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How To Use TMS Software To Revolutionize Your Freight Operations
Alongside warehousing and manufacturing, transportation plays a significant role in the supply chain. Many processes must be appropriately handled, from delivery planning to shipment tracking to carrier management, to ensure efficient, money-making freight operations. And that’s where TMS software comes into play.
TMS software (otherwise known as transportation management software) assists in the planning and execution of the physical movement of goods. Its features are designed to automate and streamline essential workflows to increase profit margins, improve working relationships, and optimize infrastructure.
Today’s freight operations landscape is mired with challenges, including shipment coordination, ever-rising customer service demands, and tracking problems. Still, the right TMS software can minimize or eliminate these difficulties.
Understanding TMS Software
A transportation management system’s primary function is planning, ensuring operational efficiency, and seamlessness for freight operations. Utilized by all supply chain members and vendors, including manufacturers, distributors, and 3PLs, it’s the backbone of shipment coordination and execution in the modern world. With it, companies can stay within the competitive curve.
In other words, TMS software is a control tower that oversees the entire shipment process. It does everything, from capturing data in real-time using EDI and API technology to automatically generating bills of lading, creating shipping labels, sorting tendering, and more.
Key Features and Functionalities
As the above would suggest, this software category boasts many features and functions worth exploring to understand the full extent of its power. Some of the core qualities are as follows:
- Order management — There are two primary functions in order management: order entry and order overview. The former can be manual or automatic and includes filling in essential details, such as commodity, weight, location, and destination. The system then generates a route, assigns transport, and sets ETA. The latter shows created orders to planners and drivers on a seamless dashboard, allowing them to manage their day’s workload.
- Tendering — Most high-quality TMS software tenders shipments automatically. Carrier lists are organized so users can access the vendor according to predetermined parameters or let the system assign carriers. The majority boast many tendering methods, commonly status, broadcast, and waterfall. Some offer auto-award, least-cost, service-based allocations, and other tendering strategies.
- Shipment rate management — This is unarguably one of the most crucial elements of a TMS. A rate engine calculates the transportation rates for the truckload, parcel, intermodal, or LTL shipping based on specific rules (i.e., base rates, contract agreements, and discounts). The best transportation management systems craft custom pricing rules to allow for complex tariffs and the automatic sending of client quotes.
- Load planning — The load planner lets freight companies plan the loading space inside containers, trucks, and trailers. The software considers the maximum loads and weight, instantly calculating the free loading space. Users must input vehicle measurements once and save them for future reference. Some systems come with a 3D load plan feature, allowing professionals to see the cargo distribution in the space.
- Fleet management — TMSs let fleet managers see all their assets in one place. Not all transportation management systems come with advanced fleet management features, but even the most basic boasts the ability to assign drivers, select equipment, manage dispatch, and deal with financial settlements for drivers. Those with dedicated fleet management integrations offer fuel consumption control, environmental impact, and tracking maintenance activity.
- Dock scheduling/yard operations — Shippers typically spend their days scheduling dock appointments, while drivers waste time sitting in a queue. However, integrating a TMS with a yard management system or WMS ensures automated dock scheduling and load sequencing for boosted efficiency and workflow. It collates all warehouse and transportation constraints in one place, affording workers more accurate schedules. This key feature proves particularly beneficial for freight companies looking to boost their customer service, as load statuses are always available.
- Documentation management — Transportation is a paperwork-heavy process. However, TMSs let companies automate many aspects, including invoice creation, digital bills of lading generation, shipment label production, and freight auditing conduct. Streamlining billing and invoicing is a significant pain point for many freight businesses, but modern transportation management systems eradicate it through automation.
- Connectivity portals — Most TMS software connects customers and partners via email. However, higher-end solutions go a few steps further, allowing users to customize self-service portals. In other words, companies can allow their customers to create and view their order statuses while they publish tender offers and review/submit invoices.
