What Is a Transportation Management System? A Beginner’s Guide to TMS

Transportation Management System
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Transportation Management System (TMS) is one of the digital tools that’s now helping businesses soar newer heights in the supply chain management world and stay ahead of the rest. In 2020, the New York Times asked where American’s greatest logistics machine was. Apparently, the machine was suffering a massive cardiac arrest and was slowly but painfully beating away, which is why you need a transportation management system the more. But you may wonder, ‘what is a TMS? What are its advantages?’ Get the answer to these questions and many more by reading this write-up.

What is the Transportation Management System?

The first step in appreciating the TMS is actually understanding what it is. Simply put, it refers to a digital tool or a software program that helps you plan and manage your transportation and logistics within a supply chain. Successful supply chains have a broad and consolidated view of everything happening in the business, what works best, and what needs improvements. TMS is the exact tool that achieves this role of coordinating all the company’s transportation and logistics activities and provides clear visibility of everything that happens within the supply chain. With a TMS, couriers are managed, shipments are tracked, and deliveries are settled.

How do TMS, WMS, and ERP differ?

In most supply chains, you will find TMS, warehouse management system (WMS), and enterprise resource planning (ERP), all available in a system. While the three work collaboratively, they are independent of each other. The WMS focuses on inventory and warehouse operations. TMS oversees transportation and logistics, including freight inbound raw materials and outbound finished products. The ERP comes in handy and integrates these data, giving the company a holistic view. Although some bodies still use TMS to run warehouse operations and WMS to oversee some transportation roles, the two systems are independent, each having a unique role.

Functionalities and Benefits of TMS

Maybe you want to try the TMS for productivity in your business, but you are unsure of its benefits and functionalities. This section enlightens you on what advantages come along with making TMS a part of your supply chain

1. Load planning

Load planning is one of the top roles of a supply chain, and TMS easily does this to you. For instance, the chain can find the best rates, plan the routes while transporting goods, and even organize couriers. The main advantage of the algorithm-based load planning using TMS is that the business can save more time in the end front and while on shipments.

2. Load execution

With the shipper’s guide, load execution where the tendering process is automated and the couriers loaded using pre-determined data. Typically, before dispatching a carrier, it would be necessary to measure its performance and acceptance and other issues. However, with the TMS, all this is automated, saving time and energy.

3. Payment 

Payment is yet another critical element of the supply chain, and even with this, TMS helps well. It goes through the carriers, prepares their invoices, and sends them. What’s more, TMS allows shippers and carriers to view records and customer performance analytics and even run audits to merit performance. 

4. Freight tracking 

Knowing where shipments are at what time is critical in supply chain management. With TMS, it is possible to track freights from the warehouse to the point of delivery. The benefit of this is that the supply chain has real-time information about the carriers and the shippers. In addition, it is possible to tell which points the freights took long and explain why.

5. Actionable reporting

Something else most supply chains are achieving with the TMS software program is actionable reporting. Everything from channels, customer behavior, digital transformation, and supply chain strategies are fast-changing, and so do operations. TMS allows a business to flex with these changes and adapt by providing the actionable reporting feature. Through this, real-time data is analyzed and used to simulate future situations and respond to them. With such information, companies now conduct continuous improvements and reviews, placing them ahead of the rest in the industry.

Key features of a high-quality TMS

Like any other field, the digital field has quite a handful to choose from regarding TMS programs. They are varied, and while some are simple, others are complex. Choosing which TMS to use for your business will depend on several factors, including the condition of your business, its complexity, what your top priorities are, and the features of the TMS you want. The advantages and functionalities previously discussed also constitute the features of TMS. These include load planning, load execution, freight tracking, payment automation, accountable reporting, data simulation, and cloud-based systems. Of course, most people like cloud-based systems as they can be remotely accessed. Still, your choice depends on what you want.

Should you invest in TMS?

This is a big question whose answer you need to get. The digital world has a lot to offer for supply chains and businesses, and sometimes you are unsure what to take and what to let pass. Therefore, you may wonder whether you really need to invest in TMS. You might be surprised to know that TMS is not a luxury; it’s more of a necessity if you are determined to make your business work. Top-notch digital solutions are critical and the only way to adapt to and satisfy today’s ever-changing customer needs and behaviors. You don’t want to be left behind. In fact, think about the numerous benefits stated above that have to do with TMS. Who doesn’t want real-time information, data simulation, payment automation, and shipment tracking for smooth activities? You know the answer, which is why you might want to reconsider your decision. In most supply chains, you will find TMS, warehouse management system (WMS), and enterprise resource planning (ERP), all available in a system. While the three work collaboratively, they are independent of each other.


Transportation Management System refers to a tool or software program that helps the supply chain coordinate transportation and logistics. It is becoming popular today because of its effectiveness and efficiency. Is the TMS investment worth the pence? What are the benefits and the functionalities of the TMS programs? This beginner’s guide to Transport Information System answers these questions and more.


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