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Originally Posted On: https://softwareapplications.com/transportation-management-system/

 

Introduction

The rising expectations of customers for same-day deliveries and real-time updates at every stage of the shipment process forces stakeholders in the supply chain to up their game. The modern-day consumers expect their order to arrive when they want it. Besides, global trade regulations are evolving at a faster rate. Businesses are under tremendous pressure to meet up with the increasing demand. Movement of goods from one place to the other is an essential part of the supply chain. With businesses going online, the burden is much more on the supply chain. This explains why many businesses use transportation management software to improve their efficiency and boost customer satisfaction.

To further make tasks easier, the best transportation management software provides some room for businesses to integrate emerging technologies into their system to additionally enhance transparency,  visibility, and increased customer satisfaction. The movement of goods across the supply chain to customers all over the world is a very complicated process. Packing goods and sending off to the destination is just the beginning of the logistics process. The real task comes with the provision of comprehensive process monitoring, reporting and tracking of the consignment at every step of the way.

What is a Transportation Management System?

Transportation management software (TMS) is software that automates various shipping and logistics tasks; ensure easy transportation accessibility and usage to maximize demand and supply. TMS is also known as trucking software, transportation management system or transportation management solution.

Through the integration of different kinds of technologies, the TMS makes the planning, execution, and optimization of the shipping process easy for businesses while at the same time assisting them to remain compliant with shipping regulations and equally enhance precise and error-free documentation. A TMS is frequently an element of the more extensive supply chain management (SCM) system.

The TMS commonly integrates with ordering and shipping software to estimate both incoming and outgoing orders and proposes multiple transportation options to the subscriber before choosing the best and most inexpensive system or scheme. Above all, the TMS performs shipment mapping and tracking to provide the optimal delivery with the most favorable carrier. The system also performs freight audit and payment settlement. It uses electronic load tendering and communication tools to choose between available carriers.

Why Do You Need a TMS?

Transportation management systems have a great impact on the supply chain. It affects every step of the process, including the planning and procurement stage, the logistic procedures and the management of the entire ecosystem. The extensive visibility that comes from this robust system increases transportation planning and execution efficiency. This boots customer satisfaction, increases sales and leads to additional growth for the business.

In today’s ever-changing global trade environment, it is essential to have an established system which will make it easy for businesses to successfully go through the complicated trade laws and compliance. TMS makes achieving this role easy. The key aim of utilizing a TMS for your business is to efficiently manage the shipping process and minimize costs. You’ll also get real-time updates on events that occur all through the supply chain. Overall, it will boost customers’ satisfaction and enhance retention.

Who are the Typical Stakeholders During the Evaluation Process?

TMS is mainly useful for logistics companies like the third-party and fourth-party logistics (3PL and 4PL) companies and logistics service providers (LSPs). However, TMS is used by almost any business in any industry like construction companies and life scientists.

The main users of the software are businesses whose annual expenditures on freight is 100 million dollars and above. However, with the development of cloud-based TMS solutions, transport management solutions are no more cost-prohibitive. So, small businesses are currently leveraging on the benefits of the TMS to improve their supply chain operations.

Currently, smaller businesses whose total annual expenditure on freight falls between 5 million dollars to 10 million dollars who previously manage their transportation using manual methods like spreadsheets make use of TMS, thanks to cloud-based infrastructures.

 

• Freight Managers
• Procurement & purchasing
• Finance
• Sales
• Customer Service
• Vendors
• Customers

TMS Needs by Size of the Company

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Small businesses: These are businesses whose numbers of their employees fall within the range of 2 to 100 and whose annual income is below 50 million. These businesses commonly lack the IT department.

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Medium-sized businesses: These businesses usually have between 2 to 100 employees, Their annual income is also below 50 million dollars. However, unlike small business owners, they have an IT department.

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Business Enterprise: These are larger corporations with more than 100 employees with a dedicated IT department. They earn more than 50 million dollars a year.

What Should You Look For When Evaluating a TMS?

Key Benefits and Considerations

There is currently a high demand for fully functional and user-friendly as more and more businesses know the system can help them to minimize shipping costs. realize their cost-saving potential. Before deciding on the TMS  that is best for your needs, you need to first list your business goals. These will determine your requirement document. It needs to be evaluated and approved by the main supply chain and IT stakeholders before you shop around the market for a suitable option.

