Why Use a Transportation Management System?
byNick Fryer/December 11, 2024/inTechnology
Nick Fryer Vice President, Marketing
What Is a Transportation Management System?
A TMS is a logistics software platform that assists businesses in the planning, execution, and optimization of the incoming and outgoing movement of goods. A TMS provides visibility into day-to-day transportation operations, trade compliance information and documentation, and ensures the timely delivery of freight. Whether by land, air, or sea, transportation management systems also streamline the shipping process and make it easier for businesses to manage their transportation operations.
Benefits of a TMS for Logistics
TMS offers many logistics benefits to both shippers and their customers, including:
Everything You Need Is In One Place
TMS software allows companies to manage their transportation and logistics operations from a single platform. Clients have the opportunity to book, manage, and track their shipments at any point in time of the supply chain management process. Through TMS, clients can also rate the shop, letting the carrier know if they are unhappy with any part of the freight management process.
Lowered Transportation Costs
A TMS can help you optimize route planning, reducing fuel consumption and overall shipping costs while improving service levels and streamlining supply chain operations.
Automate Manual Tasks and Reduce Errors
Since everything is handled digitally through TMS, the need for manual entry is reduced significantly. A TMS that is integrated with your ERP (Enterprise Resource Planning) system or ordering system means that loads will automatically be generated based on customer orders. Significant data such as weights, pickup/delivery times, and destinations are automatically populated through TMS, reducing human error and the risk of client-carrier miscommunication. Rather than plugging in information to a clipboard notepad or unorganized spreadsheets, all order and route information is in one place, ensuring the transfer of accurate information between stakeholders.
Route Optimization and Load Consolidation
Optimization tools provided by TMS give you the ability to set parameters for the load, then suggest or build the optimal load and route for you to save time and have an efficient and on-time delivery. Routes can even be viewed on a map, giving you a visual of where the order is planned and allowing you to make changes as necessary.
Receiving Meaningful Analytics
Since logistics information passes through TMS, data can be transfigured into actionable reports and dashboards. Measure freight costs by product, freight spend vs. budget, and much more, allowing you to make changes that may impact your bottom line.
TMS also allows you to measure carrier performance and view real time tracking data, allowing you to hold carriers accountable and keep your customers satisfied. These reports and dashboards help logistics professionals stay on top of metrics that affect their company’s bottom line and the overall customer experience.
Gaining Visibility on When Shipments Will Be Received
Real time shipment tracking and analytics through TMS provide clients with visibility, allowing them to track transit time and give them insight on when orders will arrive at their final destination. Custom alerts allow users to manage by exception and be proactive on shipments that are in danger of being late.
Making Paperwork Digital and Easily Accessible
Transportation management software makes vital paperwork much more convenient to access. BOLs, PODs, and other paperwork are digitized and can be quickly searched and accessed straight from the system, making processing easy, efficient, and accurate.
Increasing Scalability
Companies are constantly growing and changing, so your software should grow and change with you too. The right TMS helps you to evolve your business without changing your transportation operation strategy. Whether you’re growing through acquisition, adding new departments, or developing new products, the proper TMS will scale to meet the demands of a growing business.
Enhancing Relationships With Clients
As customer demand increases, orders need to get to their destinations faster, cheaper, and with complete visibility. Utilizing a TMS allows companies to provide exceptional customer service while meeting high customer expectations. Timely deliveries and proactive communication facilitated by the TMS result in greater customer satisfaction and loyalty.
Easily Integrate With Existing Systems
A modern TMS, such as the Sheer TMS, will integrate with your existing systems, such as ERP, Warehouse Management Systems (WMS), or CRM platforms. As omni-channel supply chains and online ordering become more prominent, many companies choose to integrate their TMS with their ecommerce solution and other ordering systems because it fosters a wrinkle-free process across different teams and departments; the flow of information is clean, consistent, and speeds up operations. A modern, full-featured TMS will accept data via API, EDI, or any number of other data formats.
Making Paperwork Digital and Easily Accessible
Transportation management software makes vital paperwork much more convenient to access. BOLs, PODs, and other paperwork are digitized and can be quickly searched and accessed straight from the system, making processing easy, efficient, and accurate.
Features of a Transportation Management System Platform
- Automatic Order Processing — As your business grows, manual entry becomes more challenging and prone to error. Utilizing the automation features of a TMS for order management reduces or eliminates time spent on manual data entry and the risk of human error.
- Auto Carrier Selection — Manually selecting carriers for each and every shipment can be a tedious process. A TMS can make this process more efficient and accurate by automating the best carrier option for the shipment based on parameters such as mode, price, and desired delivery time and date.
- Multimodal Shipping — “Lite” TMSs are often truckload-centric. However, as businesses grow, shippers often find that they need to ship via multiple transportation modes. A sophisticated TMS can handle all shipping modes and methods, from truckload to LTL, ocean, and air, as well as international and domestic shipping.
- Shipment Consolidation — Shipping products via multiple less-than-truckload shipments can be inefficient, costly, and environmentally unsound. To gain efficiency and cost savings, look for a TMS that can consolidate multiple LTL shipments into a full truckload.
- Dispute Management — Managing the claims process manually is a drain on precious company resources and can lead to customer and carrier dissatisfaction. A TMS offers a centralized method to resolve disputes and manage all aspects of the claims management process, supporting better customer service and carrier relations.
- Order Tracking — Whether your business is B2B or B2C, your customers have become accustomed to knowing where their orders are at all times at the click of a mouse. If you lack this level of supply chain visibility, you are putting your company at a serious disadvantage vs. your competitors. Real-time tracking also helps you anticipate when a shipment may be late, allowing you to proactively reach out to the carrier for resolution and to update your customer before the late delivery becomes an unwelcome surprise.
- Freight Audit and Payment — Manually processing and auditing invoices is rife with errors and inaccuracies that can lead to inaccurate and late payments. Your TMS system should include a module that automates the entire process of invoicing and auditing invoices.
Who Should Implement a Transportation Management System?
Shippers of nearly any size can benefit from implementing a TMS. While some companies choose to implement a TMS themselves, many find that partnering with a 3PL or 4PL provider for TMS implementation and transportation management is the most efficient and cost-effective approach. If your plans for the future include growth, expansion into new markets, or acquisitions, a TMS is a “must have” tool to help bring order and visibility to your supply chain.
Sheer Logistics Helps You Make Sense of It All
Selecting the right TMS for your business is critical, and migrating to a technology-based solution for your transportation operations can seem daunting, but we’re here to help you make sense of it all. As a full service managed transportation provider, Sheer will not only implement a tailored TMS solution, but can also act as an extension of your transportation team to help you optimize your supply chain processes.
Implementing a TMS with Sheer Logistics helps you improve transportation processes and can make your shipping operations more efficient. Integrating your TMS with an Inventory Management System (IMS) and WMS can enhance your visibility to inventory and warehouse efficiency. We’re proud to partner with MercuryGate, an industry leading TMS software provider which has a unique combination of power and usability.
To learn more, please contact us.
