What is a TMS System?

As with many other industries, logistics and transportation rely more and more on technology to streamline operations and reduce costs. While many trucking companies use spreadsheets, emails, and phone calls to manage their operations, there’s a better option: a transportation management system.

A transportation management system — also known as a TMS, or TMS system — is software that helps companies optimize the use of drivers and other resources in their supply chain network. TMS software can ensure carrier compliance, simplify administrative tasks, and give businesses transparency into every aspect of their transportation network.

We’ll explain how a TMS system works, and how it helps businesses save time, money, and valuable resources.

How do trucking transportation management systems work?

Transportation management systems automate or improve processes based on real-time data from the supply chain. A TMS system can quickly interpret and organize data to improve the efficiency of supply chain planning and streamline transportation operations.

Analyze rates.

Instead of visiting several carrier websites to find the best rate for each load, you can use a transportation management system to compare carrier rates side-by-side in a single dashboard. Quickly see which carrier offers the best deal for each load. You can even compare past loads and match shippers with current similar loads, speeding up the carrier-selection part of the shipping process.

Book loads.

TMS solutions also let you book loads with the carrier you want directly from your dashboard. You can upload documentation, finalize contracts, and share all shipment information within the platform.

Dispatch drivers.

Carriers can use TMS software to dispatch drivers when they get a load booking from a customer. A transportation management system with integrated fleet tracking can show you which driver is nearest to the next pickup and has capacity for the load. This helps you avoid idle time and deadhead miles, keeping your drivers working.

Track shipments.

TMS supply chain software lets you track shipments from carrier pickup to delivery. With that information, you can provide updates to boost customer satisfaction and proactively communicate if timely delivery seems unlikely. Transportation management systems also use real-time traffic data for accurate predictions of delivery times.

View reports.

How do you know? TMS allows you to run and view reports. These reports allow you to make better decisions by providing visibility into potential improvement areas. The overall transportation management system gives you the tools to do something about them.

Ensure compliance and documentation.

Modern TMS solutions can generate compliance paperwork for domestic or international shipping and can assist with other complex logistical issues. Depending on the lanes you run in, TMS software can generate the paperwork you need to cross state lines or transport goods to and from Canada or Mexico.

Who uses a TMS?

Generally speaking, everyone in the supply chain business uses some form of TMS. If a company needs to ship, move, or receive goods, transportation management will benefit them. This includes:

• Manufacturers
• Distributors
• eCommerce companies
• Retail chains and shippers
• Enterprise-level shippers and receivers
• Trucking companies
• Brokers and their freight agents

Businesses in almost every industry use a transportation management system of some sort. Smaller companies often use scaled-down versions. Even smaller carriers and freight brokers can find an affordable TMS logistics system. No matter what size the fleet, everyone can benefit from a TMS system.

Benefits of using a trucking TMS

Companies that use TMS save more than 18 working hours a week. There are several other universal advantages to using a TMS trucking or TMS freight system:

• Lower shipping and administration costs
• Increased operations speed and efficiency 
• Ability to identify and address bottlenecks and other issues faster

But there are additional benefits specific to carriers and brokers:

TMS benefits for carriers

• Create invoices with a single click, saving you time.
• Automate IFTA reporting, ensuring you are compliant and don’t miss anything.
• Create driver settlements to reconcile invoices and loads quickly.
• Confirm loads easily, saving you time, and preventing accidental overpayments.
• Integrate with Quickbooks to keep all of your accounting in one place.
• Email load sheets, which reduces paperwork and prevents lost documents.
• Get detailed reports to help you spot problems and take action to solve them.

Advanced features include digital order management, document storage, driver messaging, and more. Even with additional features, a TMS for carriers is usually affordable.

TMS benefits for brokers

• Create detailed carrier payables, speeding your accounting process.
• Easy invoicing and load confirmation saves you time and simplifies the billing process.
• Detailed reports such as rate comparisons help you find the lowest rates easily.
• Quickly create bills of lading and other essential supply chain documents.
• Create detailed customer agreements and share them inside the system.
• Use your own logo on your documents and get access to sales management tools.

A good transportation management system will save your business time and money on transportation planning.

Cloud-based/SaaS vs. on-premises TMS

Much like servers and other technology, a TMS is often hosted in the cloud as a SaaS product. There are huge advantages to having your transportation management software hosted in the cloud.

Cloud-based transportation management systems are accessible from anywhere with an internet connection. The TMS provider charges users a monthly or annual fee and handles software updates, support requests, and may even offer a self-service training portal.

An on-premise software system works only where it’s installed, so it’s not a good transportation management system for carriers. While on-premise transportation management systems have many of the same features as cloud-based security advantages, they also come with challenges. You may need a visit from a technician to update software, troubleshoot, or if you have an internal network or server connection issues.

Reduce paperwork and book more loads with a TMS.

Using a TMS ensures that you’re tracking everything properly, nothing gets lost or missed, and you’re complying with all regulations. It also keeps accounting simple and in one spot.

Being more efficient means you can book more loads and earn higher profits for drivers, brokers, and the company overall.

Which TMS is right for you? Check out the ITS Dispatch system from Truckstop. There are good options for everyone, whether you’re a carrier or a broker, a small or large company.