Transportation Management System (TMS): Function & Benefits

Whether your company is large or small, if you ship goods, you know it’s vitally important to know where those goods are at all times, how much it will cost to get them to their final destination, and who will transport them at each stage of the journey. Fortunately, modern technology has made keeping track of these details much simpler than it was even 20 years ago through the use of a transportation management system or TMS.

What Is a Transportation Management System (TMS)?

A transportation management system (commonly referred to as a TMS) is a computer software system designed to help companies manage the logistics involved in moving physical goods by land, sea, air, rail, or any combination of modes. With a TMS, companies can compare carrier rates and services, automate processes such as load tendering, optimize routes, track a shipment’s movement through to delivery, handle payment and settlement, and much more.

What Are the Main Functions of a TMS?

TMS software makes managing the lifecycle of a load more efficient and less complicated with the following functions.

  • Planning and Execution – With automated rate comparison and booking, shippers can quickly find rates, choose the mode of shipment, plan routes, optimize loads, and track freight.
  • Freight Management – Access to real-time rates from thousands of carriers simplifies the quote to contract process. TMS features also provide more efficient order management, rate determination, and multimodal transportation management.
  • Administration – A TMS simplifies complicated administrative processes with tools for billing, payment, settlement, and auditing. For instance, a TMS not only generates bills of lading but can easily take care of complex settlement processes.
  • Analytics and Reporting – With a TMS, shippers have a real-time overview of the entire transportation process, which allows them to adjust to changing circumstances and make decisions based on current data. Additionally, the detailed reports provided by a TMS help shippers forecast transportation demands and plan for the future.

What Are the Benefits of a TMS?

There are numerous benefits to having a TMS, but the challenging supply chain issues created by the COVID-19 pandemic have made a TMS even more valuable. Here are a few of the key benefits.

  • Reduced Costs – A TMS helps shippers save money in several ways. First, the software quickly compares shipping rates and pinpoints the most cost-effective ones. Second, the automated processes, such as booking, paying, and auditing, save time and reduce errors, thereby saving on administrative costs. Third, because the software promotes better fleet management and improved coordination between transportation and fulfillment functions, warehouse and distribution costs can be significantly lowered.
  • Improved Inventory Management – The real-time visibility provided by a TMS allows shippers to monitor the movement of goods and can even generate new routing proposals during transit to accommodate unforeseen issues.
  • Increased Customer Satisfaction – Because shippers have real-time information about the status of all orders, they can update customers regarding delays or shipping issues. Plus, a TMS simplifies tracking, billing, and payment processes for the customer, as well as the shipper.

Nexterus Has the TMS Solution for Your Business

No one knows transportation management systems better than Nexterus. In fact, we developed what is believed to be the first TMS back in the late 1980s and are now proud to offer our clients access to Fusion Center, our proprietary global TMS.

With Fusion Center, Nexterus customers benefit from automated rate quotes, 60+ standard reports, e-dispatch, bill of lading and shipping label creation, status tracking, cargo claims management, freight bill audit, payment processing, automated billing, and more. If you have questions about how TMS integrations can improve your business, we’re the people to ask.

Fill out and submit the contact form on our website, and one of our team members will be in touch with you soon.

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