Don't think transportation management systems (TMS) are catching on? Well, consider this: last year, more than $804 million was spent on transportation management systems in a year where most companies focused on cost reduction efforts. According to an upcoming report from ARC Advisory Group, about 20% of that $804 million came from recurring fees such as hosting, transaction and subscription fees, and growth is expected to continue. In five years, the TMS market is expected to grow at an average of 16.4% to more than $1.7 billion.

"Most companies have traditionally taken a fragmented approach to transportation management, and so the technology has also been developed and deployed from a silo perspective," says Adrian Gonzalez, senior analyst at ARC and author of the study. Gonzalez says leading companies are beginning to take a holistic view of transportation, driving software providers to expand the scope of their solutions by incorporating capabilities like order collaboration and inventory management.

"In the near future, TMS will become too limited a term to describe these solutions," Gonzalez says.

dhannon@cahners.com