- Tracking and tracing management — The latest track and trace tech lets companies track the movement of items in real-time, eliminating the need to contact the driver to discover the truck’s location. This feature typically gives customers accurate information on their shipment location and for scheduling and security purposes. For the function to work, a telematics device inside the truck/on the driver’s smartphone links to the TMS via GSM, UMTS, or GPRS.
- Analytics and business intelligence — Alongside real-time tracking, TMS software offers real-time analytics and a range of custom reports for management professionals to generate. Professionals tend to use them to monitor various performance indicators and make informed decisions that improve operational workflows and enhance profit margins. Providing businesses utilize a top-notch TMS provider; the BI capabilities are limitless.
Addressing Common Challenges in Freight Management
When TMS software is implemented effectively, the features mentioned above work wonders to address the top four common challenges experienced in freight management:
#1 Coordinating Shipments
The supply chain is more globalized than ever, necessitating cross-border international shipment coordination. However, this is easier said than achieved due to the ever-changing local regulations, language barriers, and complex international customs procedures.
Advanced carrier TMS software applications automatically consider the above, smoothing the otherwise arduous carrier coordination task and ensuring freight is moved on time and within budget.
#2 Visibility and Tracking
Companies are increasingly struggling to keep up with shipments due to the need for accurate tracking information and visibility throughout the supply chain.
Tackling the issue requires a high-quality transportation management system that utilizes IoT telematics to allow users to see the progress of their shipments in real-time. With this to-the-minute information, they can make decisions to prevent delays or other problems.
#3 Customer Service
Titans like Amazon have made people incredibly impatient when waiting for deliveries — if it isn’t fast, they aren’t happy. As such, freight operators are under even more pressure to provide timely, responsive services, regardless of where their customers are located. And with that, the need for a reliable technological solution like TMS software becomes obvious.
#4 Documentation
Depending on customs and the type of goods, a slew of documentation may be needed. Whether it’s permits, clearances, pro forma invoices, certifications of compliance, or something else entirely, the manual creation of such paperwork needs to be revised and more manageable. Luckily, TMSs shine in this situation, automating the generation of necessary documents.
Benefits of Implementing TMS Software
The benefits of implementing TMS software are plentiful due to the innate breadth of the platform. However, the top three are easy to discern. They are as follows:
Improved Operational Efficiency
It’s no secret that freight operations are complex processes. Thus, efficiency is the ticket to long-term success — and TMS software helps carriers achieve that by:
- tracking shipping lifecycles
- optimizing routing
- aligning dock scheduling
- reducing human error through documentation, label, and fulfillment automation
- improving warehouse productivity
The more businesses take advantage of all the features provided by TMS solutions, the greater the efficiency-improving benefits become.
Enhanced Visibility and Tracking
TMS software makes transparency across the entire supply chain a reality. It combines all process data into one place, giving companies previously unachievable levels of real-time access, thus allowing them to recognize and act upon possible pain points promptly and effectively.
Likewise, the solution provides to-the-minute shipment tracking, allowing organizations to make necessary adjustments to avoid service outages. The software automatically calculates the route time, developing more realistic schedules.
Real-Time Data Insights for Informed Decision-Making
Similarly to the above, transportation management systems give companies real-time data insights about every supply chain section. No stone is left unturned, giving leaders the best chance of making value-adding organizational decisions. Today’s industry competition is fierce, and only those who can stay ahead of the curve will remain afloat.
How to Select the Right TMS Software
Deciding on the perfect TMS software is essential to achieve the desired effect. As such, leaders should pay close attention to the steps set out below to increase the likelihood of making the best choice:
- Consider current technology environment — TMS software must integrate with current technological capabilities to be effective. Assessing present capabilities and future needs ensures that companies know the features they should look for in their TMS. For example, companies already invested in a CRM may not need a one-stop-shop-esque transportation management system. Helpful questions to ask at this stage include:
- How old is the current system?
