CHAPTERS

8TH ANNUAL

GLOBAL TRANSPORTATION MANAGEMENT

BENCHMARK SURVEY

Discover the transportation management strategies, tactics and technology that top performers are leveraging to capitalize on market opportunities and adapt to challenges of a constantly evolving supply chain landscape.

About the Survey

Since 2017, Descartes has conducted an annual benchmark survey of global transportation professionals to identify the strategies, tactics and technology-thinking of top-performing organizations.

Survey participants represent a wide range of industry leaders including Descartes customers and followers, trade association members and industry publication readers to provide a balanced view of transportation management (TM). Only the last five years of results are used to keep the study relevant.

Each year our benchmark survey:

y Explores how companies view the role of TM
y Identifies key industry trends driving the market
y Examines how transportation value is measured
y Uncovers which capabilities, technologies, and competitive strategies/tactics are making the greatest impact
y Provides the outlook for future IT investment

The 2024 Survey: Transportation Management Through Disruption

2023 saw inflation decelerate and many economies stabilize. While prices remain high for many goods, consumer spending continues to grow. Disruptions in the form of the ongoing Russia invasion of Ukraine, Red Sea attacks, Israel-Hamas war, Panama Canal drought have continued to impact global supply chains. Over the road, ocean, and air rates all saw declines in 2023 and into early 2024. Transportation leaders are focused on improving visibility and order management and are investing more in technology. Fuel costs and environmental regulations are foremost concerns in the market. Top performers continue to take more aggressive actions become more competitive and grow, while poorer performers are more focused on cost cutting. This report concentrates on the aggregate results, other reports will be published that highlight differences in responses by Geography (North America vs. Western Europe) and company type (Shipper vs. Logistics Service Provider).

Who We Surveyed

This year’s 630 survey participants represent the logistics community and shippers from a wide variety of industries. Again, there was a significant emphasis and success on garnering more respondents beyond North America. Here’s a snapshot of respondents’ business type and global footprint.

Growing participation by logistics community

y Manufacturers / Distributers are the top business type represented (40%)
y Over two-thirds of respondents (68%) are Shippers (Manufacturers, Distributors, and Retailers)
y Logistics Service Providers (LSPs) had at 32% of respondents are a good mix of Brokers, Forwarders, and 3PLs
y A future report will break down responses by LSP vs. Shipper, this report will focus on the aggregate responses

Geographic coverage

y 2024 respondents had significantly greater European coverage; LATAM & Asia dropped
y 2024 respondents with $100M+ transportation spend increased from 2023 (17% and 12.4% respectively)

Respondent Perspectives

To get a better sense of how companies think and act, we asked respondents to rate their companies on senior management’s strategic view of transportation management. We also wanted to see how those perspectives related to overall financial performance. Based on their ratings, respondents were consolidated into groups for further analysis. The first grouping concerns the strategic importance of transportation and whether management believes it is a Competitive Weapon or Not Important. The second grouping looks at the difference in financial performance where industry leaders are defined as Top Performers, and average financial performers and below are defined as Poorer Performers. The results of the study were then compared by these groups to see if management importance and financial performance had an impact on strategic, tactical and technology decisions.

How strategically is transportation viewed by management? (select one)

y Management that views transportation management as a Competitive Weapon has grown the previous 4 years, this year saw a dip of 5%. That is likely due to the higher responses of shippers in this dataset

How well financially is your company doing today? (select one)

y Better than average jumped 13% to 55% of respondents, other categories dropped slightly
y In 2024 Top Performers down slightly (13%), while Poorer Performers decreased their 4-year low (32%)

TM Strategy, Financial Performance & Growth: A Strong Correlation

As in previous surveys, the 2024 results once again indicate a correlation between how well a company performs financially and the strategic importance senior management places on transportation.

