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by Daniel Harris,
Market Research Associate
Last Updated: July 22, 2016

Here's what we'll cover:

What Is Transportation Management Software?
Common Features of TMS Systems
Evaluating TMS Systems

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 warehousing solutions and fleet management systems, TMS solutions constitute the logistics side of an overall supply chain management system.

Common Features of TMS Systems

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. In addition to TMS solutions, fleet management software also commonly includes route optimization functionality.
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 TMS 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 mid-sized 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.

Free Download:
Ten Steps Guide to Selecting the Right SCM Software

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