- Are they sustainable?
- Does the current system already include reporting platforms or CRMs?
- What are the positive and negative sides of the current system?
- Decide the budget — TMS platforms can be costly, especially when custom solutions integrate with standard features. While the improvements gained are worth the price, it’s still important to consider the maximum investment to avoid going over budget. This should include the total cost of ownership.
- Define goals — Outlining goals for the new transportation management system creates a checklist by which companies can evaluate each vendor. Plus, it ensures budgets aren’t wasted on less-than-satisfactory software. Some benefits or goals may include:
- boosted visibility
- bottom-line savings
- time savings
- transaction automation
- top-line growth
- efficiency improvements
- Ask questions — When evaluating providers, companies should ask as many questions as possible to ensure their needs are met. The easiest way to do this? Create a list of queries in advance. While the specifics may vary from business to business, the most crucial include:
- Will the TMS work for the type of freight moved?
- How much time can the system save?
- What systems does it integrate with?
- How are updates handled?
- What ROI can be expected?
- What sets the provider apart from the rest?
8 Factors to Consider
A comprehensive checklist of all the features/functions desired is essential to ensure the right software is purchased. Companies should use the following as a guide for everything high-quality applications offer:
#1 Custom Options
There’s rarely a one-size-fits-all option where freight operations are concerned, and TMS software is no different. Companies should examine the customization options of their preferred logistics service providers to ensure the platform will genuinely enhance workflows and operations rather than hinder them. In other words, it must be flexible to support and improve business requirements.
#2 Automation
Without automation, TMS software becomes nothing more than a cumbersome spreadsheet collector. Therefore, an automated solution is essential for efficiency and workflow optimization.
Many elements of freight operations can be automated with the right logistics platform, including:
- alerts
- document generation
- ELDs
- geofencing
- tracking
- load board integrations
- emails
- settlements
- and more
Some advanced options provide point-and-click facilities to build workflows on the go — no coding required!
#3 Centralized Communication
TMSs must facilitate team collaboration by gathering all communications in one easy-to-use place. Integrated messaging must be involved in every workflow, ensuring visibility for teams and customers.
The integrated messaging platform should offer supreme functionality, making it the “record of truth” for all business communication. In-use email servers should easily integrate with the software for best results.
#4 Mobile Access
The chosen TMS should offer role-based profiles to provide every staff member with the system and data they need to conduct and execute their core responsibilities. Setting up permissions and access hierarchies is an integral but easily overlooked part of a transportation management system. It is one of the most crucial aspects to consider when choosing the best transportation services vendor.
#5 Billing Capabilities
Companies don’t have the same billing methods or types. Therefore, the TMS software must have fully functioning billing capabilities to suit the company’s specific transactions. Most platforms offer a wide range, but checking before committing to a single solution is always best.
#6 Flexibility and Scalability
Some providers have gated models with limited functionality and a set user number, forcing businesses to move to the next bundle for full functionality. To avoid this, businesses should look for comprehensive TMS solutions with unlimited users at zero extra cost and immediate access to all the features.
#7 User-Friendliness
Transportation management system software must be easy to navigate, boasting an intuitive user interface. After all, it’s a near-useless addition if those who need to utilize it can’t get to grips with the platform!
Additionally, the interface should be customizable to the needs of the business, with various built-in features that simplify daily operations.
#8 Vendor Reliability and Support
A TMS is only as good as its development team, so reliability and support are significant factors to consider when choosing the perfect solution. The software deserves high marks if the developers offer more than code customizations.
Customer service teams should be responsive to comments and concerns, incorporating relevant improvements into their system upgrades.
Implementation and Integration
Choosing the software is only part of the deal. Companies must also implement and integrate the desired TMS solution appropriately. Follow the recommended steps to ensure businesses avoid poor adoption and reap the system’s full benefits.
7 Steps for Implementing and Integrating TMS Software
- Create an implementation team comprised of employees from wide-ranging backgrounds.
