Transportation Management System: What is a TMS in Logistics?

Key Takeaways:

• Transportation is essential for successful supply chains, requiring delivery planning, carrier management, and shipment tracking.
• Automation in supply chain activities decreases human error while increasing efficiency.
• A Transportation Management System (TMS) is required for managing complicated logistical activities.
• TMS logistics improve visibility and efficiency in transportation planning and execution.
• TMS can help businesses of all sizes, particularly as cloud-based solutions become more prevalent.
• A TMS's key capabilities include load planning, freight tracking, and actionable reporting, but they involve many more functionalities and benefits.
• TMS logistics' future will include modern technologies like as IoT, AI, and blockchain to improve customer service and efficiency.

‍

The supply chain process consists of three basic components: manufacturing, warehousing, and transportation. Transportation encompasses a wide range of activities, including:

‍

• Delivery planning
• Carrier management
• Shipment tracking

‍

All these components should be organised flawlessly and, ideally, should be automated at least to some extent to minimise the risk of human error and maximise the efficiency of your supply chain. 

‍

Micro-scale companies with a low number of shipments can manage these processes using spreadsheets and phone communication. But, once the number of your shipments starts to scale up, it becomes clear that spreadsheets and phone calls are insufficient. Thats when you require something more powerful to manage your supply chain and have streamlined operations. 

‍

In other words, you need to invest in TMS logistics, aka a Transportation Management System. 

‍

What Is a TMS Ligistics?

A TMS platform employs technology to assist companies in planning, executing, and optimising the physical movement of products, both incoming and departing. It also makes sure that the shipment is compliant and that necessary documentation is accessible. Typically, a TMS platform is a type of system that is a component of a larger SCM (Supply Chain Management) system.

‍

Automating TMS logistics via transportation management software gives visibility and insight into day-to-day transportation operations, trade compliance data and documentation while ensuring goods are delivered on time and to the right destination. TMS logistics provide streamlined operations and shipping processes, allowing supply chain companies to better manage and optimise transportation, whether by land, air, or sea.

Why Streamlining TMS Logistics Is Important? 

Transportation management systems are critical in supply chains, influencing each and every stage of the supply chain process, from planning and procurement to logistics and lifecycle management. 

‍

It allows for broad and deep visibility and enables more effective transportation planning and execution, resulting in improved customer satisfaction. This, in turn, leads to more sales and optimised customer retention, fueling business growth.

‍

Modern companies, especially large ones that rely on solid supply chains, must invest in automated TMS logistics to successfully manage complex processes, including trade policies and compliance.

Who Should Invest in TMS Logistics?

A TMS platform should be utilised by businesses that need to regularly ship, move, and receive commodities. These most typically include: 

‍

• Manufacturers
• Distributors
• E-commerce companies (like an ecommerce fulfillment warehouse, for instance)
• Retail businesses
• Businesses providing logistics-based services, such as 3rd-party fullfilment and fourth-party logistics (3PL and 4PL), and logistics service providers (LSPs)

‍

A transport management system is used by businesses in basically each and every known industry. The major customers are enterprises that spend $100 million or more on freight each year. However, the emergence of cloud-based TMS systems has made it more inexpensive for smaller businesses to reap the benefits of integrating a transportation management system into their supply chain.

‍

Key Functionalities of Using a TMS Platform

Using TMS logistics involves, but is not limited to, the following basic functionalities: 

‍

• Load Planning
• Load Execution
• Freight Tracking
• Payment
• Actionable Reporting

Load Planning

Shippers can use a TMS to conveniently locate pricing, plan routes, and select carriers. As a TMS platform optimises each cargo using complicated algorithms, shippers save time and money both on the front end and throughout the shipping process.

Load Execution

A TMS platform automates the freight tendering process by using the shipper's routing guide to digitally tender loads to the appropriate carrier at the predetermined rate. Instead of shippers manually measuring carrier capacity, rate acceptance, and performance before dispatching carriers, automated TMS logistics enable sorting through a massive quantity of data and speed up the freight booking and tendering processes.

