Transportation management systems (TMS) have become more commonplace in the logistics industry as businesses turn to technology to gain a competitive advantage and remain relevant in the market. Technology has completely changed and revolutionized how we conduct our daily lives, from consuming entertainment, buying groceries, and interacting with one another. Naturally, new technological improvements have significantly influenced the transportation sector.
A TMS application was a logical step in the industry, as it allows companies of all shapes and sizes to save time and money, streamline their logistics operation, increase their supply chain visibility, and improve customer satisfaction.
What Is TMS Software, Exactly?
According to Gartner, “A TMS (transportation management system) is used to plan freight movements, do freight rating and shopping across all modes, select the appropriate route and carrier, and manage freight bills and payments.”
Transportation management system software is a logistics solution that helps organizations plan, execute, and optimize freight management. A TMS platform helps with the movement of goods, both incoming and outgoing while ensuring that shipments are compliant and proper documentation is available.
The TMS system plays a central role in the supply chain by affecting every part of the process. This includes everything from planning and procurement to logistics and lifecycle management. Enhanced supply chain visibility leads to more efficient transportation planning and execution, as well as customer satisfaction.
Typically part of a larger supply chain management system, a transportation management solution provides enhanced visibility into the daily transportation operations and trade compliance and streamlines the shipping process. Doing so also makes it easier for users to manage their operations, whether by air, land, rail, or sea.
A TMS platform can be used by companies to manage their freight operations digitally instead of having to call and email their logistics partners continuously. The transport management system will typically sit between the organization’s warehouse management system (WMS) and ERP system. The TMS solution will bridge the WMS to the ERP system for an overall increased supply chain efficiency. Any orders flowing between the WMS, TMS, and the ERP system will create continuity and cut down on the time it takes from the moment a customer places an order to the final delivery.
At its core, most TMS software have rating, tracking, and booking functionalities. More advanced solutions will also offer dashboards, reporting, freight pay and freight audit, and other similar modular features that can be added as needed.
Different Types of Transport Management Software
TMS systems have been around since the 1980s and were introduced as a solution to move freight between different trade partners more efficiently and affordably. Modern TMS solutions cater to organizations of different sizes operating in many industries.
Some TMS software focus on small to mid-sized businesses (SMB) and offer only basic TMS functions, such as booking and rating. The TMS provider that caters to a smaller market will typically not provide advanced features, such as reporting, analytics, or integrations. They will instead focus on a lower total cost to own (TCO).
Other modern TMS solutions will focus on the high-end market and cater to enterprise-size organizations. These TMS solutions will usually have fewer customers since their price point makes it difficult for smaller companies to use. While these enterprise-class systems provide more advanced TMS functions, most of these legacy systems will typically come as a complete set. This means that even if you don’t need all the features, you will still have to pay for the entire package.
Who Uses a TMS Platform?
Transportation management software is mainly used by companies regularly involved in the shipment and movement of goods. Among these, we can include:
- eCommerce businesses
- Companies that provide logistics services, such as freight brokerage companies, freight forwarder businesses, third-party and fourth-party logistics (3PL and 4PL) providers, and other such logistics service providers (LSPs)
TMS Offerings and Benefits
Companies can purchase a standalone TMS system integrated with their existing ERP, WMS, and SCM solutions. Some TMS software also have trade documentation capabilities and can even complement a global trade management (GTM) application. On the other hand, other systems will have fewer features or can even be presented as modules within larger SCM or ERP systems.
Depending on each company’s needs, a TMS can provide a multitude of benefits. Among these, we can include the following:
- Lower operation and transportation costs for the company and its customers
- Simplifying supply chain processes across all modes and carriers
- Automating business operations to increase the speed and accuracy of billing and documentation
- Increased security and visibility, particularly during transit
- With fewer manual steps needed to be taken, delivery times will also increase, while delays will decrease
- The possibility to track freight in transit, both locally and globally, and all from a single platform
- Fewer shipment delays and penalties as a result of better import and export compliance
- Have access to better business insights as better reporting also leads to faster action and process improvement
- Better customer service and customer satisfaction with real-time updates and fewer delays
- The possibility to scale your business by meeting or even exceeding customer demands for fast, on-time shipments
Putting the TMS to Good Use
A TMS can help organizations plan, execute, and optimize their transportation operation as follows:
- During the Planning Phase – A transport management system can help freight brokers choose the optimal mode of shipment and the best truckload carrier based on a wide range of variables such as cost, efficiency, routes, or distance. A robust TMS will also help increase the supply chain visibility, and provide data on trade and tariffs. IT can also provide information regarding any potential delays that can happen as a result of customs or other trade regulations.
- During the Execution Phase – The execution features of a TMS can vary widely from one system to another. Among these, we can include the possibility to match loads and communicate with freight carriers, tracking and documenting shipments, various billing and accounting features, and settlement. Some modern TMS solutions also provide enhanced track and trace services that allow for real-time data exchange between freight brokers, carriers, distributors, and customers. Some of these advanced systems may also provide the functionality to handle international logistics, such as import and export documentation to ensure shipments will be trade compliant.
- During the Optimization Process – Optimization functionalities typically include measuring and tracking performance using analytics, reports, dashboards, and transportation intelligence.
The Added Value of Cloud-Based TMS Systems
Cloud-based transportation management systems deliver most of the same benefits as their in-house counterparts. However, since these systems are in the cloud, they will have a lower cost of ownership, no upgrade fees, and a better return on investment (ROI). Cloud-based solutions also benefit from faster deployments, less onboarding and installation, automatic updates, and improved security.
When it comes to smaller businesses, they have traditionally relied on spreadsheets and other manual methods for their transportation management. That said, cloud-based TMS solutions make it easier for all companies to take advantage of what transportation management solutions have to offer. TAI software is one such TMS. Specifically, but not exclusively designed for freight brokers, TAI software helps LTL brokers scale their operations more manageably and with less hassle. To gain a competitive advantage, freight brokers need to use automation that connects them directly to the system, schedules, and routes, making everyone’s life much more comfortable. TAI TMS also operates a state-of-the-art self-service customer portal that provides automated dispatching and tracking capabilities.
TAI TMS also has direct API and EDI carrier integration that provides you with insights and control over the entire shipment lifecycle. It also provides automated dispatching and tracking capabilities that will move shipments from quote to delivery without the need for any direct human intervention. Any carrier updates will feed directly into the TMS activity log, making it quick and easy to access customer updates in real-time. TAI TMS will allow for rapid scalability where you can take on additional shipments without increasing your labor costs.
TAI Software’s Accounting Module allows the entire accounting process to be easily handled from a centralized location. The accounting dashboard provides a high-level view of all Accounts Receivable and Accounts Payable activities. This way managers are always informed about the financial situation.
The Accounts Receivable Module makes it easy to compile customer invoices and keep track of all payments received. You can also change payments at any time, thanks to its easy-to-use interface. On the other hand, the Accounts Payable Module organizes all motor carrier bills and enables the user to approve and pay the carriers from the system.
Invoices are automatically generated, along with all the necessary documentation. They are stored directly in the system and emailed directly from the platform. Essentially, TAI TMS can combine automation with the entire shipment lifecycle throughout the supply chain. Its state-of-the-art accounting module will allow you to easily download data and integrate it into your accounting software like QuickBooks or Microsoft Dynamics GP. The Tai TMS Accounting Module is the perfect tool to simplify the accounting processes for freight brokers and other freight logistics professionals operating in the transportation industry. Request your free demo today and put your freight company in the best position possible!