AI & data hurdles stall transport progress & sustainability

Global research conducted by Manhattan Associates and Vanson Bourne has revealed significant challenges faced by organisations seeking to leverage artificial intelligence (AI) in transportation management, with issues such as integration difficulties and poor data quality highlighted as major barriers.

Operational visibility and efficiency

The survey covered 1,450 senior decision-makers from a range of sectors including manufacturing, retail, wholesale, consumer goods, grocery and food & beverage, spanning regions in North America, Latin America, Europe, and Australia. Respondents identified improved operational visibility as a key factor in customer satisfaction and cost reduction, but noted fragmented systems continue to make comprehensive visibility and efficiency challenging.

The findings showed that 60% of organisations believe enhancing visibility yields greater customer satisfaction due to more accurate and timely updates, while 50% of respondents cited a reduction in transportation costs as another core benefit.

AI adoption and readiness

The research indicated that 61% of organisations expect to have fully autonomous Agentic AI - capable of acting independently to achieve specific goals - within the next five years. However, only 37% stated that they have deeply integrated AI and machine learning in their transportation management systems (TMS) at present.

"Transportation is the backbone of supply chains, essential to ensuring goods are delivered on time to meet customer expectations," commented Bryant Smith, Director, Transportation Management Systems at Manhattan Associates. "Yet, managing transportation is becoming increasingly complex, pressured by demands on shorter fulfilment times, capacity and cost efficiencies, tighter sustainability regulations, and the growing necessity for access to end-to-end visibility across all operations."

Although almost half (48%) of organisations feel very prepared for autonomous agents by 2030, nearly all (99%) reported either experiencing or expecting to experience hurdles. The most common concerns cited were skill shortages (49%), integration difficulties (44%), as well as issues around data quality and availability (44%).

In terms of cost, 48% of organisations reported spending more than 10% of their transportation logistics budget on errors and disruptions. Challenges in proactively rerouting shipments (50%) and optimising dock and warehouse labour scheduling (49%) were also reported.

Sustainability compliance challenges

Pursuit of sustainability in transportation emerged as another prominent theme, with 69% of organisations indicating that sustainability is a global mandate or a significant pressure point. 62% said they are already implementing Corporate Sustainability Reporting Directive reporting, although only 34% have factored sustainability into operational planning, 30% into procurement decisions, and 31% offer carbon-friendly fuel solutions.

Sustainability compliance was most frequently noted as a constraint expected to impact organisational performance over the next five years. The research suggested a need for modern TMS capable of delivering the degree of data visibility and reporting required for effective compliance.

Future expectations

Manhattan Associates' research revealed that 78% of surveyed leaders view transportation management as a strategic imperative today, a figure projected to rise to 86% by 2030. Advances in planning, forecasting, and modelling were met with strong confidence by 82% of organisations, who expect these capabilities to help reduce freight costs by at least 5% over the next five years.

When asked about the adoption of enabling technologies, 60% have integrated their TMS with Sales and Operations Planning systems and 56% are using predictive analytics or AI. However, fewer are adopting tools such as historical trend analysis (38%), automated booking and tendering (36%), or real-time demand sensing (35%).

Smith underscored the pressure facing organisations in the coming years: "Modern transportation management demands organisations balance a range of competing priorities, and the research clearly illustrates many organisations are still unprepared to meet the challenges of evolving sustainability mandates, expectations around AI and the need for more visible, actionable data insights. Looking ahead to 2030, these demands will intensify, increasing the pressure on organisations to operate transportation operations in smarter more intuitive ways.

"87% of respondents anticipate that challenges in areas such as operational visibility, AI adoption and sustainability compliance will intensify, leaving their current Transportation Management Systems struggling to keep pace. Failure to act now will expose organisations to rising costs, questions over long-term efficacy, and the risk of falling short of customer promises," Smith concluded.