Essential considerations for a TMS system include:

 

• Does your company want an on-premise solution or are you looking for a SaaS solution?
• Are you a small or medium-sized business? Is your target vendor reputable for providing service to your business size?
• Does the TMS provide support for all shipping modes you presently use for your business operations operation?
• Can the TMS integrate special features that meet the unique shipping needs of your market verticals?
• Does your business do global shipping? Not all transport management solutions integrate features that allow for international logistics

Essential considerations for a TMS system include

• Does your company want an on-premise solution or are you looking for a SaaS solution?
• Are you a small or medium-sized business? Is your target vendor reputable for providing service to your business size?
• Does your business do global shipping? Not all transport management solutions integrate features that allow for international logistics
• Does the TMS provide support for all shipping modes you presently use for your business operations operation?
• Can the TMS integrate special features that meet the unique shipping needs of your market verticals?

Top features to consider

TMS is fast becoming a critical factor and an essential tool for all businesses that want to remain relevant and competitive in today’s complex transportation system. Whether the system is utilized by the manufacturers or by third-party logistics providers (3PL), a good TMS can minimize transport expenses, boost performance and enhance customer satisfaction. TMS suites are feature-packed and benefit-rich which helps businesses to plan, evaluate, and protect the deliveries, shippers, and vehicles.

In General:

The following are three broad categories of the features of an efficient transportation management system:

Planning/ Optimization

A TMS offers you the benchmark information that will help you to negotiate better carrier rates Planning and optimization integration into a TMS help the buyer to conveniently select the best suitable and favorable means of transport and carrier based on the factors that determine your service needs.

The system is structured to provide the shipper selections of the best carrier using data for their previous performance, price and business needs. The TMS can estimate multiple alternatives in a few seconds to get the best cost of service which the planning and execution team of the company can successfully implement.

Execution

The TMS makes automation of the tender process possible through automatic freight tendering to the carriers through the waterfall tender process. The process, tenders to the vendor with the least cost of the contract. If they fail to accept the shipment, the tender will be sent to the next carrier from the least cost on the contract until it gets to the most cost-prohibitive option or the point where all the carriers involved in the load plans accept the load.

Performance management

This estimates and manages performance across the supply chain and every step of the shipping process. Now let’s have a more comprehensive look at the features of TMS and how these features can benefit you and your business.

Features of TMS

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PLANNING AND DECISION MAKING

This can include routing, dispatching, and planning. TMS can search for shippers, obtain fuel and time-efficient routes by performing map analyses, analysis of traffic data, speed limits, modal limits, and fuel cost. With the collected data, shippers can decide on the best carrier for each shipment. This helps to consolidate deliveries into the most potentially efficient loads.
TMS will use specific parameters to determine the most efficient transportation schemes. This can be least or most significant depending on the policy of the user which can include the cost of transport, shorter delivery time, fewer potential stops to certify quality, regrouping of flow coefficient and so on.

Additionally, if your team has multiple priority projects on the go, there’s a great risk that time and resources will be spread very thinly. With every hiccup, your launch to market gets delayed, which means you face increased budget costs and miss out on revenue opportunities.

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CARRIER CONTRACT MANAGEMENT

Carrier Contact Management makes it easier for the buyer to easily view and compare costs and contracts through the integration of digital contacts, real-time tracking of terms and conditions. It also alerts the user when the contract renewal time comes. A suitable TMS will make carrier contract management easy. When your contracts are digitized it makes it easy for the members of your team to weigh different contracts and costs from carriers side-by-side.

Ensure you get a TMS that has the capacity to:

• Track each one of your terms and carrier agreements in real-time.
• Restructure the onboarding procedure of the carrier.
• Handle rates of contract, accessory, cost of fuel, contract terms, certifications, transport or shipment maps, and so on.
• Handle carrier risk by through the automated process of monitoring the credentials of a carrier via external databases such as the RMIS
• Provide you with the necessary alert when you need to renew your contract, for instance, and integrate suitable discounts in fresh contracts.
• Show the total costs which include the costs of accessories to make it easier for you to choose the cheapest carrier.
• Assist to establish the cost and pricing structure. A TMS can estimate the accurate shipping cost to offer you insight into what you could charge your clients.

Transport /shipment management modules

• Cross-docking

  This functionality of a TMS helps to find out if there are types of shipments that will eliminate having to store the goods in the warehouse. In this case, goods are shipped directly from the producer to the customer. Cross-docking minimises shipment time, saves cost and frees the warehouse space. The downside of this, however, is the loss of control over inventory. Thus, to manage this effectively, aggressive inventory control procedures must be in place. opportunities.

