A Transportation Management System (TMS) is a logistics platform that makes use of various technologies to help companies plan, execute, and optimize their inbound and outbound logistics. A TMS software also makes sure that shipments remain compliant and that all documentation is ready and available whenever it’s needed. These platforms are usually part of a larger supply chain management (SCM) system. A TMS is also sometimes known as a transportation management software or a transportation management solution and will provide enhanced supply chain visibility on all transportation operations, documentation, and trade compliance information that will ensure expedited delivery of freight and goods.
Transportation management systems also help streamline the shipping process, making it easier for businesses to manage their different modes of transportation, be it by sea, land, rail, or air. TMS systems also play a central role in supply chains, touching every part of the process. This goes from the planning and procurement stage, all the way to lifecycle management. And thanks to its enhanced visibility and transparency, more efficient transportation planning and execution is not only possible but completely achievable. It will not only save time but will also result in higher customer satisfaction, increased sales, and reduced costs.
In today’s highly dynamic global trade environment, logistics companies must have a system that will allow them to navigate the complicated processes surrounding trade policies and compliance. This is where a top transportation management software comes into play.
Who Uses a TMS Solution?
The Transportation Management Systems market is gaining a lot of traction among manufacturers, retailers, and various logistics companies of all shapes and sizes. In fact, in 2019, the global TMS market was estimated at $2.45 billion and is expected to reach 6.63 billion by the end of 2026. Between 2020 and 2025, its CAGR will be over 13%. This high and steady increase in TMS use is due, in large part, to retailers and logistics companies increasing their reverse logistics and backhaul support services.
That said, transportation management systems are generally used by companies that need to move, ship, and/or receive goods regularly. Most often, these include:
- eCommerce Businesses
- Logistics companies, such as third-party (3PL) and fourth-party (4PL) logistics service providers
However, businesses in almost all industries, such as healthcare, finance, automotive, food, life sciences, and others may need to use a transportation management system. Cloud-based transport management software also makes for an affordable alternative for smaller businesses and start-ups, as they can incorporate it into their supply chain operations without significant investment.
Businesses will be able to opt for a standalone TMS that can be integrated with their existing cloud or on-premise enterprise resource planning (ERP) software and other SCM solutions. Some TMS solutions take it a step further, offering trade documentation capabilities, making it compatible with a global trade management (GTM) application.
Why Use a TMS Solution?
TMS software helps businesses plan, execute, and optimize their transportation of goods and materials.
- The Planning Phase – The TMS helps companies select between the different modes of transportation and carriers available. This choice will be based on several variables, such as cost, efficiency, and distance. A top TMS will also provide visibility into every stage of the supply chain and, if it’s paired with a global trade management tool, it will also provide data on trade and tariffs and potential delays related to customs or various trade regulations.
- The Execution Phase – Many TMS features can be included in this category, such as load-matching, carrier communications, documenting, tracing, tracking shipments, assisting with freight billing and settlements, and more. Advanced TMS solutions will also provide track and trace functionalities, allowing for the real-time information exchange between carriers, warehouses, distributors, and customers. These types of systems may also be capable of handling more complex international logistics, such as providing adequate import and export documentation, ensuring that shipments are compliant with all trade regulations.
- The Organization Phase – During this phase, a TMS software should typically be able to track and measure performance, offering reports, dashboards, analytics, and various other transportation data used for more informed decision-making.
What Makes a Top Transportation Management Software?
Rather than picking the first solution that comes their way, businesses should analyze the TMS options and determine which TMS will best suit their needs and unique requirements. While the majority of solutions can be customized to fit those needs, there are certain features and characteristics that all top solutions have in common.
