5TH ANNUAL GLOBAL TRANSPORTATION MANAGEMENT BENCHMARK SURVEY

Discover the strategies, tactics and technology that top performers are leveraging to capitalize on market opportunities and adapt to new

challenges, including the global pandemic.

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 represented a wide range of industry leaders including Descartes customers and followers, trade association members and industry publications readers to provide a balanced view of transportation management.

• explores how companies view the role of TM

Each year our benchmark survey:

• identifies key industry trends driving the market
• examines how transportation value is measured
• uncovers which capabilities, technologies, and competitive strategies/tactics are making the greatest impact
• provides the outlook for future IT investment

The 2021 survey was conducted in late 2020 and early this year. The results, compared with findings from our four earlier surveys, provide an opportunity to assess whether the pandemic has changed how organizations approach transportation management and if so, how top performers are adjusting.

THE 2021 SURVEY: GAUGING THE PANDEMIC’S IMPACT

Respondent Perspectives

Key Trends & Practices

Strategies & Tactics

Survey Takeaways

Who We Surveyed

This year’s 211 survey participants represent the logistics community and shippers from a wide variety of industries. Here’s a quick snapshot of their business type and global footprint, plus the transportation modes they use.

• Growing participation by logistics community
  • 3PLs are the top business type represented (28%).
  • Similar to the past two surveys, manufacturers (19%) lead the shipper group.
  • Over half of respondents (54%) work in the logistics community.

What is your business type?

• Little change in geographic coverage
  • 2021 and 2020 respondents reported nearly the same coverage.
  • Respondents continue to have a strong North American presence for operations, with the U.S. and Canada again cited as the top two locations.

Truckload continues to dominate

• As expected, truckload leads other modes in percentage of survey respondents (83%), as well as in volume (54%).
• While the mode breakdown was similar to 2020, air gained 10%, parcel was up 5%, and fleet grew 4% in 2021.
• LTL and ocean ranked second and third in both categories, with (71%/21%) and (54%/21%) respectively.

What modes of transportation does your organization use?

Respondent Perspectives

We asked respondents to rate their companies on senior management’s strategic view of transportation and overall financial performance. Based on their ratings, respondents were consolidated into groups for further analysis and to compare results from the five benchmark surveys.

Strategic View of Transportation Management

Breakdown of 2021 respondents

• Have perspectives changed?
  • The percentage of respondents’ whose management view TM as a competitive weapon remained nearly constant in 2020 (27%) and 2021 (26%).

Financial Performance

• How well is your company doing financially?
  • Over the benchmark survey’s five-year history, the percentage of participants representing top financial performers declined, while poor performers increased.

TM Strategy, Financial Performance & Growth: A Strong Correlation

As in previous surveys, 2021 results once again indicate a correlation between how well a company performs financially and the strategic importance senior management places on transportation management.

Survey findings

• Industry-leading financial performance more than doubled in 2021 (29% vs. 13% in 2020) for companies that viewed transportation as a Competitive Weapon.
• Not a single company that believed transportation was Not Important achieved industry-leading performance.
• All Top Performers indicated that transportation was a factor in their company’s success.

Expected growth next 2-3 years all respondents

• The 5-year trend of increased growth is projected to continue despite the pandemic, with 26% of respondents in 2021 expecting >15% annual growth. That’s a 6% increase over 2020.

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.

Changes impacting the future market

Top 2 industry or regulatory changes that will have the greatest impact on transportation management over the next 5 years (select 2)

• Driver shortage and capacity remain the dominant market drivers at 42% each, and increased in importance this year vs. last.
• These top two market drivers ranked slightly higher in 2018 and 2019.
• Ecommerce and home delivery moved up to 3rd & 4th overall (26% and 21% respectively) but were 2x more important to Competitive Weapon versus Not Important respondents.

What’s driving TM expansion?

