The ARC Advisory Group reports that delivery companies spent more than $804 million on transportation management technology in 2001, and that 20 percent of that revenue comes from recurring subscription, transaction, and hosting fees.

ARC is an international consulting firm headquartered in Dedham, Mass.
The report predicts the transportation management technology market should grow 16.4 percent annually until 2006.
ARC defines transportation management technology as “software solutions that facilitate the procurement of transportation services, the short-term planning and optimization of transportation activities, and the execution of transportation plans,” including international trade solutions, parcel shipping applications, and transportation-focused supply chain process management solutions.
The report on ARC’s website contained this observation: “The boundary between transportation management and inventory management is beginning to blur, driving software vendors to expand the scope of their solutions.”
According to the report, “Most companies have taken a fragmented approach to transportation management so the technology has also been developed and deployed from a silo perspective. Leading companies, however, are beginning to take a holistic view of transportation, thereby driving software vendors to expand the scope of their solutions.”
What does that mean?
“Software vendors are incorporating complementary capabilities into their solutions, such as order collaboration and inventory management. In the near future, `transportation management systems’ will become too limited a term to describe these solutions,” the report explained.
The report also noted:

• Inbound transportation management is becoming a top priority, and solutions that enable better compliance with routing guides and optimize inbound moves will be in demand.

• Executing transportation activities via a hosted network will continue to gain momentum, as well as the demand for managed services.

• Fleet management solutions, namely routing and scheduling applications, will continue to lag the rest of the market, but wireless and collaborative dispatch solutions will stimulate growth.

• Parcel shipping solutions will play a more significant role and become better integrated with other transportation solutions as shipments become smaller and more frequent.