Covering the Basics
While you need to find a TMS system capable of fulfilling your specific needs, it will still need to provide a suite of essential core features. Some of these basic features include the following:
- Real-time inventory control and visibility features
- An architecture capable of supporting multiple users and customers simultaneously
- Multi-device capabilities
- Invoicing and cost control functionalities
- An automated inventory management system
- Logistics tracking software
- Advanced reporting capabilities
Compatibility With Your Existing Systems
Unless you are a start-up, chances are that you already have an established IT infrastructure up and running. A robust TMS will need to be able to integrate with your existing logistics solutions and not create more incompatibility problems than it’s worth. Therefore, it needs to match and adapt to your existing logistics planning, database, reporting, and management tools. It needs to create synergy and streamline information sharing between your Enterprise Resource Planning (ERP) system and its Warehouse Management System (WMS).
Comprehensive Reporting and Embedded Analytics Capabilities
Going beyond simple reporting, a top TMS software will be able to gather and analyze data that was previously inaccessible to your organization. It should be able to generate highly customizable reports that will address your needs and challenges. Its embedded analytics should combine supply chain visibility with other useful insights and provide actionable information. If, for example, you experience regular delivery delays, a mediocre tracking software will only provide you with the reason for the delay.
Embedded analytics platforms, however, will also offer possible solutions to the problem, such as different quotes from other freight forwarders, alternative and/or optimal routes, and more. Lastly, the system will need to integrate all its critical solutions and deliver them to all stakeholders in an easy to use and comprehensive format. This will also include mobile apps that can be accessed by logistics managers wherever they may be.
Security and Scalability
As more business operations are being digitized and/or are being moved to the cloud, the need for data security has never been higher. To that end, a top transportation management software will need to provide enhanced security features capable of keeping all of your sensitive information safe from malware, cyberattacks, or security breaches. This is particularly true if the TMS system will have users accessing it from remote locations.
The system should be able to scale up or down, based on your supply chain management software. Aside from managing the usual workload, it should also be able to take on periods of peak demand without incurring delays or other similar issues.
There are many TMS vendors out there who provide varying degrees of support. No matter how proficient or comprehensive the platform is, if it’s not backed up by an experienced team of trained professionals capable of fixing issues immediately, you may be in for a rough ride.
Likewise, every software, regardless of how intuitive or easy-to-use it is, still requires a learning curve. This means that technical support is almost a requirement – not an additional service. Some TMS vendors may even offer employee training and onboarding sessions, which will make the transition to the new system that much easier.
Lastly, your transportation management software needs to provide a high level of reliability. The more dependable the system, the less likely you are to encounter failures or difficulties down the line. No TMS vendor can guarantee that their software will work perfectly 100% of the time, as occasional crashes or system bugs are inherent to software in general. A good indicator in this regard is whether the provider is actively looking to improve their TMS system. This can be measured by how regularly they are patching and offering updates.
Today’s transportation management systems act more like a control tower that encompasses and oversees all supply chain activities of a company and its partners. By optimizing its logistics and supply chain operations, businesses can gain a competitive advantage, saving time, and reducing costs in the process. The adoption of an advanced TMS will not only help you navigate today’s highly volatile business and trading environment but also thrive in it.
You should, however, keep in mind that when you choose a modern TMS solution, you are also getting a valuable partner that will be with you over the long-term. To that end, Logistics Titans is at your service.
Our TMS system is a comprehensive logistics intelligence system, specially built to save time and help companies scale the growth of their transportation operations. Our TMS system is a multi-modal platform that provides full-scale automation across the entire shipment lifecycle. As an app-based system, it requires no hardware installation, can be used to track and trace shipments, providing on-demand, real-time visibility. Drivers will also be able to capture the proof of delivery and send, directly from the app.
By making use of direct integrations with all major carriers and load boards, the platform also allows its users to go from quote to delivery without the need for any manual intervention. With its unique rating capability that can pool all the shipping prices across the US, you will have access to the most competitive rates in a single, user-friendly portal. In short, our TMS solution will not only provide you with all the features and benefits that you need, but it’s also free of charge.
Contact us today for more information!