Top 3 business drivers are resulting in your expanded (or initial) use of a transportation management system

• Service (65%), Growth (64%) & Cost (42%) remain the top 3 overall business drivers for the 5th year.
• Business growth was significantly more important for Top Performers (60%) and Competitive Weapon (68%) respondents – 20% higher than Poorer Performers and Not Important respondents.
• Cost continues to decline despite significantly higher transportation prices in today’s market.

Measuring TM value

• Contribution to revenue growth and competitive differentiation continued their 4-year growth among all respondents, with both achieving their highest ranking in benchmark survey history.

More specifically, Top Performers do a better job measuring transportation value, especially on measurements that capture its broader business importance and make the most difference to the C-suite.

• Competitive Weapon respondents are 5x more likely to measure contribution to competitive differentiation than respondents who believe transportation is Not Important.

Addressing the capacity crunch

• The top three overall answers concerned finding more capacity: using brokers on the spot market (35%), expanding existing fleet (34%) and contracting for dedicated capacity (33%).
• Top Performers were 6x more focused on leveraging their existing fleet than Poorer Performers.
• Poorer performers were 2.5x more focused on increasing the use of brokers for the spot market.

Improving transportation value

• Automating transportation processes (49%) was the top response ahead of cutting costs (43%) – mirroring the 2020 survey rankings.
• Poorer Performers and Not Important respondents were fixated on cost reduction -- 2.5x greater than Top Performers and Competitive Weapon respondents.

Capabilities needed for effective TM

• Visibility (53%) was the top overall capability for the fifth consecutive year, but declined slightly.
• Execution/carrier communications (53%), which was the second highest response last year, remained #2, narrowly missing the top spot by a small margin.
• However, Performance Dashboards moved to #2 for Top Performers (55%).

Technology Implications

This year’s survey asked participants questions designed to learn how they view the role of technology as well as their plans and strategies for adopting, investing in and leveraging it to create value for their companies.

Technology adoption strategy

• Over the last five years, the percentage of respondents identifying as early adopters has increased 4% to 19%, and fast followers have seen an 8% increase to 31%.
• However, Competitive Weapon and Top Performers dominated the Early Adopter IT strategy position versus their Not Important and Poorer Performer counterparts by 6x and 7x respectively.

IT spend outlook

• The 5-year overall trend shows a slight shift to increased spending.
• In 2021, Competitive Weapon respondents (46%) were almost 4x higher than Not Important respondents to increase spend >5%.
• More than 50% of Not Important and Poorer Performer respondents claimed they won’t increase their IT spend.

Investment obstacles

• Top Performers (53%) have considerably fewer issues obtaining funding than Poor Performers (15%).
• No obstacle (43%) improved by 18% overall in the last 5 years.
• The top responses for Not Important respondents were "not an executive team priority" (39%) and "payback not clear" (29%).

Delivering greatest future value

• Overall, 2021 respondents expect visibility (41%) to deliver significantly more value than any other capability over the next two years. This aligns with 2020 pre-pandemic responses (41%).
• Rating/optimized planning, execution/carrier communications and performance management/ BI dashboards tied for most important to Competitive Weapon respondents (35%).
• Top Performer respondents were almost 3x more likely to focus on execution/carrier communications than Poorer Performers.

Survey Takeaways

• To date, the pandemic has had little impact on companies’ transportation management strategies, tactics and technology decisions.
• There is a direct relationship between management’s perception of the strategic value of transportation and a company’s performance. Higher strategic value placed on transportation typically results in better financial performance and growth.
• Driver shortage and carrier capacity reversed a recent decline and increased importance as this year’s top overall concerns expected to impact the market moving forward, potentially creating issues, especially for high-growth companies.
• Competitive Weapon and Top Performer respondents are much more likely to have the most aggressive operations and technology strategies, as well as investment plans.
• The top investment areas over the next two years are visibility and execution/carrier communications, indicating a focus on improving working relationships with carriers.