistics are being used to provide differentiation and value, and where “good enough” transportation is no longer “good enough” if you are looking to be the best performing company in your industry. You can see this in Figure 1 where we compared the answers to two questions: “How is your company performing financially?” and “How strategically is transportation viewed by management?” Almost twice as many top financial performers said that management viewed transportation as a competitive weapon.
Figure 1: Relationship between transportation importance to management and financial performance
What is shaping transportation management strategies, tactics and technology choices?
With HOS/ELD out of the way in the U.S., transportation capacity (i.e., carrier capacity and driver shortage) vaulted to the top and dominated the choices for the last 2 years. This should be no surprise to anyone and we can see the results in other questions from the benchmark, especially for Financial Leaders as they are also the ones with the greatest growth for the next 2-3 years. Fuel costs and ecommerce/home delivery were the next 2 most common choices. Continued double digit ecommerce growth is also contributing to capacity issues (see Figure 2).
What wasn’t important to transportation professionals? The hype stuff—crowd/marketplace source logistics and driverless vehicles. While these are receiving a lot of attention in the press and funding, very few see them making an impact soon.
Figure 2: Top 5 industry or regulatory changes that will have the greatest impact over the next 5 years
How do top performers demonstrate the greater value of transportation management?
They measure its value not only better within their own organization, but in the areas that are most important to the C-suite: contribution to revenue growth and competitive differentiation (see Figure 3). Innovative transportation strategies can make a difference to sales and the customer. Hitting cost and service targets are basic expectations where little credit is earned. Not measuring the impact of transportation outside of the transportation and logistics organization does not help promote the strategic importance of transportation in management’s mind. For three consecutive years, the study has shown that management’s perception of the strategic importance is directly related to role and funding that transportation has in the organization. It’s a missed opportunity—limited measurement, limited perceived value.
Figure 3: How is the value of the transportation measured?
Where is transportation IT spend headed?
Up. Almost no one indicated that they were cutting spending. That’s the good news as a combination of increased customer expectations and complexity, along with tight capacity, makes IT more important than ever in addressing those opportunities and challenges. The bad news is that the majority of the increased spend will come from the top performers. This is a 3-year trend and goes along with management’s perceived importance. The benchmark shows that the top performers are striving to deliver innovative transportation strategies and many of them are directly related to investment in next-generation transportation IT solutions. The concern for the “rest of the pack” is that they will begin to face an IT-driven transportation capability gap and competitive disadvantage.
Figure 4: How will your transportation management IT spend change over the next 2 years?
The role of transportation, market conditions and technology are changing at an ever-greater rate than before. To learn more about how top performers are adapting their strategies, tactics and technology to not only survive, but thrive join the web seminar 2019 Transportation Management Strategies of Top Performers on Tuesday, May 7 at 2pm ET.
Executive Vice President of Industry and Services
Descartes Systems Group