Freight Tracking

These systems collect and consolidate extensive tracking data while recording a shipment's movement throughout its entire lifecycle, from warehouse to final destination. This allows shippers to receive real-time freight data, as well as track and measure carrier performance.

Payment

A TMS platform enables businesses to automatically audit each carrier invoice and conveniently pay carriers. It allows for simplified and streamlined operations when it comes to the payment process and does it for both shippers and carriers by giving access to freight audits, invoices, payments, and cost performance metrics.

Actionable Reporting

TMS logistics reporting provides detailed data on shippers' networks and facilities, as well as performance insights for future planning. It allows extensive data monitoring and analyses so shippers can build continuous improvement plans to decrease wasteful expenses, increase service levels (e.g., on-time pick up and delivery), and analyse overall cost reductions.

‍

The Benefits of Having Automated Transportation Planning Features

The very first phase of the transportation procedure involves the creation of a transport request, which includes the quote and shipment information. Shippers tender loads to carriers, who then plan capacity and freight distribution. An impeccable transportation planning process is critical if you want your clients to get the service you promised them. 

‍

This is why order management, tendering, and shipment rate management are critical. 

‍

Order Management

When you use automated TMS logistics, order information is accessible to all parties involved, including planners, drivers, and customers. The functionalities that allow users to examine and handle transport requests include: 

‍

Order Entry: Order entry, whether manual or automatic, entails entering all necessary information (think: commodity, weight, etc), as well as determining the present location and destination. A system frequently generates a route, assigns transport and driver, and calculates ETA. If you have an integrated WMS, this order is automatically routed to the scheduled transport.

‍

Order Overview: Order planners and drivers can have a clear view of their daily workload (typically available to them via a dashboard) that includes created orders, routes, and allocated transports. All documents are automatically linked to the respective orders, allowing the driver to have them easily accessible on their smartphone or tablet. Drivers update the status of orders en route, giving planners an overview of all scheduling modifications and truck positions.

Tendering

Typically, a TMS platform can automatically tender shipments for you. The list of carriers is organised so that you can always find a vendor based on your specific criteria or let the system choose a carrier for you. Most systems have three tendering methods: broadcast, waterfall, and status. 

‍

Certain TMSs employ the following tendering strategies:

‍

• Minimised costs - opting for the lowest rate and expanding this offer to other carriers
• Auto-award for shipments that are always assigned to specified carriers.
• Allocations when using contractual percentages or by the load numbers (four numbers to Carrier A and three to Carrier B),
• Opting for the best-performing carrier according to their service rating 
• Deploying a customer-centric approach while selecting a preferred carrier

‍

Shipment Rate Management

A rate engine is a critical component of the TMS logistics. A rate engine sets transportation prices for package, LTL, truckload, and intermodal shipping based on regulations such as base rates, discounts, and contractual agreements. A TMS should be able to generate bespoke pricing rules to suit the most complex tariffs and automatically provide quotes to clients when they make requests.

The Most Tangible Benefits of Automated TMS Logistics

Automated TMS logistics management, in general, offers a myriad of advantages to both large enterprises and smaller companies. Some of the major benefits include but are not limited to the following:

‍

• Minimised costs for the business and the end user
• Simplified supply chain processes and streamlined operations across regions, modes, and carriers.
• Automating business activities for faster and more accurate billing and documentation.
• Improved visibility and security, particularly in transportation (like line haul, for example).
• Time savings (mitigating extra manual steps leads to fewer delays and faster delivery timeframes.
• The capacity to track goods locally and globally on a single platform.
• Improved import and export compliance, reducing penalties and shipping delays.
• Better reporting leads to faster response and process improvement, yielding new business insights.
• Improved customer service and satisfaction with real-time updates and fewer shipment delays.
• Maximised scalability by meeting and exceeding consumer standards for speedy, on-time deliveries

‍

How Cloud-Based TMS Logistics Add More Value 

A cloud-based transport management system provides numerous commercial benefits, such as increased economies of scale, lower total cost of ownership, no upgrade fees, and faster return on investment (ROI).

