Picking the right transportation management system (TMS) is a crucial decision that can make or break a trucking company’s efficiency. With many software options on the market, knowing the key questions to ask TMS vendors is vital to finding the best fit.
This article outlines the most critical questions trucking companies should ask potential partners before investing in TMS trucking software to maximize value and ROI. And when you’re finished reading, check out the other articles in our ‘Choosing a TMS’ series:
- How logistics management software can help grow your business
- Questions to ask TMS trucking software providers before buying
- Top TMS solutions for 2024
What is TMS in logistics?
TMS stands for transportation management system. It is a software platform used by companies to plan, execute, and optimize the shipment of goods in their supply chain and logistics operations.
Some key things to know about TMS trucking software:
- It helps manage both inbound and outbound shipments via all modes of transport, including truck, rail, air, parcel, ocean, etc.
- Key capabilities include load planning and optimization, routing and scheduling, freight cost management, shipping process automation, payment management, visibility and tracking, analytics and reporting, etc.
- TMS systems help optimize logistics networks by consolidating and automating planning and execution across transportation partners, customers, and internal teams.
- It enables collaboration and information sharing between shippers, carriers, customs brokers, warehouse staff, customers, etc.
- Transport management systems can be either on-premise software installed at a company’s site or cloud-based and offered as a web service.
- Implementing a TMS transportation platform helps reduce freight spend, improve shipment efficiency, boost productivity, enhance customer service and satisfaction.
All in all, a freight TMS is an essential technology solution to plan, optimize, execute, track and analyze a company’s logistics operations across all transportation modes. It provides visibility and control over the supply chain by connecting transport buyers and providers.
TMS features
The features and resulting benefits of a TMS for trucking are manifold. The best TMS supply chain platforms typically offer the following capabilities.
- Load planning and optimization: Tools for planning shipment routes, volumes and carriers to meet delivery requirements at lowest cost. Logistics and transport management Involves load consolidation, network modeling, procurement automation, etc.
- Execution management: Workflow automation for booking, tendering, tracking shipments across carriers. Includes carrier assignment, dispatch, appointment scheduling, event notifications etc.
- Freight procurement: Electronic bid and tendering process to request rates and select carriers based on market conditions and carrier capabilities. The best transportation management systems include RFP creation and bid analysis tools.
- Rating and billing: Automates freight bill audit, payment and settlement with carriers and vendors. TMS platforms ensure invoices and rates match contracted tariffs.
- Visibility and tracking: Real-time tracking of shipments, with milestone updates on estimated time of arrival, delays, proof of delivery, and more. A TMS software logistics solution is useful for monitoring status and sharing with stakeholders.
- Performance management: Reporting on transportation KPIs across cost, service quality, utilization etc. Enables data-driven assessment of opportunities. The best TMS systems connect operational metrics with financial outcomes.
- Global trade compliance: Management of global trade and customs documentation such as Customs declarations, invoices, packing lists required for international shipping.
- Analytics and data management: TMS companies offer insights from embedded analytics around carrier scorecards, shipping trends, and costs. Tools for managing transportation data, integrating with other systems.
- System integration and APIs: Integration layer APIs connect top transportation management systems with other logistics platforms, like WMS, order management, etc., to exchange data. A TMS integration enables end-to-end visibility.
The core focus of transport management services is using data and connectivity to optimize planning while automating shipping process workflows involving multiple parties.
What to ask transportation management companies to make a TMS selection
Want to make sure you’re investing in the best transport management system for your company’s needs? Here is a comprehensive list of key questions that will help you with a TMS evaluation.
Functionality specific to trucking ops
- Does the TMS support planning and execution for truckload, LTL and intermodal shipments? Can it combine across modes?
- How does it optimize truck routing, driver assignments, load consolidation etc?
- Does the automated load matching meet our backhaul and spot market needs?
- Can we handle centralized dispatch workflows with our carriers?
- Does it support settlement of driver payroll, payments, accruals?
Carrier and driver collaboration tools
- What self-service portal or apps exist for my carrier partners?
- How can the TMS integrate with onboard telematics and sensors?
- Is there support for electronic proof of deliveries and appointment scheduling?
- What features enable email/text notifications and automated status updates?
Analytics for trucking KPIs
- What embedded analytics are available specifically for trucking? (Cost per mile, empty miles, etc.)
- How well can it analyze service metrics like on-time pickup/delivery?
- Can I get custom reporting around fleet maintenance, compliance, safety KPIs?
- What benchmarking and peer comparison data is available?
EDI and integration considerations
- Which EDI transactions related to trucking freight are supported? (204, 214, 404, etc.)
- Is there a template library I can leverage for rapid onboarding?
- How open and well documented are the APIs for custom integrations?
- What other software vendors do you have connections with?
Managing trucking compliance
- Can the TMS help track and alert around HOS limits, license statuses?
- Does it help digitize paperwork around permits, insurance certificates?
- How are IFTA reporting and compliance workflows supported?
Vendor experience serving trucking fleets
- Do you have experience successfully deploying for private, for-hire, or brokerage fleets?
- Can you provide customer references from the trucking industry?
- How long have you been providing TMS solutions to the trucking industry?
Pricing and implementation details
- What implementation services are included? What is the typical timeline?
- Are there packaged configurations specific to various areas (intermodal, brokerage, etc.)?
- Does carrier management software licensing or pricing differ for users that are strictly brokers vs asset owners?
- What level of post implementation training and support is included?
By having detailed conversations with TMS vendor teams leveraging questions like these, you can accurately determine the best transportation management software for your operational management and shipping needs.
Take the next steps to benefit from TMS optimization
Now that you know how to choose the right TMS, it’s time to narrow a list of potential partners based on how well they fit your top criteria. After arranging platform demos that should answer the questions outlined above, you should speak to client references, ask for recommendations, and seek out client reviews. Doing your due diligence before making a final decision will help ensure that you find the ideal technology partner to meet your unique requirements.
FAQ
A TMS is worth it for trucking companies because it centralizes load planning, dispatch, tracking and compliance data to help boost utilization, optimize routes and improve backhaul management. The systematization and automation generates significant operational efficiencies and cost savings that exceed software investment.
Shippers need a transportation management system to consolidate operational data across cargo types and carriers onto a single platform. This helps them identify and act on opportunities to reduce freight spend and improve customer service, using insights that would not be possible in spreadsheets or manual processes.
The main disadvantage of a transportation management system is the need for customization and integration work to align with complex logistics operations.
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