Survey findings

y Industry leading financial performance increased in 2024 (2024: 24% vs 2023: 18%) for Competitive Weapon respondents and was 3.4X higher than Not Important respondents
y 46% of Not Important respondents had poorer financial performance

How well financially is your company doing today? (select one)

y Poorer Performers (49%) were more than 2X likely to view transportation as not important than Top Performers (18%)

How strategically is transportation viewed by management? (select one)

TM Strategy, Financial Performance & Growth: A Strong Correlation (cont’d)

Company growth: Looking forward

y Respondents expecting over 15% growth dropped to 12% in 2024 from 28% in 2023, but companies expecting growth was 94% in 2024 compared to 91% in 2023. Overall, 74% expected at least 5% growth
y Top Performer respondents are more than 10X more likely to grow >15% annually than Poorer Performer respondents
y Competitive Weapon respondents are 13% more likely to expect to grow at least 5% than Not Important respondent (79% versus 66%, respectively)

Based on current economic climate, what do you expect your annual growth to be over the next 2-3 years? (select one)

Key Trends & Practices

We asked respondents several questions related to transportation management regarding the future significance of current market and business drivers, value measurement, where information is used and concerns about competitive strategies.

Industry or regulatory changes with the greatest market impact over the next 5 years

y Only Fuel Costs (52%) remained in the top three impact categories from past years, up from 39.6% in 2023
y Environmental Regulations (34%) and Carrier Charges (34%) enter top three in 2024
y Fuel costs for Not Important respondents (57%) ranked 10% higher than Competitive Weapon respondents (47%)

What industry or regulatory changes will have the greatest impact on transportation management over the next 5 years? (select three)

What’s driving TM expansion?

y Cost Reduction was the top choice (40%), with Customer Service (39%) and Growth (38%) close behind (Customer Service and Growth were the top choices for the past 7 years)
y Business Growth was significantly more important to Top Performers (43%) vs. Poorer Performers (32%), similarly Expanded Product Offerings had a large gap between Top Performers (38%) vs. Poorer Performers (18%)

What business drivers are resulting in your expanded (or initial) use of a transportation management system? (select all that apply)

Measuring transportation value

y Cost per shipment remained the top choice in 2024 (61%) as it was in 2023 (68%)
y Competitive Weapon respondents picked Contribution to Revenue Growth 1.5 times more than Not Important respondents (58% vs. 38%)
y Contribution to Competitive Differentiation was also selected over 1.5 times more by Competitive Weapon respondents compared to Not Important respondents (37% vs. 23%)

How is the value of the transportation measured? (select all that apply)

Sharing information beyond transportation operations

y Supply Chain Operations (48%) took the top overall response spot, followed by, Warehousing and Distribution Ops (45%). Carriers (37%) and Customers (35%) in top four
y Competitive Weapon respondents chose Suppliers (39%) over Customers (35%) and overall do a significantly better job of sharing information across the organization and external supply chain. Top Performers share information with Supply Chain Operations (62%), Customers (38%), and Sales (41%) at much higher rates than Poorer Performers (46%, 28%, and 25%)

Where is transportation information used to create value? (select all that apply)

Pinpointing competitive concerns

y Faster Deliveries jumped to the top spot at 47% up from 29% in 2023. Low cost/free shipping had about the same overall response rate (43%) as in past years
y Low cost/free shipping was picked at a much higher rate by Not Important (49%) and Poorer Performer (47%) respondents as compared to Competitive Weapon (40%) and Top Performer (33%) respondents.

What transportation strategies or tactics are the competition using that are the greatest concern to you? (select two)

Strategies & Tactics

Survey respondents were asked how they are planning to address the key trends and improve transportation value—both strategically and tactically. In addition, they ranked the capabilities required to effectively manage transportation, and then took a deeper dive into the highest ranked capabilities.

Preparing for industry and regulatory change

y Overall, invest in technology was the top overall response (40%) for the 7th year. Competitive Weapon were more focused on investing in technology (44%) compared to Poorer Performers (32%)
y Poorer Performer (40%) respondents were more focused on cutting costs than Top Performers (30%). Top Performers (40%) chose looking for new transportation providers much higher than Poorer Performers (29%)

How are you preparing for the industry and regulatory changes? (select two)

Addressing the capacity crunch

y Using Alternate modes was the top choice (22%), Dedicated Fleets (20%) and Renegotiating Contracts (20%) were close behind
y Using spot market dropped from 34% in 2023 to 8% in 2024
y Capacity not an issue was the lowest response again, and reduced to 7% in 2024 from 13% in 2023, or another way to look at this is that 93% of respondents still have capacity issues
y Competitive Weapon chose digital freight matching (17%) much higher than Not Important (9%)

