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What is Transportation Management Software? (TMS)

What is Transportation Management Software? (TMS)

An Introduction to Transport Management Software

Transportation management software (TMS) is a suite of integrated tools used to manage, track, and optimise the flow of goods. Its software helps businesses ship, move and manage their inventory by organising, optimising & monitoring shipments and deliveries.



What is TMS?

Transportation Management Software (TMS) is a software solution that helps you manage your transportation needs.

TMS can help you optimise your transportation process, decrease costs, improve the customer experience, and manage freight bills. There are many benefits to implementing a TMS solution into your business operations. If you want to learn more about the benefits of having TMS in your business, or if you want to find out if it’s the right choice for your company, then keep reading this guide!

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What is TMS used for?

Transportation Management Software (TMS) is an enterprise-wide system used to streamline and manage the movements of cargo, people, information, and money. TMS software automates the planning, scheduling and execution of inbound and outbound deliveries.


Cargo warehouse managed by a TMS system


Benefits of Transportation Management Software

  • Transportation Management Software (TMS) provides an integrated system to manage the flow of goods and services around the world. It helps companies streamline their transportation operations, increase efficiency and reduce costs.
  • Improved freight audit: A TMS can provide better visibility into shipments as well as transactions throughout the supply chain. This allows you to have a clearer understanding of your current processes, identify areas for improvement, and make adjustments before they become a problem.
  • Improved freight billing: With a TMS, you receive accurate bills from carriers based on actual miles travelled rather than estimated distances between stops or locations on a route sheet; which means that you know exactly how much it costs per mile to transport freight through your company’s network each month—helping minimise overpayments while reducing underpayments (and thus increasing cash flow).
  • A Transportation Management System can quickly and easily supply the cost for a delivery, at the time an item is being purchased, enabling a true and accurate cost of that delivery to be presented to the customer at the point of sale.


Features & Capabilities of TMS

After understanding what TMS is, it’s time to learn about its features and capabilities of TMS. When you use transportation management software, you can manage a variety of functions including:

Freight Management

This feature helps you create new shipments and pick up orders for your organisation or from your customers.

You can track all the information related to your shipments through this function. It also allows you to monitor their exact location every step of the way until they reach their final destination, which means that there will be no chances of delays or losses in transit due to poor visibility into where exactly each shipment is at any given time.

Freight Auditing

This feature allows businesses in various industries such as manufacturing companies or retail stores that need goods delivered for their operations so that they have an easier time managing these shipments efficiently through a centralised system where all transactions are logged automatically after being recorded by both parties involved (e-commerce merchants selling goods online).


An important area where you can use a TMS to assess whether to go for a fully loaded truck or whether it is better to ship anyway, how many shipments go into a container, should you ship in a container or otherwise in a smaller shipment, how to handle dangerous goods, assess which mode of transport and carrier is best with regard to costs, delivery times and more.

This means pre-planning brings great benefits and significant cost savings.

Pre-billing or self-billing

A solution to stop the continuous flow of freight invoices that are almost impossible to check.

Sending out pre-billing statements to your carriers takes away the burden of having to check the invoices. Freight charges are calculated for every shipment at booking time. You create a pre-billing statement periodically (every week, fortnight or month) for each carrier with all the shipments that meet the criteria including all the freight charges and surcharges. The creation and sending of these statements to the carriers can also be fully automated and ensures that the invoiced amounts match the agreed freight rates. The procure to pay process can be automated to a large extent saving you even more time or can be manually controlled if you prefer.

Yard Management

This module allows you to plan and record all trailer moves, inspections and security seal changes, as well as maintaining an audit trail, helping to prevent loss of goods.

Trailers and their contents can also be tracked across multiple locations giving visibility of stock in transit or waiting to be unloaded.

Dock Appointment Scheduling

This is a special module that provides increased control and management of goods-in, enabling the smoothing out of deliveries and the warehouse workload associated with each delivery.

The module enables suppliers to book their own delivery slots and allocated docking bay doors to each delivery based on the preset parameters set by the receiving company.

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Types of TMS

TMS software can be broken down into two categories: cloud-based or on-premise. Cloud-based TMS is often lower cost, more flexible, and easier to use than on-premise solutions.

