What Is a Transportation Management System? – Important and More

transportation management system

What Is a Transportation Management System?

A transportation management system (TMS) is a logistics platform that uses technology to help businesses plan, execute, and optimize the physical movement of goods, incoming and outgoing, and making sure the shipment is compliant, proper documentation is available. This kind of system is often part of a more extensive supply chain management (SCM) system.

Sometimes known as a transportation management solution or transportation management software, a TMS provides visibility into day-to-day transportation operations, trade compliance information and documentation, and ensuring the timely delivery of freight and goods.

Transportation management systems also streamline the shipping process and make it easier for businesses to manage and optimize their transportation operations, whether by land, air, or sea.

In addition to transportation management, other components of a typical SCM system include procurement, product lifecycle management, supply chain planning, order management, manufacturing, inventory, and warehouse management.

Why It’s Important to Have a Transportation Management System?

  1. Transportation management systems play a central role in supply chains, affecting every part of the process—from planning and procurement to logistics and lifecycle management.
  2. A robust system’s broad and deep visibility leads to more efficient transportation planning and execution, which results in higher customer satisfaction.
  3. That, in turn, leads to more sales, helping businesses grow. With such a dynamic global trade environment that we live and transact in, it is important to have a Best document management systems that will allow you to navigate complicated processes around trade policies and compliance successfully.
  4. In today’s world of same-day shipping and real-time tracking, consumers expect to get what they want, when they want it. Keeping up with this demand puts unprecedented pressure on traditional businesses, and nowhere is being felt more keenly than the supply chain.
  5. The physical movement of goods is a critical link in that supply chain, and more and more businesses are relying on transportation management systems to help them manage this function.

Who Uses a Transportation Management System?

Transportation management systems are primarily used by businesses that need to ship, move, and receive goods regularly, including:

Companies that provide logistics services, such as third-party and fourth-party logistics (3PL and 4PL) companies and logistics service providers (LSPs)

Businesses in nearly every industry, from construction to life sciences, use a transportation management system. The primary users are businesses that spend $100 million or more annually on freight.

Still, the availability of cloud-based TMS solutions has made it more affordable for smaller firms to take advantage of the benefits of incorporating a transportation management system into their supply chain.

Offerings of Transportation Management System

Businesses can buy a standalone transportation management system integrated with their existing cloud or on-premises enterprise resource planning (ERP) software and SCM solutions.

Some TMS solutions have trade documentation capabilities, or you can complement your TMS with a global trade management (GTM) application. Other, typically less feature-rich TMSs, are available as modules within ERP and SCM suites.

Plan, Execute and Optimize for Timely Delivery of Goods

A TMS can help any business plan, execute, and optimize the physical movement of goods.




The Benefits of a Transportation Management System

A TMS—and modern transportation management in general—provides many benefits to businesses. Some of the top services are:

The Added Value of a Transportation Management System in the Cloud

Transportation Management System and the Smaller Business

The Future of Transportation Management System

Customer expectations keep rising, not only for on-time deliveries but also for two-day and even same-day deliveries, with real-time updates throughout the shipment process.

Over-changing global trade regulations also force supply chains to innovate to keep pace, often by investing in a transportation management system.

Transportation management systems must become more robust and feature-rich, providing faster responses to consumers and more detailed information to businesses. And also, machine learning enables TMSs to be more intelligent, providing better recommendations and accurate predictions.

Companies can choose to integrate their transportation and global trade management systems with emerging technologies to improve visibility further and offer better customer service. And also, some of these innovative technologies that are currently available include:

1. IoT Fleet Monitoring

2. Digital Assistants

Digital assistants are often called chatbots and offer immediate, conversational responses to shipment information, leading to higher customer satisfaction.

3. Adaptive Intelligence and Machine Learning

4. Blockchain

5. Cold Chain Management


A transportation management system, or “TMS,” is a platform that’s designed to streamline the shipping process. It is a subset of supply chain management concerning transportation solutions.

A TMS allows shippers to automate the techniques they have in place. And also, receive valuable insights to save time and reduce spend on future shipments.

Also Read: What is the Sales Team? – 12 Tips for Running, and More

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