The term ‘Transportation Management System’ has become increasingly common in the logistics industry as companies look for ways to remain competitive in a rapidly changing marketplace.
What is a Transportation Management System?
At its core, a transportation management system is a platform aimed at helping businesses more effectively manage their supply chain. Commonly referred to as a TMS, it helps organize and track the movements of products and materials.
Depending on the specific program, a TMS can provide a wide range of capabilities These can include:
- Managing shipping units
- Outbound and inbound shipment scheduling
- Transportation mode selection
- Freight bill auditing
- Payment and financial management
- Processing of loss and damage claims
- And much more.
Possibly more importantly, it digitally manages freight operations. This helps shippers minimize the constant calling and emailing between internal and external partners. The visibility into day-to-day operations also helps ensure the timely delivery of freight and goods while streamlining the shipping process.
Additionally, a robust TMS can make it easier to manage and optimize multiple transportation modes — whether by land, air, or sea.
Why It’s Important
Transportation management systems can play a central role in supply chain operations. They can provide positive benefits across multiple business areas, including planning, procurement and lifecycle management.
The ripples can also be felt beyond the supply chain. More efficient transportation planning and execution can result in higher customer satisfaction. That higher satisfaction leads to more sales. Those increased sales help businesses grow.
Benefits of a Robust TMS Include:
- Reduced costs for the business and the end-customer
- Streamlining of supply chain processes across geographies, modes, and carriers
- Faster and more accurate billing and documentation through automation
- Heightened visibility and security
- Fewer delays and faster delivery times
- The ability to track freight, both locally and globally, on a single platform
- Better import and export compliance
- Improved customer satisfaction thanks to real-time updates and fewer delays
Types of Transportation Management Systems
There are transportation management systems that cater to companies from every industry and of any size. These range from no-fee online versions to on-site enterprise resource planning software. Businesses can use a standalone TMS that integrates with their existing supply chain management solutions. Additionally, they can opt for cloud-based systems in which they subscribe to the technology on a monthly or annual basis.
One example of a no-fee, online TMS that focuses specifically on LTL shipping management is Averitt Connect. This offering allows you to control your shipping process directly with your carriers. It effectively eliminates the middleman — providing quick access to multiple rates from LTL carriers throughout the U.S. It also allows you to book and track shipments through a single online portal. That means no more tracking multiple logins and passwords or manually managing exceptions.
Another advantage of Averitt Connect is the fact that carriers provide their own independent rates without seeing what others have offered. As a true direct-to-carrier TMS, Averitt Connect provides the tools to let you quote, coordinate, and track all your shipments with all your carriers on one free-to-use system.
Watch the short video below to learn more about Averitt Connect!
Do You Need a Transportation Management System?
The short answer is, yes. Shipping costs make up a high percentage of the price of most manufactured goods. For some items, shipping can account for over half the final retail price that consumers pay. Reducing those costs will obviously have a positive impact on your business.
This leads to the question that a TMS seeks to answer: are you paying too much for your freight? Shipping costs are constantly changing. So are carrier rates. The system is constantly in flux and keeping up with it requires an enormous investment of time for you and your staff.
In addition to its many other benefits, a TMS can manage these relationships between shippers and carriers — automating carrier correspondence and saving significant time.
Supply chain management is constantly in motion — and even the most advanced system can’t fully automate every process. But an efficient transportation management system can be a game-changer for any business that ships or receives goods and materials — dramatically streamlining operations and optimizing both time and costs.