Transportation management is the logistical arm of supply chain management by automating and overseeing the flow of items. Primary functions include setting rates, optimizing routes, coordinating deliveries and tracking goods.

A TMS handles these manual, time-consuming processes quickly and accurately.

A wide range of industries use a TMS:

• Retail and Manufacturing
• eCommerce
• Pharmaceuticals
• Food and Beverage
• Third-Party Logistics (3PL)

What’s the usability of a transportation management system across industries? They improve efficiency by offering real-time visibility into items in transit, delivery accuracy and detailed analytics.

A TMS is a lynchpin for timely, cost-effective and efficient operations in an economy that values rapid and precise deliveries.
Here are some other ways a transport management system can make life easier

Optimize Shipping Routes

Sophisticated algorithms and real-time data help determine the optimal shipping route based on factors such as cost, time, distance, transportation mode and service level. They also consider carrier rates, destination, lead times, shipping volume and more.

The system analyzes data to find the best path based on specific needs, significantly reducing transit times and costs. This optimization enhances visibility into the transportation process, letting shippers track shipments in real time and address concerns promptly.

Transportation management systems achieve route optimization through modules like:

• Carrier Rates Analysis
• Destination Considerations
• Transportation Mode Selection
• Carrier Performance Evaluation
• Lead Time Assessment
• Real-Time Traffic and Weather Conditions Monitoring

Reduce Transportation Costs

Cut costs by transferring resources from healthy sections of the supply chain to areas that need them.

Automatically consolidate shipments into their most optimized forms to save space and reduce truck usage. Consolidation helps arrange shipments by weight and optimal grouping.

Streamlining billing processes can cut resource waste. Manual accounting entries often lead to expensive errors, but a transportation management system can speed up tasks and boost accuracy.

If you’re looking to save money, make sure these modules are included in your final choice:

• Invoice Management
• Carrier Cost Calculation
• Load Optimization
• Shipment Consolidation
• Claim Management
• Cost-Plus and Door-to-door Models

Enhance Shipment Visibility

TMS systems improve shipment visibility by enabling real-time tracking, superior inventory management and dynamic workflows.

Shippers and logistics service providers can gain real-time visibility into freight in motion, track carriers, manage day-to-day transportation operations, and exchange compliance information and documentation.

Relevant software modules in transportation management systems include:

• Procurement
• Supply Chain Control Tower
• Data Repository
• Freight Settlement for Audits
• Invoicing Functionality.

Streamline Carrier Communication

What is a TMS’ role in enhancing collaboration?

It can improve carrier communication through mobile dispatching, automated updates, one-click dispatching for drivers, two-way communication and mobile reporting.

It simplifies back-office tasks, enhances freight and apparatus pairing, and enables intuitive trip building to improve communication.

What’s included in a TMS to facilitate this?

• Fleet Management
• Accounting Module
• Driver Management and Communication

Enhance Load Planning Efficiency

Freight optimization tools automate load planning, reducing human labor hours.

This tool groups open shipments into loads depending on several parameters, including ship and delivery date flexibility, weight per shipment, number of parts, driver hours, and more.

By selecting settings and running the optimizer, you can automatically build loads based on the findings, saving time and lowering costs.

Relevant TMS modules include:

• Freight Optimization
• Load Building
• Optimizer Tool
• Real-Time Tracking

FAQs

How do I create a TMS RFP?

Assembling a solid transportation management RFP is a daunting task. While we can’t go into the entire process here, we can cover the major steps involved in creating one:

1. Form a Team: Assemble a diverse group with relevant expertise to evaluate proposals.
2. Set Criteria: Consider factors like software functionality, support, pricing and evaluation timelines.
3. Draft RFP: Include an introduction, scope of work, deliverables, timelines and budget.
4. Select Channels: Choose suitable distribution methods like email, online portals or direct mail.
5. Establish Timeline: Define the RFP process timeline and proposal submission deadline.
6. Set Submission Guidelines: State the expected format, necessary documentation and submission guidelines.

What is a transportation management system worth?

The cost of a TMS system varies depending on complexity, functionality and deployment style. Implementing a simple option can cost around $50,000, whereas an advanced, feature-rich system may be around $250,000.

However, development expenses aren’t the sole concern. Significant implementation costs vary depending on integration charges, system complexity and consulting fees.

Implementation can take a while. A system of intermediate complexity typically runs for four to five months. However, more complicated systems can eat up nine months to a year.

Is logistics management the same as transportation management?

No. Logistics management involves the planning, implementation, and control of the movement and storage of goods and services.

Transportation management focuses specifically on the movement of goods from one place to another through activities like route planning and carrier selection.

What are the four basic functions of transportation management?

Transportation management helps you optimize shipping routes, reduce transportation costs, enhance shipment visibility and streamline carrier communication.

What is the study of transport management?

Transportation management explores the processes, logistics and strategies that safely move goods and services to their destination.

Research covers means of transportation, routing, scheduling, vehicle maintenance, regulatory compliance and the use of transportation management software.

What are examples of transportation management systems?

Examples of transportation management systems include Oracle Transportation Management, Transplace TMS, MercuryGate TMS, JDA TMS and SAP Transportation Management.

Who needs a transportation management system?

Businesses that require efficient handling of their logistics and supply chain operations typically need a TMS. Manufacturers, eCommerce businesses, logistics service providers, freight shipping enterprises, retailers and distribution companies are vital players.

What are the future trends in transportation management systems?

Future transportation management trends include using artificial intelligence, automated fare collection and real-time data to manage freight efficiently.

These technologies will improve route optimization, delivery times and sustainable decision-making.

How does a TMS integrate with other business systems?

A TMS integrates with other business systems like ERP (enterprise resource planning), WMS (warehouse management system), and CRM (customer relationship management) through APIs (application programming interfaces).

Integration allows seamless data exchange and coordination between systems, resulting in streamlined operations, real-time visibility across processes and improved decision-making.

How do I select a transportation management system?

Choosing the best TMS requires you to consider your company’s size, budget and preferred implementation approach.

By preparing specific questions for possible providers, you can determine how effectively their system meets your specific needs and long-term objectives. Use our transportation management checklist to easily build a list of what you need from TMS software based on your business requirements.

Have a question about which software vendor is right for you? We’d love to help! Reach out to our team for individualized recommendations by messaging [email protected] or via phone at 855-850-3850.