A Transport Management System (TMS) is a technology-based logistics platform that helps companies in planning, implementing, and improving the transportation of goods, both incoming and outgoing, as well as ensuring that the shipment is legal and that the proper paperwork is accessible. Often, this system is linked into a larger supply chain management system.

A Transportation Management System, often known as transportation management software provides visibility into daily transportation operations, trade compliance information and paperwork, and ensures the successful delivery of freight and goods. Transportation Management Systems also make it easier for organisations to manage and optimise their transportation operations, whether by road, aircraft, or ocean.

 

Why is a Transportation Management System Necessary?

Transport Management Systems are crucial in supply chain operations, covering each step of the process from planning and purchasing to logistics.  A powerful system’s broad and deep visibility allows for more efficient transportation planning and execution, that leads to improved customer satisfaction. With such a dynamic world trade environment in which we live and transact, it’s critical to have a system that can help you negotiate difficult trade policies and compliance processes.

 

Who Uses a Transport Management System?

Transportation Management Systems are typically used by businesses that regularly ship, move, and receive commodities, such as:

  • Suppliers
  • Retail businesses
  • Manufacturers
  • Ecommerce Businesses
  • Third-party and fourth-party logistics companies, as well as logistics service providers, provide logistics services

Companies in almost every industry, from manufacturing to biological sciences, use a transportation management system. Companies with annual freight expenditures of $100 million or more are the primary customers, although the emergence of cloud-based TMS systems has made it more affordable for smaller businesses to reap the benefits of adopting a transportation management system into their distribution chain.

 

The Advantages of a TMS

  • Cost savings for both the company and the end consumer
  • Better reporting leads to faster action and process improvement as a result of new business insights.
  • The capacity to grow the company by meeting and exceeding client demands for quick, on-time deliveries.
  • With real-time updates and less shipment delays, customer service and satisfaction have improved.
  • Supply chain process optimization across regions, modes, and carriers
  • Business operations automation for quicker, more correct invoicing and paperwork
  • Visibility and security have improved, particularly in transit.
  • The ability to trace freight on a single platform, both local and international.
  • Reduction in time—fewer manual procedures make lesser delays and shorter delivery dates.
  • Import and export compliance is improved, resulting in fewer penalties and delays in shipments.

 

TMS challenges

Choosing the Most Suitable Carrier: Not all shipments are created equal. Shipments that are time or temperature sensitive, require special courier services, or must be handled with extreme caution are all possible scenarios. As a result, a single carrier should not handle all goods. While a few carriers are probably more suited to longer trips, others may be able to supply you with the specialised services you need for a small price.

Keep Quotes Organized: You don’t want to be on the phone or bouncing from website to website asking for pricing from the carriers in your network if you’re working with a variety of shipments. Calling several carriers and obtaining prices can be a time-consuming operation that diverts your attention away from other important areas of your company.

Gathering Data: If you don’t have a Transport Management System in place, You may have a basic gut impression about who was the cheapest carrier over the last year, or which carrier had the greatest percent of on-time deliveries. It’s difficult to know for sure without technology on your side.

Shipment Tracking: Businesses don’t always utilise the same shipping companies for all of their shipments. It’s not unusual for a number of separate cargos to be in transit across the country on different business trucks. As a result, tracking freight could become quite difficult. Without a Transport Management Software, you or someone in your company may be required to manually enter shipment numbers into forms on multiple carrier websites.