• Last-mile logistics

  This is the last stage of shipment and involves moving the consignments from a distribution center to the end-user. This may cover roughly 50 to 100 miles. Last-mile logistics hires the services of the parcel or small package carriers to ensure real-time delivery of goods or within 24 hours.

• Order tracking

  The order tracking feature provides the user with a platform that monitors every step of the shipment process and sends alert when any event not expected that may impact on the delivery time and cause delays

• Transportation accounting 

  TMS also integrates an accounting feature that informs customers of their shipment cost by collecting all delivery documents in a single location. The software makes accounting easier by conveying costs and allocating billing codes, creating and paying shipment invoices to make accountability and budgeting easier.

• Reverse logistics

  While it’s now frequently the case, sometimes returns are inevitable. The management process from an end-user to the producer is normally a very challenging part of the logistic procedure. Through the use of a reverse logistics system (RLS) streamlining repair, return, and reallocating products becomes easier.

• Logistics analytics

  TMS can utilize big data analytics and big data to perform the analysis of the shipping history and boost the operations of the customer that could reduce overall logistics cost and time for shipment delivery. Through the integration of Business Intelligence, TMS can generate performance metrics and KPIs, and develop computer models that will forecast the problems of the supply chain.

Transportation plan Execution/follow up

TMS also makes it easy for users to execute transportation plans like carrier rate acceptance, carrier shipment process, and EDI. The software also makes it easy for the physical and administrative transport process to be integrated like the ability to track different events of the shipping process from the departure point A to the delivery point B.

Route Optimisation and Consolidation

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LOAD OPTIMIZATION

This feature is essential for the arrangement of packages or consignments on the carrier and implements the Stackability rule and more.

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ROUTE OPTIMIZATION

Try to organize deliveries through the best available routes and using the best possible carriers.

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TACTICAL FREIGHT ADMINISTRATION

 Arrange bids by carriers for long-standing contracts based on Risk, Capacity and Cost

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SELECTION OF CARRIER

Try to organize vehicles for each shipment taking into consideration consignments, business shares, and overall charges

Fleet Management

TMS can help to maintain an entire fleet of vehicles. With such a feature integrated, a good TMS can procure, pay, dispose of, cost and place value. It can equally perform advanced tasks like management of drivers, service recording and history of carriers location throughout the shipping process together with mapping and route optimization. TMS serves as a central system for management of the vehicle routine and vehicle drivers including maintaining the vehicle and economizing fuel, GPS tracking, compliance with the health and safety regulation and so on.

Performance Management Visibility

This functionality integrated into a TMS system offers an extensive view of every stage of the shipping process and makes managing tasks easier. The provision of accurate and real-time visibility of the critical supply chain data makes maintenance of healthy demand and supply balance possible by proactively managing order flows. This results in lower overall transportation costs. So, for full visibility ensure your TMS provide:

• Automatic pick up;
•  Carrier Integration through EDI
•  Realtime automatic notifications
•  Exceptions alerts

The visibility feature of a TMS will improve your customers’ trust, boost retention, minimize cycle times and make the management of cost logistics easier.

Real-time Tracking and Tracing

Beyond product features, consider what other factors are important in your decision-making criteria. You want a vendor that’s easy to work with and responsive whenever you have questions about how to use the software features or face operational dilemmas. Every second counts when potential sales are on the line.

Here are some questions to ask vendors when evaluating the level of service and customer support they are able to provide:

• What service level agreements do they offer and how quickly will they respond you?

• Real-time tracking makes the instant transfer of delivery data between the carrier, distributor, and customer possible. TMS needs to integrate track-and-trace features for goods while they move through the network and offer a wide range of view of every step of the shipment process and make management easier.

  Tracking Drivers En-Route

  Driver tracking allows users to gain insights about the most optimal routes and this results in the generation of a more calendar or plan. Also, it makes assessing individual drivers easy. So, shippers can track how efficient a driver is and leave a review which will help to improve the overall process. Real-time tracking equally results in large safety benefits particularly in situations of emergency like accidents.

Maintenance management

TMS maintenance management feature assists businesses to monitor the maintenance plan of their fleet. This includes preventive maintenance, assessment of tire conditions, vehicle parts and repairs, and taking records of events and sending out reports for compliance with DOT laws.

Accounting Management and Freight Settlement

TMS assists transportation companies to perform their accounting tasks. This feature allows TMS to allocate costs, assign billing codes, reconcile and match invoices, generate payment vouchers, perform freight billing and auditing plus take care of other general accounting tasks to ensure suitable and correct payments.

