Full Guide: What is a Transportation Management System (TMS)
While transportation companies try to move more and more goods from point A to point B, they face a number of challenges, like increasing commuting times and escalating freight costs, not to mention the usual staffing issues and associated driver shortages. So as transportation costs and demands rise—and technology solutions steadily evolve—more and more companies are looking to a transportation management system (TMS) to find efficiencies and savings, and end up seeing very promising results.
Trucking businesses use these solutions to manage their trucks and trailers, and those who drive them. Freight brokers use them to oversee their partner network, while carriers use them to watch over their fleets. Whatever your business is, a reliable TMS helps you to increase your operational efficiency and insights, through the effective tracking and reporting of your transportation data. In other words, it has the potential to push management time way down and profits way up.
To help you successfully navigate the transportation software market and determine what kind of system is right for your organization, we created the following guide to a TMS. Here’s everything you need to know:
What is a TMS?
A transportation management system (TMS) is a software application designed to help businesses manage their transportation operations. It is a logistics software that can be used by shippers, carriers, and logistics service providers to plan, execute and optimize their transportation operations. A TMS goes a long way in streamlining shipping operations by automating tasks, like route planning, load management and finances, and supporting real-time, data-driven decisions to do with the business.
More specifically, a transportation management platform takes into account various factors, like shipping distances and delivery times, traffic and weather conditions all to create the best possible routes and schedules. It sends out alerts about potential delays or issues and it provides detailed analytics around transportation data and identifies important trends. This all translates to both increased productivity and cost savings for businesses, while also offering shorter and more reliable delivery times for customers.
Who uses a TMS?
TMS software is used by a wide range of businesses, including shippers, carriers, and logistics service providers. Shippers use TMS software to manage their transportation operations, while carriers use it to manage their fleet and drivers. Logistics service providers also use TMS software to manage their customers' transportation operations. All in all, both small and large companies in the transportation industry are using a TMS to streamline their transportation operations, boost delivery efficiency and effectiveness, and improve overall customer satisfaction.
The key features of a TMS
For starters, a TMS supports critical operations by monitoring driver logs, scheduling shipments and keeping other records. It identifies the most efficient routes for drivers and provides updates on drivers’ physical locations. When it comes to asset management, transportation management software helps you to watch over the vehicles, parts and tools in your operation. For fleet maintenance, it helps you to track and schedule repairs for your company’s entire fleet, and notify departments of upcoming truck servicing.
What’s more, trucking TMS software has you covered with load optimization, too, helping you to figure out the most practical ways to store cargo. And as a bonus, TMS software typically comes with an accounting feature to help you process invoices and receipts, track expenses and produce IFTA reports.
Pros and cons of a TMS
Imagine a single source of truth for your transportation company to stay on top of your business, rather than a daunting stack of spreadsheets or loose papers floating around the office. TMS logistics software means no more paperwork and no need for several technology programs. With a TMS, all of your transportation data can be found in one place. This makes it easier to keep tabs on your shipments at every stage of the shipping process, not to mention checking in on shipment weights. Picture fully automated transportation management and communications, too. This way, you can not only streamline your day-to-day operations, but also easily update shipment information and quickly notify everyone involved in the process.
However, it’s important to note that there are some potential drawbacks of a TMS. Especially if you don’t have the right partner – adopting and implementing a TMS can be rather costly, especially if you’re a smaller business with a limited technology budget. But the biggest hurdle for companies looking to implement a TMS is actually change management and user adoption. If your company’s employees are used to manual transportation management processes, they may not fully grasp and embrace a TMS from the very beginning, which puts a large obligation on team leaders to help with this transition. The good news is that companies like Rose Rocket offer a full learning library available free of charge, in addition to comprehensive customer support from an account manager from day one. Options like this help to ease the transition and set your company up for success with a TMS implementation.
The past and future of TMS software
TMS software has come a long way since its inception in the 1980s. In the past, TMS software was primarily used by large enterprises with complex transportation operations and had to be on-premise, meaning the installation of costly servers and equipment in your company office. Today, TMS software is used by businesses of all sizes, thanks to advancements in technology and cloud-based solutions. Cloud-base TMS softwares (like Rose Rocket) means not only can you can get started with using your TMS in your business in a matter of minutes, but it’s portable to work from anywhere – so whether you work in office or from home, you can have access no matter where you go.
In the future, TMS software is expected to become even more advanced, with a greater emphasis on automation, artificial intelligence, and machine learning. These advancements will enable businesses to further optimize their transportation operations and improve their bottom line.
Bottom line: A TMS can take your business to the next level
At the end of the day, the latest transport management systems are bringing the transportation industry to the next level—from companies managing third-party drivers to those overseeing their own fleet. These solutions are evolving the way that businesses—old and new,—capture and share crucial business information, and communicate with their drivers and customers. Moreover, it’s creating higher efficiencies within transportation businesses allowing businesses to reap the rewards in both business growth, cost savings and employee satisfaction.
If you’re still curious about what a TMS system can do for you, book a demo with one of our Rose Rocket logistics experts – as the #1 Rated TMS, we’d be happy to help guide you through this process.