Introduction
Consider everything that goes on outside of any shipper, manufacturer, or distributor's physical location. The software that manages rating, mode, carrier selection, tendering, track and trace, and freight auditing is known as a Transportation Management System (TMS), which also serves as the central information hub for all things transportation-related. Transportation management software is another tool used by logistics service providers (LSP) to support their customers swiftly, effectively, and efficiently.
In general, transportation management systems are used to automate, plan, and execute incoming and outgoing shipments via one or more modes, including road, rail, air, ocean, and postal. To make strategic decisions that improve efficiency and utilization, lower costs and operating ratios, and increase profitability, they provide visibility into daily transport operations. They do this by sourcing data from service providers (motor carriers, freight brokers, and third-party providers).
Few Things Transport Management Can’t do
- Optimize in Order in full
Since the introduction of transportation management technologies, supply chains have become more complicated. They have become more digital, more international, and more integrated across businesses. Typical transportation management systems are not linking the nodes in this contemporary environment when looking upstream and downstream to collaborate between inventory levels, availability to promise, or different warehouses to optimize the order completely.
Transportation management systems frequently accept data from ERPs, warehouse management systems (WMS), finance systems, and CRMs for information about inventory availability, analytics, and reporting. The majority of TMS products don't interact with other crucial external systems like Shopify or Amazon. Transportation management systems aren't planning and acting based on a complete order picture in this regard.
- Support all Modes
Today's shippers must support every possible mode of service to provide their customers with a variety of options and remain competitive. Anything from a letter delivered by USPS to regional parcel providers to national providers over the first and last mile, cartage carriers, private carriers, LTL (less than truckload), TL (truck load), rail, and intermodal across the ocean and to air can fall under this category. Don't forget about bulk, flatbed, refrigerated, and a variety of specialist providers, including vehicle transporters and fuel suppliers, among many others.
- Handle All Geographic Flows
Some TMSs exclusively deal with domestic flows, while others only manage foreign transactions. Numerous transport management systems provide specialized services and capabilities, and they excel in their specific fields. Businesses that require assistance with
import and export should look for a system that can view all regions and geographic areas, provide worldwide rate shopping, and give conversions for everything from language to units to currency.
- Support Extensive Rating
The mode issue is at the root of the rating restriction since only the modes of service covered by transportation management systems are supported in terms of ratings. The TMS system may or may not contain zip-to-zip, distance, flat rates, and special rates from NMFC rates to dimensional rates to service types, depending on the demands of your organization. The logistical reach of some TMS solutions is constrained, therefore pricing might not always include all accessorial charges imposed on a shipment by the service provider.
- Offer a Full Cost-to-Serve Picture
Transportation management systems sometimes only account for the transit portion of an order's trip, therefore they miss all the additional, frequently undetected costs that develop. For instance, handling, customs, tariffs, and storage charges might not be included depending on the depth and breadth of the TMS solution's scope.