However, it requires a reliable internet connection in order to work—and if you are travelling without a data plan while abroad or in remote areas of the world where 4G / 5G mobile service is spotty at best (or nonexistent), then you may have trouble accessing your system. On the other hand, on-premise solutions tend to cost more than cloud services, but offer additional features like access via mobile devices or desktop computers.


Delivery driver using a TMS system


10 Reasons You Should Invest in TMS Software

Here are 10 reasons you should invest in transportation management software (TMS):

1. All things are in one location

Businesses may control all aspects of their transportation operations from one location by employing a TMS.

This means that regardless of whether an order is a full truckload, LTL, parcel, air, intermodal, or ocean shipment, they can rate, book, track, and communicate with it. Additionally, it implies that they do not have to switch between various carrier websites in order to rate shops.

2. Fewer manual entries

Manual entries are significantly decreased with a TMS, particularly one that is coupled with an ERP or ordering system.

To eliminate human error, information like PO numbers, pallet weights, and destinations can be completed automatically. Additionally, since all the order and route information is in one location rather than being kept in many spreadsheets or sticky notes, reliable information can be shared amongst stakeholders.

3. Lower shipping costs

Systems for managing transportation virtually always assist businesses in reducing their overall freight expenses.

Logistics professionals can select the least expensive choice for the service type they require by being able to compare prices on a single screen. Additionally, businesses have easy access to more carriers and expanding the available options.

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4. Obtain insightful analytics

The TMS will process all of a company's logistical data, allowing for the creation of reports and dashboards with useful information.

Companies can use the TMS to make strategic decisions that affect their bottom line by seeing freight cost per item all the way down to the SKU level. They can also view information like vendor scorecards, real-time tracking data, and carrier KPIs. Logistics experts may keep track of the important parameters affecting their revenue with the aid of these reports and dashboards.

5. Simplifies paperwork

The minimal documentation that is still required is made significantly simpler by transportation management systems.

BOLs, PODs, and other documents may be printed straight from the system, making processing quick, effective, and most importantly, always accurate. When drivers have proper information on hand, this not only adds time back into the day but also shortens the pickup/drop-off times.

6. Meet escalating client demands

As eCommerce becomes more popular, customers' expectations are shifting and supply chains are having a harder time transporting goods.

Orders need to be delivered to their destinations faster, cost effectively, and transparently. All three of these things are made possible by a TMS, enabling businesses to fulfil rising customer demands and customer service expectations.

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7. Scalability

With a TMS, a firm can expand or evolve without being constrained by how it will manage its transportation operations.

The TMS will scale seamlessly with the business if new facilities or more items are introduced. TMSs with modular features give businesses more customisation options. For instance, if the business starts selling things online, they might add an eCommerce integration to enhance their clients' delivery options.

8. Improve load consolidation and routing optimisation

With many TMS systems, you can use an optimiser engine to create loads and routes that are more effective. Utilising optimisation tools, the user can enter various load factors to get suggestions for or even create the ideal load and route for straightforward tendering. Users can even see the route on a map to see where the order is anticipated so they can make any necessary changes.

9. Integrate external processes

Once a TMS has been implemented, many businesses also benefit from integrating it with other systems. As was already noted, some people decide to integrate with their ordering systems, ERP, or e-commerce platforms. These and other linkages speed up operations and provide overall visibility while facilitating activities between various teams and departments. They also help to maintain a clear and consistent information flow.

10. Improve customer visibility

You can provide your customers with the order insight they require with real-time tracking and analytics.

To make it simple to determine exactly where each vehicle is on the route, capabilities like Dock Scheduler, RFID and telematics connections, and Gate Check can be included.


When used correctly, a quality TMS can help you manage your freight costs, audit freight bills, and improve your customer service.

A quality TMS will:

  • Manage your freight costs by helping you find the best rates among carriers that can deliver on time and meet your needs.
  • Audit freight bills to ensure they match the information on the manifest or bill of lading. This can help prevent errors in billing and payment processing.
  • Improve customer service by providing detailed shipment status updates to customers without requiring them to call each time they want an update.


Transportation management software (TMS) summary

In conclusion, transportation management software is an essential business tool that will help to improve freight operations and save money. Whether you’re just starting out in the shipping industry or are looking for ways to grow your business, TMS is worth exploring!

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