A TMS means you no longer have to struggle with heaps of paper documents but can currently get a single invoice, one bill, and a single payment. Through a TMS, you can now estimate the costs of delivery via TMS by putting a combination of factors into consideration like the distance, the weight of freight and shipment mode. TMS provides comprehensive reporting and analysis to allow businesses access to the most beneficial carrier and the cheapest shipping method.

Business Intelligence and Analytics

A TMS integrated with the business intelligence feature can analyze shipping processes. It normally involves the use of data storage, the existence of a dashboard to report generated data in either a standard or custom format. The aim is to collect, analyze and summarize the metrics of the supply chain and shipping process and utilize them to make better decisions or identify needs and major areas that need functional enhancements. It can also evaluate how effective your existing strategies are and help you to make smarter moves.

Top Transportation Management Software Integrations

Transportation management software regularly comes with features that make it seamlessly integrate with the rest supply chain suites, APIs, and warehouse management software. This makes accurate predictions of demand and shipment volumes possible.

TMS service providers offer solutions that come with standard integrations that they created and also allow for third parties integrations. This allows users to optimally manage the supply chain to meet the most pressing needs of their business which is to cost costs across the supply chain.

Some of the common integrations include the following

 

 

• EDI Integration
• Accounting, Auditing, invoicing and payment system integration
• Planning and Execution Integration
• Warehouse management system Integration 
• Inventory/Order management
• Shipping and Logistics API integration/ Strategic transport planning software
• Customer relationship management integration
• Freight Execution Platform/dashboard integration
• E-commerce Integrations
• ERP Integrations

Comparing the Best 10 Transportation Management Solutions

To help you through your buying journey as you explore which subscription management software is the best solution for your business needs, here’s a comprehensive comparison of the five most popular solutions currently on the market.

Methodology:

We aggregated the data based on customer reviews from the most popular peer-to-peer review sites, service status indicators from vendor partners, and other publicly accessible data resources.

Convoy is a popular open digital freight network with a fully connected marketplace that uses machine learning and automation to connect shippers and carriers for the movement of millions of truckloads to save money for shippers and increase earnings of carriers. Convoy was established in 2015 by CEO Dan Lewis. The company’s headquarters is located in Seattle، WA, US but it has a branch office in Convoy Atlanta, GA.

The company has since developed from an online freight-brokerage company to an enterprise with a worth $1 billion. Convoy currently has a network of 100,000 truckers, more than 35,000 carriers, and roughly 500 shippers nationwide.

It’s a free Transportation Management System (TMS) that comes pre-set with access to the company’s network of high-quality carriers. Convoy Connect allows shippers to manage all of their existing carriers with instant access to Convoy’s network while guaranteeing top industry service levels and real-time pricing through 24/7 GPS visibility. With Convoy Connect, shippers have total control over their routing guides. They decide which carriers they want to work with on each lane and manage rates and partners directly in the system.

Conclusion

In our present day’s global trade environment when businesses are going digital and pressures are rising from customers demanding real-time or same-day delivery, businesses need to leverage on the benefits of the TMS  to enhance efficiency, reduce cost,  and boost customer satisfaction to remain competitive.  With varieties of TMS solutions in the market, the selection process can be daunting.

You need to apply due diligence to match the needs of your business with your strategic vision during selection. To get optimal benefits from your TMS,  you must remember a few basic considerations that will ensure your success. Your first step is to know your exact business needs and set a suitable budget. When you precisely know what you need and arrive at the amount you’re willing to spend you can begin to look for a TMS solution that provides the features and functionalities you’re looking for. It may be worthwhile to identify a TMS that has features and functionalities that can improve your existing system.

Determine your project scope and specify your expectations. Creating a roadmap before deployment will set you on the right road to success. By specifying your expectations and ensuring that your software vendor’s services are in agreement with your expectations will help you to realise your goal. This is critical.

Form a cross-functional team of company stakeholders that will help to arrive at your business goal to ensure that your TMS implementation takes the right dimension from day one. When you finally launch your program, don’t forget to constantly search for how you can optimise and maximise your benefits at every stage of the implementation process.

All the top 10 TMS we have reviewed are great service options that have great reputations in the industry. However, your final selection depends on your peculiar needs. So, let your organization’s goals and needs drive your final decision and choice. Whatever system you decide to go for, ensure that it has the capacity to optimise shipping routes above all other functionalities. It’s very essential for your success!

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References

• https://www.softwareadvice.com/scm/transportation-management-software-comparison/#buyers-guide
• https://technologyadvice.com/fleet-management-software/
• https://www.capterra.com/transportation-management-software/
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• https://softwareconnect.com/transportation-management/
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