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What Is a Transportation Management System?

With recent shipping delays and problems arising within supply chains, the shipping industry can benefit from every advantage possible to ensure smooth operation. A transportation management system (TMS) streamlines the shipping process by offering automation options and innovative solutions for supply-chain management. 

Why is it important to have a transportation management system? In this article, we’ll explore the role and function of a transportation management system, as well as the benefits it can offer your business.

How Does a Transportation Management System Work?

What is a transportation management system? A transportation management system (TMS) consists of logistics software designed to optimize your route planning and inventory management. 

TMS offers cloud-based systems as well as on-site systems. A TMS can provide you with a broader view of how well your company is performing, but it can also provide precise, up-to-the-minute data at every step along the way. 

A TMS can provide a detailed analysis of your shipping processes. It can be used to plan shipping routes and provide tracking information which can then be analyzed and used as a tool to optimize your supply chain performance.

If you’re thinking about implementing a transportation management system, you might want to consider some of the following points.

Why is a Transportation Management System Important?

A TMS can improve the accuracy of your shipping process and streamline your supply chain by offering real-time tracking, accurate data, and information about every order. 

In a day and age where eCommerce is on the rise, a TMS can give your business a competitive edge.

Who Uses Transportation Management Systems?

What is a transportation management system best suited for? Any industry that relies on a supply chain could benefit from TMS, but the following entities may gain the greatest number of benefits from a transportation management system:

  • Large-scale manufacturers
  • Medical equipment distributors
  • Ecommerce businesses
  • Online and in-person retailers
  • Logistics companies

A TMS can help you keep track of your outgoing shipments and manage inventory. This is important for all companies but especially those that rely on incoming shipments to keep their warehouses and shelves stocked.

How Will a Transportation Management System Reduce Costs?

Optimizing your routes can cut down on the cost of fuel and other kinds of overhead for your business. But a TMS can also minimize administrative burdens, reducing your dependence on support staff.

How Long Does a Transportation Management System Implementation Take?

Implementing a transportation management system takes time, and there’s no real one-size-fits-all solution. Small businesses may be able to integrate a TMS quickly and easily, but businesses with larger fleets may have to take a little longer to integrate the system and bring everyone up to speed. 

In the long run, a TMS will save time because it optimizes your supply chain, which results in fewer headaches down the line.

Why Should You Invest in a Transportation Management System?

If your business relies on shipping and receiving items in any capacity, you should consider the benefits of a transportation management system. Your initial investment will pay major dividends by streamlining your entire supply chain process. 

Transportation Management System Benefits

A transportation management system can optimize every facet of your supply chain by allowing you to do the following things.

Analyze Route Logistics to Reduce Costs

Optimizing your shipping routes will ensure that your drivers are taking the best and safest routes possible. In turn, this will cut down on work hours, fuel, and other transportation costs.

Reduce Administration Expenses

A TMS will drastically reduce paperwork, thanks to the way the information is stored in a cloud-based system. This will also cut down on invoice errors and save you money that you would otherwise spend on administrative expenses.

Error-Free Billing

Relying on a TMS can drastically minimize the margin for error. This means that you have a higher likelihood of consistent accuracy throughout your entire supply chain, including error-free billing.

Real-Time Management

A TMS provides real-time updates and data that will increase productivity. A TMS can also forecast inventory needs and predict regular expenses.

Automate Business Operations

Most of your business operations can now be automated, which means that you can rely on greater accuracy, thorough documentation, and information at a glance when you implement a TMS.  

Driver Tracking

Tracking your drivers’ routes will help you optimize your transportation system. A TMS can help you to plan faster, safer routes that will minimize the overall number of hours your employees spend driving. This will also reduce fuel costs.

Improved Security

A cloud-based TMS will give you improved security because your data will be stored in the cloud rather than on loose files or a single, local server that will be vulnerable to viruses and malware.

Disadvantages of a Transportation Management System

There are some disadvantages of using a transportation management system. Even though a cloud-based service can be helpful, they cannot guarantee that a cyberattack will never happen.  

Additionally, a TMS takes time to fully implement. It may require training for your current personnel. Change is always difficult, so the full benefits of a TMS may take time to show themselves.

How Much Does a Transportation Management System Cost?

Transportation management systems vary in price as the costs are based on the size of your company and the number of vehicles you have on the road at a given time. In most cases, you will need to purchase TMS hardware, but you might also be required to pay a monthly fee for the service. 

For example, Samsara offers a package that starts at $100 for the hardware. In addition, there’s a monthly charge of $30 for each vehicle in your fleet.

What is the Basic Role of a TMS?

At a minimum, a TMS will provide you with data. The EZTransport TMS can integrate your supply chain elements through apps and simple, instant reporting. This data can then be used to optimize every component of your supply chain, from route planning to warehouse management.

Will My Cloud-Based TMS Automatically Update?

While every TMS platform offers slightly different features, today’s logistics software features automatic updates as long as you remain connected to the network.

Stay Ahead of the Curve with FreightWaves

In an increasingly globalized economy, keeping track of shipments and inventory is crucial for every business. A transportation management system is therefore indispensable. 

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