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What is a Transportation Management System (TMS)?

As with many other industries, the logistics and transportation industries rely more and more on technology to streamline operations. While many trucking companies use spreadsheets, emails, and phone calls to manage their operations, transportation management systems (TMS) are a much better option.

What is a TMS? TMS technology helps companies optimize the use of drivers and other resources in order to move goods. It can also assist in ensuring legal compliance and other administrative tasks. By streamlining their processes, companies save time, money, and valuable resources.

What is a transportation management system?

How do trucking transportation management systems work?

A TMS uses data to analyze and automate or improve certain processes, making operations more efficient. A TMS takes data that might have been scattered before and puts it into one dashboard so you can find it quickly and make more informed decisions.

Analyze rates.

Instead of visiting several carrier websites to find the best rate for each load, 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 process.

Book loads.

TMS shipping also lets you book loads with the carrier you want directly from your dashboard, saving a phone call or email.

Dispatch drivers.

Carriers, you can dispatch drivers when you get a load booking from a customer. By integrating your transportation management with fleet tracking, you can determine which driver is nearest to the next pickup and can handle the load most efficiently. This helps you avoid idle time and deadheads, keeping your drivers working.

Track shipments.

The TMS supply chain software lets you track shipments from when they are picked up at a warehouse or other location until they are delivered. This increases the visibility of orders in the supply chain and helps you deliver the best customer service possible.

View reports.

Just how efficient is your company? Truckstop.com’s ITS Dispatch system helps customers gain 31% more loads, achieve 16% company growth, resulting in a12% increase in profits. Companies that use TMS save more than 18 working hours a week. 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.

ITS Dispatch for carriers.

Ensure compliance and documentation.

Advanced TMS can also generate compliance paperwork for domestic or international shipping and can assist with other complex logistical issues. Depending on the lanes you run in, this can involve the paperwork needed to cross state lines with a certain cargo, complex bills of lading (BOL), and other necessary paperwork.

A good TMS is like an automated administrative assistant and will help any trucking company optimize its operations.

Cloud-based/SaaS vs. on-premises TMS

Much like servers and other technology, a TMS is often run through the cloud. This is known as a Software as a Service (SaaS) or a cloud-based solution. There are huge advantages to having your transportation management software hosted in the cloud.

On-premise software is loaded on your computers in a given location. While this has some security advantages, it also comes with challenges. You may need a physical visit from a technician to update software, troubleshoot, or if you have an internal network or server connection issues. On-premise software is also not portable. You can’t take it on the road with you.

Cloud-based services, on the other hand, update automatically in most cases. They can be accessed from anywhere with an internet connection and are less expensive all around. This is because they are usually on a SaaS platform, and the user pays a monthly or an annual fee to use it. Drivers, brokers, managers, and carriers can access the platform on the go, allowing for collaboration, consistent communication, and efficiency. In most cases, a cloud-based TMS is a much better and more efficient choice than on-premise options.

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 single industry use a transportation management system of some sort. Smaller companies often use scaled-down versions. But as SaaS becomes more common in transportation, even smaller carriers and freight brokers can find an affordable TMS logistic system.

Benefits of using a trucking TMS

There are several 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 unlimited load tracking, digital document storage, driver messaging, and more. If you are a carrier, there is an affordable TMS solution to meet your needs.

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 documents.
  • Create detailed customer agreements and email 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, both short and long term.

Reduce paperwork and book more loads with a TMS.

Why should you use a TMS shipping system? You save money and time by reducing administrative paperwork. But using a TMS also ensures that you are 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.com. There are good options for everyone, whether you’re a carrier or a broker, a small or large company.

Frequently asked questions about TMS

How does a TMS fit into the supply chain? The supply chain is about three things: purchasing, manufacturing, and transport. A TMS focuses on the transport part of that supply chain — the movement of goods. A TMS is often a part of a bigger, overarching supply chain management (SCM) system in larger companies.

How much does a freight TMS cost? Freight TMS costs vary depending on your specific needs and if you go with an on-premise or cloud (SaaS) solution. Simple systems for owner-operators can start as low as $50 a month.

What are the most important TMS functions? Choose TMS functions based on your specific needs. Generally speaking, the most important TMS functions are rate comparisons, load dispatch, IFTA and other paperwork management, and the different detailed reports you can pull from the data the software collects.

Do you have more questions about TMS software and what it can do for you as a carrier or a broker? Get in touch with us at Truckstop.com for more information and schedule a demo today.

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