What is a Transportation Management System (TMS)?

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Transportation Management System (TMS) definition.

Distribution companies, e-commerce organizations and anyone else that moves freight on a regular basis realizes there are many moving parts to the shipping process, both literally and figuratively. From quoting to delivery, those shipping freight are almost always looking for ways to optimize spend and improve processes.

Thanks to transportation management systems (TMS), shippers have a solution on their side to do just that. But, before we look at some of the common challenges a TMS can help mitigate, what is a transportation management system exactly?

A transportation management system, or “TMS,” is a platform that’s designed to streamline the shipping process. A TMS allows shippers to automate the processes they have in place and receive valuable insights to save time and reduce spend on future shipments.

Now that we have a better understanding of what a TMS is at a high level, here are four common challenges that can be alleviated with its implementation:


Challenge #1: Keeping quotes organized.

If you’re working with a number of different shipments, you don’t want to be on the phone or jumping from website to website asking for rates from the carriers in your network. Dialing different carriers and requesting quotes can be a time-consuming process, taking you away from other aspects of the business that need attention.

How a TMS can assist: With a transportation management system, you as the shipper will have the technology you need to make routing decisions based on quotes, transit time and carrier mix. This centralized location for quoting will eliminate unnecessary stress and time spent during the booking process.


Challenge #2: Selecting the best carrier.

Not all shipments are the same. Sometimes, shipments are time or temperature sensitive, require special delivery services or need to be handled with extreme care. As a result, not all shipments should be handled by a single carrier. While some carriers might be best-suited to handle long hauls, others might offer the specialized services you need for a small added price.

How a TMS can assist: A TMS can help to simplify the carrier selection process by allowing you to evaluate the merchandise being sent and matching it with a carrier in the network. By managing this entire process in one place, you will be able to revisit past shipments and quickly match similar loads to the appropriate carriers.


Challenge #3: Tracking shipments.

Businesses don’t always use the same carriers for all their freight. It’s common for a number of different shipments to be in transit aboard different company trucks all over the map. Consequently, the freight tracking process can become very challenging. Without a TMS, you or someone within your organization may have to enter shipment numbers into forms on a number of different carrier sites.

How a TMS can assist: With a TMS, you can track freight that’s on the road and even receive alerts to any transit exceptions or unforeseen delays from one location. It’s impossible to control human error or Mother Nature, however, a TMS will let you see when delays are occurring and why.


Challenge #4: Gathering insights.

Without a TMS in place, you may have a general gut feeling of who the cheapest carrier has been over the past year, or which carrier had the highest percentage of on-time shipments. However, without technology on your side, it’s hard to know for certain.

How a TMS can assist: Robust transportation management systems will offer you in-depth insights and reporting capabilities. For example, let’s say you oversee the shipping process for 20 locations that each send five shipments out a week. That’s 100 shipping invoices to create and shipments to evaluate each week. With a TMS, information will all be stored in one location and custom reports can be created to analyze things like the discrepancies between rates and final invoices.


Final thoughts.

The freight shipping process can be a challenge without technological solutions to assist. We hope this post gave you a better understanding of what a transportation management system is and the challenges it can help you overcome.

Whether you have been shipping freight for many years or this is your first time, Freightquote’s patented technology allows you to get instant and free freight shipping rates. 

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