What is a Transportation Management System? How Does it Work?

Shippers, carriers, 3PLs and others are always looking for ways to improve efficiency in logistics. A growing solution is the transportation management system, or TMS.  

A TMS is usually cloud-based and designed to make the shipping process easier from start to finish. These platforms automate supply chain tasks, deliver insights and reporting, and help logistics teams save time, reduce costs, and plan smarter for the future. Redwood’s approach to modernizing Oracle Transportation Management (OTM) is one example of how a TMS can create real-world value for complex supply chain networks.  

Who Is Using Transportation Management Systems?

One of the biggest strengths of a TMS is its flexibility. If you are part of the supply chain in any way, you can benefit from it. E-commerce companies, distribution centers, shippers, carriers, and anyone moving freight on a regular basis can take advantage of a TMS. 

These systems help manage transportation in four main areas: 

• Planning and decision making: Finding the most efficient transportation options based on your unique needs. 
• Transportation execution: Dispatching carriers, accepting rates, and tendering loads. 
• Freight tracking: Gaining visibility into shipments at multiple touchpoints along their journey. 
• Reporting: Building flexible reports to fine-tune supply chain performance. 

What Are the Benefits of TMS?

The benefits of a TMS far outweigh the learning curve. Here are some of the key advantages: 

• Stronger technology: Route freight based on cost and transit time while using a wide mix of carriers. A TMS centralizes planning, execution, and tracking in one place. 
• Simplified processes: Match shipments with the right carrier and build shipment profiles for quicker routing in the future. 
• Freight visibility: Get real-time alerts when issues arise so you can update customers and manage expectations. 
• Actionable insights: Create custom reports, invoices, and analytics that make it easier to identify opportunities for improvement. 

If you want to learn more, here are the top five TMS benefits your solution should provide. 

What Challenges Does a Transportation Management System Help Solve? 

Every day, logistics teams face challenges that can slow down operations and frustrate customers. A TMS helps solve some of the most common hurdles: 

• Staying organized: Bring carrier pricing, quotes, and shipment data together in one place instead of juggling multiple systems. 
• Choosing the right carrier: Match shipments with the best carrier for the job, whether it requires speed, special handling, or cost savings.
• Clear communication: Share real-time shipment updates through email, text, or desktop notifications to keep everyone in the loop. 

The Future of Supply Chain Efficiency 

Transportation Management Systems are quickly becoming a cornerstone of the modern supply chain. They can be scaled, customized, and tailored to the unique needs of your business and your customers. With the right guidance, you can implement a TMS that improves efficiency and drives results across your logistics network. 

Want to see how a TMS could transform your operations? Contact Redwood to explore the right solution for your business.