Transportation Management Practices Changing Dramatically, Says Aberdeen Group Report

Best-in-class Companies Take Notably Different Actions, See Costs Drop While Peers Experience 10% Budget Increases

Transportation management is assuming a strategic role in driving supply chain excellence. In recognition of this, most companies are actively reevaluating their transportation processes and technology. More than three-quarters of the 173 manufacturing, distribution, and retail organizations surveyed by Aberdeen Group have recommended transportation process improvements in just the past six months. Nearly two-thirds have recommended improving their transportation management technology.

"Traditional outbound domestic transportation no longer dominates the transportation agenda," says Beth Enslow, Aberdeen's Senior Vice President of Enterprise Research and report author. "Inbound freight management and online access to transportation costs and status are now a key focus, and technology providers are having to respond with new extensions to their transportation management software."

Best-in-class Cut Costs While Others Struggle

Aberdeen's new "Transportation Management Benchmark Report" finds that best-in-class companies have been able to reduce their freight budgets while the average respondent saw costs rise by 10%. They also have better on-time delivery performance.

Other study findings:

• Best-in-class take different actions. Best-in-class companies are more than twice as likely to do daily scorecarding and share tactical capacity forecasts with carriers; they also control a greater percentage of inbound freight and use more commercial transportation management system (TMS) technology.
• Online information is essential. Fully 54% of respondents now provide other departments with online transportation cost and status information, up from 31% in Aberdeen's 2004 transportation benchmark.
• Legacy technology won't cut it. Nine out of 10 companies are concerned that their current transportation technology will not meet their future needs. Four times more firms plan to adopt commercial transportation  management applications versus. build systems in-house.
• International transportation gains new attention. 39% of participants say they are going to seek to adopt a commercial international transportation management system versus just 12% in Aberdeen's 2004 benchmark.

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