What Is a TMS System? Key Benefits for LTL Shipping

Routing and planning Less than truckload or LTL shipping is a daily struggle for several shippers. Companies focusing on manufacturing, distribution, or retail operations typically utilize LTL carriers to move partial or multiple shipments of pallets to multiple customers in several geographic regions. While some shippers have created fairly efficient methods of routing, planning, rating, and hiring carriers with the assistance of their employees, many have taken a technological approach by depending on a TMS system to accomplish this task.

Whether you're an LTL shipping novice or a seasoned professional looking to improve the efficiency of your LTL operations, a transportation management software system can significantly help. In this blog we'll introduce you to TMS systems, what they are, how they work, and the key benefits of using a TMS system.

Explaining the Ins and Outs of a TMS System

The TMS system is a cloud-based Software as a Service (SaaS) that help shippers and leading LTL carriers to connect. The system itself is scalable and can be configured with tools that help a shipper receive shipping estimates, find qualified carriers, improve route optimization, and even connect with customers or audit freight invoices. While the systems are customized for each industry, there are several key reasons why shippers rely on TMS solutions to power their daily operations.

Let's explore the key benefits of using a TMS system for shippers...

They're 100% Scalable

Flexibility is the name of the game in logistics. For those integrating new programs into their route planning operations, the freedom to expand the platform is crucial. In fact, it's a necessity.

A TMS system offers several key capabilities:

• Automatic data collection and organization

• Customizable dashboard to fit user needs and preferences

• Easy expansion as shippers become more comfortable with the system

It Improves LTL Costs

Shippers depend on TMS systems to find the most reputable, affordable carriers. However, some carriers are simply better than others – and in some cases, can save you money that goes beyond the simple cost of movement. For example, you hire carrier "A" to move three pallets to customer "A" with a flat rate of $500. Carrier "A" attempts to deliver the shipment but is unable due to being late to the shippers receiving hours.

In the end, the shipment arrives two days after scheduled. Bit, of course, you receive a final invoice of $750 with an extra $250 delivery surcharge for a reattempt.

Now, let's say you hire carrier "B" with a flat rate of $600 who delivers on time. While the initial cost is slightly higher, you save $150 on the total cost. Furthermore, you have a happier customer who is more likely to purchase your products in the future. A robust TMS allows shippers to find carriers that can transport shipments that require special handling. Once the right LTL carrier is found, the TMS permits the shipment to be tracked, with instant notifications being sent to all parties within the movement of that freight.

Want to see real-world examples of how companies have improved their shipping costs and efficiency? Explore our case studies to learn more.

You Can't Put a Value on Delivering Superior Customer Service

The quick and accurate flow of information is an important customer service attribute. Whether it's receiving updates on an overnight shipment or delay notifications, consumer depend on effective communication to plan their days.

A TMS platform can be configured with consumer-friendly communication tools, including:

• SMS alerts

• Emails

• Direct desktop notifications

Furthermore, many of them also permit recipients to confirm and reply to these automated messages.

Frequently Asked Questions

What is a TMS system?

A TMS (Transportation Management System) is a cloud-based Software as a Service (SaaS) platform that helps shippers and LTL carriers connect. It provides tools for shipping estimates, carrier selection, route optimization, customer communication, and freight invoice auditing.

How does a TMS improve shipping costs?

A TMS helps you identify the most reputable and cost-effective carriers for your shipments. Beyond just comparing rates, it helps you evaluate carrier performance to avoid hidden costs like redelivery fees and surcharges that can result from poor service.

Can a TMS system scale with my business?

Yes, TMS systems are designed to be 100% scalable. They feature customizable dashboards and can be easily expanded as your shipping needs grow and you become more comfortable with the platform.

What kind of customer communication features does a TMS offer?

Modern TMS platforms include consumer-friendly communication tools such as SMS alerts, email notifications, and direct desktop notifications. Many systems also allow recipients to confirm and reply to automated messages.

Final Thoughts

Regardless of the type of business you have, the benefits of using a TMS system don't change much!

If you have questions about setting up a customized TMS solution for your supply chain related business, contact Redwood to learn how their Modern 4PL approach can help your company integrate this affordable platform into your daily logistics operations.