A Transportation Management System: What Is It?

The actual movement of products, both incoming and outgoing, may be planned, carried out, and optimized with the use of technology by enterprises using a transportation management system (TMS), a logistics platform that ensures that the shipment is compliant and that the necessary paperwork is accessible. Frequently, a bigger supply chain management (SCM) system includes this type of technology.

A transportation management system (TMS), often referred to as transportation management software or solution, ensures the timely delivery of freight and commodities, offers insight into daily transportation operations, and provides trade compliance information and paperwork. Whether a company uses land, air, or sea transportation, transportation management systems simplify the shipping process and help firms manage and maximize their operations.

Table of Contents

The reasons a transportation management system is necessary

Supply chains rely heavily on transportation management systems, which have an impact on all stages of the procedure, from logistics and lifecycle management to planning and procurement. A strong system’s wide and thorough visibility promotes more effective transportation planning and execution, which raises customer satisfaction. More sales follow, which further aids in the expansion of enterprises. We live and do business in such a dynamic global trade environment that it is critical to have a system that enables you to effectively traverse the challenging procedures around trade rules and compliance.

Who Makes Use of a TMS?

The majority of companies that employ transportation management systems are those that often ship, move, and receive products, such as:

Producers

Distributors

Online retailers

retail establishments

Businesses that offer logistics services include logistics service providers (LSPs) and third- and fourth-party logistics (3PL and 4PL) firms.

Enterprises across almost all sectors, including life sciences and construction, employ transportation management systems. The majority of customers are companies that spend $100 million or more on freight each year, but smaller companies can now afford to profit from the integration of a transportation management system into their supply chain thanks to the availability of cloud-based TMS systems.

TMS products and services

Enterprise resource planning (ERP) software and supply chain management (SCM) solutions can be connected with a stand-alone transportation management system that businesses purchase. You may combine your TMS with a global trade management (GTM) program, or some TMS systems provide trade documentation features. Additional TMSs, usually with less features, can be found as add-ons to ERP and SCM packages.

Organize, carry out, and maximize for prompt delivery of the products

Any firm may plan, carry out, and maximize the actual flow of commodities with the aid of a TMS.

Organizing

Based on cost, efficiency, and distance, a TMS assists the company in choosing the optimum carrier and shipping method, including optimizing multi-leg carrier routes. In addition to providing global trade management capabilities and insight into all stages of the supply chain, a robust TMS can also offer information on trade and tariffs, as well as any possible delays that can result from customs and other trade restrictions.

Achievement

Transportation management systems provide a wide range of execution functions, some of which include matching loads and corresponding with carriers, recording and monitoring shipments, and supporting freight billing and payment. Advanced TMS solutions may facilitate real-time information transmission between carriers, distributors, warehouses, and customers by offering track and trace services. These sophisticated systems could also be able to manage intricate international logistics, such as ensuring that shipments comply with trade regulations by supplying appropriate import and export papers.

Scaling up

The capacity to analyze and track performance via reports, dashboards, analytics, and transportation intelligence are typical TMS optimization capabilities.

Advantages of a TMS

Businesses may reap several advantages from a TMS, as well as from contemporary transportation management in general. Among the principal advantages are:

lower expenses for both the company and the final client

streamlining supply chain procedures across carriers, modes, and locations

Business process automation for quicker and more accurate invoicing and documentation

Enhanced security and visibility, particularly in transit

Time savings: Shorter delivery times and less delays are attained by eliminating manual tasks.

the capacity to trace cargo on a single platform both locally and internationally

Improved compliance with import and export regulations to reduce fines and shipping delays

Better reporting yields new business insights that accelerate action and enhance processes.

real-time information, reduced shipment delays, and enhanced customer satisfaction and customer service

the capacity to grow the company by satisfying and beyond client expectations for prompt, reliable delivery.

The benefits of a cloud-based TMS

Many of the same business advantages that other cloud systems offer are also provided by a cloud-based transportation management system, such as increased economies of scale, decreased total cost of ownership, no upgrade fees, and a quicker return on investment (ROI).

Additional advantages of a cloud-based TMS for IT include quicker deployments, less time required for installation and training, automated upgrades with the newest capabilities, and enhanced security.