What is Transportation Management Software?
Transportation management solutions (or TMS) help users plan and execute deliveries across the supply chain. Efficient deliveries depend on informed route planning, freight consolidation, and enhanced visibility. By providing managers with appropriate tools like route optimization, load building, and track and trace, the right TMS can improve fleet performance and reduce supply chain expenditures. Along with warehouse management solutions and truck routing solutions, TMS solutions constitute the logistics side of an overall supply chain management system.
TMS Features & Functionality
Transportation systems offer a number of important tools to maximize efficiency and reduce costs associated with product shipping and logistics. Some of these features include strategic freight sourcing tools, multi-modal planning functionality, route optimization, freight consolidation, and dock scheduling.
These features provide the following functionality:
|Automated carrier selection||A TMS improves the carrier procurement process by determining the smartest carrier and mode options for each delivery.|
|Shipment consolidation||Consolidating shipments is the single fastest way to cut shipping costs. A TMS will assess all scheduled shipments and arrange them in efficient bundles, maximizing their load consolidation with each delivery.|
|Route optimization||A TMS uses maps, road speeds, traffic data, fuel costs, and modal limitations to determine the most efficient route to save time and gas.|
|Freight estimate optimization||Whether you’re submitting bids or simply calculating shipping costs, a TMS will calculate the cost of delivery based on cargo weight, mode of shipping, delivery distance, and other variables, and provide comprehensive reports and needs analyses to facilitate more cost-efficient choices.|
|Payments||These systems include accounting functionality that helps users reconcile invoices with shipments, audit freight bills, reduce payment errors, and establish tolerances for match-pay settlements.|
Evaluating Transportation Management Systems
Demand for high-quality transportion software systems has gone up as organizations realize their cost-saving potential. But their historical lack of use means there’s no one truly dominant leader in the small and mid-size business markets.
Important considerations when selecting a TMS program include:
- Is your organization interested in an on-premise or SaaS deployment?
- Is your organization a small to midsized business? If so, does the vendor have an established reputation for serving the needs of business of this size?
- Does the system support all modes of shipping within your operation?
- Can the system offer specialized functionality to meet the unique delivery needs of your vertical market?
- Does your organization engage in global trade? Not all TMS systems include functionality for international logistics.
Recent Trends in Transportation Supply Chain Management
As fuel prices continue to rise, logistics operations and trucking fleets are always looking for ways to streamline their operations and increase productivity. In response, vendors have made a number of updates to improve their functionality. Here are some of the biggest updates from three leading TMS logistics firms:
- RoadNet Technologies. RoadNet is one of the premier vendors of trucking logistics software, and they were rewarded by being included in Food Logistics Magazine’s Top 100 providers list. In January 2012, RoadNet updated its transportation management system software to version 3.50, focusing the upgrades on service maintenance, delivery cost reporting and additional new features. One interesting new feature is the ability to address products that were overlooked during delivery and issue a redeliver request to the driver.
- TMW Systems. In May 2011, TMW Systems acquired Appian, integrating the firm’s transportation management solutions for 3PLs into TMW’s own transportation logistics software solutions. Another new application offered within the TMW Systems suite is its new DriverManagement application. This solution automates the recruitment, hiring and onboarding of drivers. Announced in September 2011, the web-based application is designed to integrate with existing TMW transport management systems.
- Precision. Precision TMS underwent a couple of major updates in the past year, including an upgrade to the web-based user interface of its TMS solutions. Version 4.3 (from April, 2011) saw improvements to the system’s workflow and added Automated Export System (AES) functionality and custom reporting. Service-pack update S33 added direct integration with SMC3 for improved tariff estimates for freight shipments, additional language support, and additional support for new USPS postage statements.