The central figure in this evolution is the transport management system (TMS), combining all the software tools and features a transportation manager needs. In this article, we're exploring the evolution and history of TMS software, along with notable events and related developments in the transportation and logistics industry.
1970s: The Barcode
1980s: Birth of EDIFACT and ERP Systems
EDIFACT messaging protocol
There are hundreds of message definitions inside EDIFACT, and different versions for each. In logistics, IFTMIN (International Forwarding and Transport Message - Instructions) became the most common EDIFACT message, transmitting shipment details from shipper to carrier.
Sample IFTMIN (Transport Instruction) message - 1 EUR pallet to John Doe:
UNA:+.? ' UNB+UNOA:3+4012345000016:14+4023083000008:14+240823:1550+12345' UNH+1+IFTMIN:D:96A:UN' BGM+610::9+1234567+9' TSR+++3' FTX+DEL+++Delivery to John Doe' FTX+AVI+++Mr Adam Doe / 0123-12345678 (Avis recipient)' FTX+SUR+++FRAGILE' FTX+SPH++T' TOD+6++EXW' RFF+DQ:123456' RFF+ON:654321' RFF+ITP:PROVIDER-NAME' NAD+CN+++John Doe+Sample Street 10+Düsseldorf++12345+DE' NAD+CZ+4012345000016' NAD+FW+4022128000003' GID+1+36:CT' FTX+AAA+++Test Goods' MEA+WT+AAE+KGM:93' PCI+33E' GIN+BJ+00340258761202887418' SGP+1' GID+2+2:201' FTX+AAA+++Test Goods' SGP+1' EQD+201+1' EQN+1' UNT+19+1' UNH+3+IFTMIN:D:96A:UN' BGM+610::9+1234567+9' DTM+137:2408200825:203' TSR+++3' FTX+SPH++T' TOD+6++DDP' NAD+CN+++Sam Doe+Sample Street 12+Demotown++99999+DE' NAD+CZ+4012345000016' NAD+FW+4022128000003' GID+1+1:EP:::Euro pallet' FTX+AAA+++Test Goods' MEA+WT+AAE+KGM:150' PCI+33E' GIN+BJ+00340258761202887425' UNT+13+3' UNZ+1+12345'
ERP systems started as Material requirements planning (MRP) systems in the 1960s, when the J.I. Case tractor company and IBM collaborated to create the first MRP system.
In the 1980s, MRP evolved to MRP II, which combined financials and accounting with the traditional features of MRP - inventory and materials management. It's likely that the first modern ERP system was one of the more advanced MRP II systems, but they were still private developments and based on the mainframe computer.
Personal computer sales exploded in the early 1980s. The term ERP as we know it today was officially introduced in 1990 by Gartner. It had a graphical user interface and included all areas of the manufacturing business that were not included in MRP II, like human resources, scheduling, and sales. By 1990, ERP systems had begun to experience massive growth. The first modern ERPs on Windows included names like Visual Manufacturing, Vista, Vantage (Epicor) and KAOS.
All the ERP systems in the 1990s used a legacy on-premise model until 1996, when Netsuite created an ERP system that worked across the business functions of a company but was delivered over the internet.
1990s: Transportation Management Systems and The Dotcom Wave
As ERP modules
- In 1987, SAP introduced its Transportation Management module for the SAP ERP, allowing businesses to optimize logistics and supply chain functions. Read more on the evolution of SAP Transportation Management.
- Global Logistics Technologies (G-Log), founded in 1999, developed their GC3 platform, a comprehensive transport management and freight optimization system. Oracle Corporation acquired G-Log in 2005, rebranding GC3 as Oracle Transportation Management (OTM).
These modules primarily focused on process management and visibility for the shippers, providing a 10,000-foot-view view of their logistics operations, but without system-to-system integrations.
As Standalone Services
- Descartes, established in 1981, was one of the earliest player in the TMS landscape, with its popularity gaining traction especially in the mid-2000s. They started offering a suite of transportation management software solutions which were built with modularity in their core, meaning customers could mix and match different modules depending on their needs. Descartes is also known for their large carrier network called the Global Logistics Network™.
- Transporeon, founded in 2000 in Germany, aimed to bridge the gap observed in the existing ERP-TM modules. They connected industrial and retail businesses with their logistics providers, creating a seamless flow of information and transactions. By 2023, Transporeon's significant influence in Europe led to its acquisition by Trimble.
2000s: The Rise of Web APIs and the Cloud
One-way to two-way data Exchange: EDIFACT to SOAP and REST APIs
The ability to access data from anywhere gave birth to real-time collaboration among global teams. Plus, the cloud's rapid implementation times and automatic updates ensured firms kept pace with the latest technological features, without the cumbersome processes of the past.
Fleet Management Software and GPS Tracking
The first GPS satellite was launched in 1978, and President Ronald Reagan opened the GPS system to the public in 1983, but with a decreased accuracy of around 100 meters. In 2000, US President Bill Clinton signed a bill to grant the full GPS accuracy to the public.
This gave businesses the ability to monitor vehicle locations, optimize routes, and obtain detailed vehicle diagnostics in real-time. The first vehicle tracking systems launched in the late 1990s, and among the first solutions were Frotcom 1.0 (1997) and Fleet Complete (1998), which still operate today, having evolved considerably and offering advanced fleet management software solutions.
Fleet management software is used by both carriers/freight forwarders and shippers operating their own fleet to track, monitor and plan their deliveries and vehicles. Shippers using their own fleet can integrate their fleet management software into their TMS, so it can be used as a normal transport service provider, next to their third party carriers. Check out an example of how this setup works based on the example of Fleet Complete FMS and Cargoson TMS.
Dock Scheduling Software
Nowadays, most shippers would ideally like to centralize all their transport management needs in one software. By now, most TMS providers have built their dock scheduling software offerings which could be seamlessly integrated with your TMS solution (example dock scheduling software - Loading Calendar).
2010s: Digital Transformation
eCommerce and Multi-Carrier Shipping Software
These plugins were used to automate some of what a full-featured TMS would, like carrier selection, label printing and shipping notifications, but added features specific to the needs of eCommerce businesses like automated returns and branded tracking.
Cloud-Based Transportation Management Systems
Being cloud-native, these platforms ensure accessibility from any location, instant updates, rapid implementation times, and dramatically lower software costs. Combining the features of a traditional transportation management system and modern multi-carrier shipping software, systems like Cargoson enabled modern shippers to integrate with all of their carriers—big or small—in a uniform process, upon customer request and without added fees.
Read more: https://www.cargoson.com/en/blog/transportation-management-system-for-small-business
Watch a demo of a modern multi-carrier transportation management system (Example with Cargoson):
Virtual Freight Forwarders
2020s: Green Logistics and Sustainability
The Paris Agreement
From Carbon Accounting to Real-Time Transport Emission Calculation
If you'd like to test and play around with different shipment data, you can use the publicly available transport CO2 emission calculator.
Author's Note: This article is a living document, intended to evolve over time. Should you find any omissions, inaccuracies, or simply have suggestions, queries, or additional insights, feel free to drop me an email at email@example.com.