- Make a plan with clear objectives and goals to ensure the investment pays off.
- Use the factors above as a checklist to evaluate the various TMS platforms on the market.
- Spend time demoing the platforms to analyze the various functionalities each offers.
- Carefully plan the transition, offering sufficient training to combat the poor adoption potential.
- Prioritize integration requirements.
- Allocate staff before going live to offer users plenty of support during the initial rollout.
Security and Compliance Considerations
Both data security and industry compliance are imperative in the logistics industry. As the sector becomes increasingly complex, businesses can only remain abreast of all the information if they employ a technological solution.
Ensuring Data Security
Cybersecurity is an increasingly important aspect of any software adoption. As such, the best TMS platforms offer a wealth of security-enhancing facilities, including:
- Data encryption during transit and at rest
- Intricate access control and authentication
- Data anonymization and pseudonymization
- Data and activity auditing and monitoring
Complying with Industry Standards and Regulations
Compliance is critical. Businesses must comply with regulations and laws surrounding vehicle maintenance, driver hours, documentation, and qualifications. TMS software helps companies remain compliant by automating the process of document generation and driver hour tracking.
Overcoming Challenges in TMS Adoption
Even the best-laid plans can go awry — and adopting TMS software is no different. Thankfully, those who realize the potential for things to go wrong can take proactive measures to prevent the struggles from happening.
TMS Software Hurdles and Solutions
| Challenge | Solution |
|---|---|
| Limited/No integration with current systems | Ensure the TMS software is compatible with other systems used in the company. Custom integrations may be necessary. |
| Employees are resistance to change | Involve employees in the implementation process. Demonstrate benefits of utilizing the new system. Offer incentives/rewards for system utilization. |
| Users don’t understand the new system | Provide sufficient training and support through online tutorials, helpdesks, and in-person training sessions. |
| Initial investment cost | Look at scalable solutions for gradual implementation. |
The Growing TMS Use Trend
TMS software use has seen exceptional growth since 2013. However, during the pandemic, things really kicked up a gear, as cloud-based transportation management system solutions made it possible for people to transition to remote work without noticeable disruptions. And this is only set to continue as the popularity of autonomous and connected vehicles keeps booming.
The World Economic Forum noted that digitalization in logistics could unlock a whopping $1.5 trillion by 2025, spurring an ever-growing 35% of businesses to use the platform for transportation network management.
Those who’ve implemented the software have reported shipping cost savings of 5% to 15%, thanks to the automation and optimization of loads, rates, and modes. Plus, teams have spent 75% to 85% less time managing loads and assigning loads after implementing a TMS.
TMS Software Success Stories
It’s no wonder TMS software is witnessing supreme growth — industry titans have nothing but praise for the application!
The finance director at AW Jenkinson Transport notes, “The facility is leading to definite benefits in improved load allocation,” and the managing director at TWE Haulage says, “We can now invoice straight away, increasing cashflow by four or five days.”
Likewise, Jenny Hill from Jentone Freight mentions they’ve ” achieved many things we could never have achieved with paper-based systems.”
Future Trends in TMS for Freight
Today’s TMS software is already brilliant, but the advancement is only set to gain pace, with a few of the following trends expected to appear in the near future:
- Optimized visibility advancements will bring even more accuracy to real-time shipping information. Couple that with IoT telematics. This trend will help reduce delays, boost supply chain efficiency, and detect inefficiencies early.
- Unprecedented security is set to come to such applications thanks to the increased use of end-to-end data protection, transparency measures, and role-based access controls.
- Inter-management collaboration is a fast-approaching trend for the industry, with TMSs boosting communication to achieve higher ROIs and lower shipping rates.
Transportation management software can transform freight operations and future-proof businesses of all shapes and sizes. Whether companies desire basic features or the most advanced capabilities, there is a carrier TMS software solution to suit them.
