Transportation management system (TMS) software has been a mainstay of logistics operations for years, helping users plan and arrange for the physical transport of goods across the supply chain while striking the optimal balance between cost and speed.
For decades, the software has paid for itself by generating savings and efficiencies in straightforward freight hauls. But the events of recent months have injected unprecedented levels of uncertainty into the business of cargo transport—whether by truck, rail, ocean, or air. Instead of simply arranging for cargo to be hauled from point A to point B, companies now have to worry about major variables that can change from day to day, including radical swings in diesel fuel prices caused by geopolitical conflict, attacks on containerships and sudden closures of ocean lanes, soaring rates of cargo theft, and unexpected court rulings that place new legal burdens on businesses.
“For most of the last two decades, a TMS existed to execute a shipment, price it, and track it through delivery. That was the job. Today, the same platform is being asked to absorb a much wider set of forces at once: legal and security risk, cost volatility, and global disruption, often in the same week,” says Raddy Velkov, senior vice president of carrier sales and strategy at BlueGrace Logistics, a Florida-based third-party logistics service provider (3PL). “None of those four pressures existed at this intensity five years ago. Now a platform has to account for all of them at once, and that’s a meaningfully bigger job than the one TMS platforms were originally built to do.”
Take carrier vetting and compliance, for example. A spate of recent legal and regulatory developments have changed the game for freight brokers and 3PLs, forcing them to rethink how they evaluate, document, and defend their carrier-selection programs.
One of those developments was the U.S. Supreme Court’s decision in Montgomery v. Caribe Transport II, which it handed down in May. In a surprise ruling, the justices found that freight brokers may be held financially liable for highway accidents involving trucks they hired to haul freight, even when those motor carriers were federally licensed and had met safety requirements set by the U.S. Federal Motor Carrier Safety Administration (FMCSA).
That decision came down just months after another regulation affecting brokers and forwarders, the FMCSA’s Broker and Freight Forwarder Financial Responsibility rule, took effect. Among other stipulations, the rule requires brokers and freight forwarders to make their operations more transparent by sharing their records with shippers and truckers, and also to maintain $75,000 in bonds to ensure they can pay for their services.
HOW TO JUGGLE THE CHALLENGES
While various online platforms exist for addressing individual threats, TMS software sits at the nexus of where they all intersect. That helps explain why TMS users are suddenly asking developers for features to help them cope with this wide range of new concerns.
To meet those demands, some companies license a commercial TMS product, while others design their own system in house. With either approach, it’s critical that the software be able to keep up with the dizzying pace of change in the market, Velkov says. He says BlueGrace struck a balance between the two approaches by building its own TMS—called “BlueShip”—but turning to outside sources for the data it uses for its security analysis. “The data that tells you whether a carrier is who it claims to be, in real time, across the country, is an industry-scale problem” that requires far more information than a single company can collect, Velkov explains. “So we feed the best available version of that into our own systems rather than reinventing it.”
Another TMS developer, Solana Beach, California-based Alvys, took a similar approach when it expanded its platform’s capabilities to include automated carrier vetting, continuous monitoring, and more.
“The shift isn’t about the TMS adding more features; it’s about the TMS changing shape. Alvys’ answer is to make the TMS the orchestration layer rather than the do-everything application,” says Alvys CEO Nick Darman. He characterizes this approach as “TMS-as-hub plus best-of-breed intelligence, connected by automation rather than by people switching between a bunch of tabs.”
The firm recently launched a product called “Alvys Foundry,” an agentic artificial intelligence (AI) platform that lets freight teams deploy pre-built or custom AI agents inside the TMS they already run. The platform includes more than 20 pre-built agent templates covering common workflows but also allows customers to use agents they build themselves (such as agents that collect status updates from truck drivers, handle invoice and settlement prep, and track exceptions) or custom agents built by Alvys.
In another move aimed at helping the market respond to the growing list of challenges, Alvys recently announced that its TMS will now be accessible to fleets of all sizes, which it says democratizes freight technology for owner-operators and smaller freight carriers alongside the larger trucking companies it has traditionally supported.
REMEMBER THE LITTLE GUYS
Another TMS developer that’s seeking to democratize the tech landscape is Brandon, Florida-based Ascend TMS. Tim Higham, founder, president, and CEO of the company, which focuses specifically on the small and medium-sized business (SMB) sector, says access to a TMS is becoming increasingly crucial for smaller carriers and brokers today as they try to cope with the market’s spiraling demands.
“If you want to be in the freight world, you have to have the capability to transact digitally, so that means vetting electronically and making payments electronically,” Higham notes. “The top 200 brokers and the top 100 carriers have big budgets and IT teams, but everybody else doesn’t. So we offer a free TMS option for SMBs, those people with just three, four, or five trucks or brokers.”
In order to support those SMBs, Ascend is pursuing a strategy that’s much like the “TMS-as-hub” model cited by Darman. For instance, instead of building and updating its own carrier-vetting module, it has integrated its TMS with carrier-vetting sites like Highway, Truckstop’s RMIS, Search Carrier, and Descartes’ MyCarrierPortal.
Those “no code” integrations are easy to use, which is critical for small players that don’t have the IT expertise to handle complex integration projects. However, the challenge is that cargo thieves have access to these same services, which makes it easier for them to exploit any weaknesses that might exist.
“The bad actors are using all the same tools, including the APIs [application programming interfaces], and they’re looking for cracks to sneak through,” says Higham. “Everybody is pasting over the old cracks as fast as we can, whether it’s fraud, double-brokering, or theft. The main vetting sites like Highway are not being overwhelmed, but the bad guys are doing nothing but [looking for] ways to [circumvent] the good guys.”
In light of these challenges, it’s no wonder TMS users and vendors across the industry are scrambling to stay nimble, notes BlueGrace’s Velkov. “When the landscape shifts—whether it’s a legal standard, a fraud pattern, a fuel spike, or a disrupted shipping lane—the platform has to let us stay carrier-agnostic and move freight to whichever mode and carrier makes sense in the moment, instead of the customer finding out secondhand that something changed,” he says.
In a turbulent era for transportation, TMS users everywhere want one thing above all—predictability.