How are you addressing capacity challenges? (select up to two)

How are Truckload Contracts Managed?

y Annual bids are the top choice (37%), fleets (32%), real-time pricing (29%), and tactical bids at 28% round out the top four. Index rates were bottom choice at 20%, will keep track if this changes moving forward
y Top Performers choose Annual bids (48%), Outsourcing to 3PL (36%), and Load boards (30%) more frequently than Poorer Performers (36%, 25%, and 15% respectively

For Truck Load freight, how do you contract rates with carriers? (select all that apply)

Organizational approach to transportation strategies

y Overall, ‘Follow and adopt industry trends’ was the top response in 2024 (47%) replacing ‘Create or adopt leading edge strategies’, the top choice (42%) in 2023
y Competitive Weapon (54%) and Top Performer (59%) were both 2X+ and 3X more likely to select Create or adopt leading-edge strategies than Not Important (26%) and Poorer Performer (19%) respondents

What is your organization’s approach to transportation strategies? (select one)

Key Survey Findings

Direct relationship between management’s perception of the strategic value of transportation and performance – higher strategic value results in better financial performance and growth
Fuel costs was selected as the top industry or regulatory change that will have the greatest impact on transportation management over the next 5 years
Sustainability reporting and planning was not selected as a top 5 TMS capability to deliver the greatest value over the next two years
Competitive Weapon and Top Performer respondents are much more likely to focus on customer service and expanding delivery options vs. cost cutting
Competitive Weapon and Top Performers do a much better job at measuring TM value and sharing TM information across the supply chain
Annual bids are still the top method of contracting Truckload freight, supported by other methods
There is good alignment with TMS value and investment for the top 3 most cited capabilities $ (Visibility, Order management and Fleet routing)
Visibility was the top capability selected for managing, improving, and delivering value to transportation and another year of increased IT spend will focus on it

Descartes Transportation Solutions

Descartes’ transportation solutions suite provides standard and advanced capabilities that improve transportation efficiency, coordination and visibility.

Shipper Transportation Management System

y Optimize and execute transportation across modes
y Easily maintain multimodal contracts
y Automatically rate shipments, optimize loads, select carriers
y Streamline carrier interaction (tendering, booking, tracking, delivery)
y Audit freight bills to identify discrepancies

Retail Distribution

y Control inventory flow from distribution centers to stores
y Leverage a network to reduce costs and improve delivery frequency
y Provide delivery visibility to stores to reduce labor costs
y Use a single view to manage all delivery operations

Supply Chain Visibility Platform

y Enhance performance with real-time shipment statuses and predictive ETAs
y Know load location and status (temperature, customs, etc.)
y Find available capacity using real-time data with AI
y Communicate load status with customers and suppliers

Reporting & Analytics

y Transform data into actionable insights
y Visualize data with intuitive charts and graphics
y Better understand operations, customers, and suppliers
y Create accurate scorecards to support contract negotiations

Fleet Management

y Route planning, optimization & dispatch to maximize fleet
y Reduce delivery costs
y Improve customer experience
y Improve driver and vehicle performance and safety
y Track loads in real-time and find available capacity using with Descartes MacroPoint™

Freight Broker TMS

y Robust transportation management for freight brokers

Dynamic Dock Appointment Scheduling

y Automate and improve visibility for dock door scheduling
y Reduce load/unload times, DC congestion, labor costs, and inventory
y Gain control over supplier-managed freight

Carrier Connectivity

y Single connection to Descartes provides connections to tens of thousands of carriers and providers
y Supports all connection protocols and message types
y Global, multi-mode coverage
y Reduce manual labor, eliminate errors, streamline booking through billing process

About Descartes Systems Group

Descartes is the global leader in providing on-demand, software-as-a-service solutions focused on improving the productivity, security, and sustainability of logistics-intensive businesses.

Customers use our modular, software-as-a-service solutions to:

y route, track and help improve the safety, performance and compliance of delivery resources
y plan, allocate and execute shipments
y rate, audit and pay transportation invoices
y access global trade data
y file customs and security documents for imports and exports

Our headquarters are in Waterloo, Ontario, Canada and we have offices and partners around the world.