Managing freight movement across complex supply chains presents significant challenges for shippers—from rising costs to inefficient routing and lack of visibility. When you're shipping products regularly, how do you ensure you're getting the best rates, optimizing routes, and maintaining control over your deliveries? One of the latest trends helping you address these challenges is the introduction of Transportation Management Systems (TMS). A TMS is a sub-software solution of supply chain management systems. It has a direct focus on shipment planning, optimization, and execution. It permits you to communicate with potential carriers and streamline the process of moving freight.
Like any other software solution, the modern TMS is extremely robust – with capabilities ranging from route planning and scheduling to freight management, carrier management, and load building tools. In this blog post, we'll break down what a TMS is, how it benefits shippers, and why leading companies from retailers to manufacturers are integrating TMS solutions into their daily operations.
What is a TMS?
Contrary to popular belief, a TMS is not simply used by shippers. This robust platform is beneficial for both shippers and service providers within the supply chain. This includes:
- Distributors
- Manufacturers
- e-Commerce companies
- Retailers
- Wholesalers
- Third-party logistics companies (3PLs)
It started as a logistics management system that permitted shippers to connect with a group of carriers, receive freight rate estimations, and schedule their freight movement.
Most TMS solutions are cloud-based, meaning that all data is stored on a secure server that can be accessed from any location with an internet connection. Many of the newest TMS programs are designed for users to access them through mobile devices; with dashboards customized per the individual preferences of the user. Furthermore, they are also extremely scalable.
Best of all, you can set up a TMS for minor route planning tasks or complete transportation management functions.
How is a TMS Beneficial to Shippers?
There is no way to spin this – integrating a TMS is an investment in your business. While some shippers believe that they are expensive or time-consuming to learn, the truth is that TMS solutions have never been easier to use or as affordable—and maximizing your return on investment on investment is more achievable than ever. When you invest in a robust transportation management system there are several benefits.
Simplifies Transportation Execution and Planning
The TMS system is a platform that acts as a host of other sub-systems. The modern TMS can host:
- Customer relationship management
- Supplier relationship management systems
- Route planning
- Rating
- Tracking
This puts the power of complete shipping operations in the palm of your hand.
More Control of Inventory Management and Freight Delivery Communication
A TMS system also permits shippers more flexibility to monitor and track the lifecycle of the movement of freight. Additionally, it can track the freight through each stage:
- Picking
- Packaging
- Pick-up
- Each movement or scan
- Delivery
Plus, you can set up communication preferences, allowing you to send updates to customers on the expected delivery of their orders. If a delay happens, the TMS sends an email, SMS/text, or mobile app push notifications. As a result, the customer can plan their day accordingly, so they don't miss a delivery.
Reduced Errors on Invoicing
One of the best features of a TMS system is freight bill auditing. This permits you to review your invoices and compare them against negotiated rates, such as:
- Fuel surcharges
- Weight billing
- And more
It also allows you to check individual sections of bills of lading and other freight invoices for clerical mistakes. As with any other Software as a Solutions (SaaS) – the modern TMS can be set up and expanded to benefit each individual user. A great resource for helping you set up a TMS is a logistics partner like Redwood, whose Modern 4PL approach combines technology expertise with deep supply chain knowledge. Redwood and other leading 3PLs have been using and creating TMS solutions since their inception. They understand all of the nuances, bells and whistles, along with the unique features and benefits they offer users.
Final Thoughts
A TMS is a powerful tool that can transform how your business manages freight movement, from simplifying planning to reducing invoicing errors. Whether you're a retailer, manufacturer, or distributor, investing in the right TMS solution can deliver measurable improvements to your supply chain operations.