‍

There are also additional IT-related benefits, including faster deployments, fewer hours required for training and installation, automatic updates with the most recent capabilities, and improved security.

‍

What Does The Future of TMS Logistics Looks Like?

As client expectations continue to rise, customer satisfaction and optimised customer retention become that much more difficult to achieve. This is especially true for on-time deliveries, as well as two-day and same-day deliveries, with real-time updates available throughout the shipment process. With the ever-changing global trade standards, supply chains are prompted to adapt in order to keep up, which is now typically done by investing in TMS logistics. 

‍

A TMS platform must become more powerful and feature-rich in order to respond to customers faster and provide businesses with more detailed information. Modern technologies based on Machine Learning and Artificial Intelligence enable TMS platforms to become more intelligent, making better recommendations and predictions and providing more actionable business insights.

‍

Companies are now combining their transportation and global trade management systems with emerging technologies to increase visibility and provide better customer service. 

‍

Some of the unique technologies that are now available include:

‍

IoT Fleet Monitoring

Real-time fleet monitoring is already ubiquitous thanks to Internet of Things (IoT) devices and sensors, which provide in-transit awareness of driving conditions, routes, and assets. Companies can save money on gasoline and maintenance while also reducing delays and improving driver safety.

Digital Assistants

Chatbots, or digital assistants, provide rapid, conversational responses to shipment information, increasing customer satisfaction and significantly reducing the costs of customer support processes.

Adaptive Intelligence and Machine Learning

Transportation management systems can better anticipate transit time, plan capacity, identify at-risk shipments (such as commodities about to expire and time- or temperature-sensitive products), and do a variety of other tasks by applying machine learning to past data and patterns. Enhanced artificial intelligence will also allow your TMS to make more accurate and educated recommendations, such as alternate delivery routes during peak traffic times.

Blockchain

Blockchain technology is now being used to create complicated interfaces between shippers, clients, and carriers. Intelligent track and trace applications improve transparency and traceability throughout your supply chain while also ensuring accurate and secure data.

Cold Chain Management

Another blockchain option available in modern TMS logistics is cold chain management, a crucial aspect of the transportation process when different temperatures must be maintained at various checkpoints along the supply chain. For example, perishable or temperature-sensitive materials and products may require a cool temperature during truck transport but a slightly higher temperature on store shelves. With cold chain management, temperature may be monitored throughout the supply chain, with real-time data sent to the business and regulators in the nation of origin.

‍

Streamline Logistics Planning With Bezos 

‍

Whether worldwide or local shipping logistics, dealing with all the complexities that are involved with these convoluted processes can be quite overwhelming; this is why implementing TMS logistics has become a necessity. Luckily, hiring third-party companies like Bezos enables numerous benefits and allows SMEs to take full advantage of these systems and expand globally. 

‍

Our platform, created with your growth in mind, combines scalability, transparency, and cost-effectiveness. It was previously reserved for larger enterprise-grade companies but is now available to businesses of all sizes.

‍

Bezos simplifies international shipping processes by providing a broad spectrum of services ranging from inventory management to final-mile delivery. This comprehensive strategy ensures that your items are not just moved but precisely handled at every stage of the supply chain. Whether you're a UK brand looking to expand into worldwide markets or an Australian company looking to enter the European market, partnering with Bezos will help you achieve these goals, both long-term and smaller, incremental ones. 

‍

Bezos guarantees that your logistics are based on efficient, streamlined operations and a customer-centric approach. 

‍

How?  

‍

We do it by leveraging our global network of 63 fulfilment centres across 16 countries, including crucial sites in the following countries: 

‍

• United Kingdom
• Europe
• Australia
• New Zealand
• United States
• Canada

‍

Our innovative technology delivers real-time visibility into your logistics operations, allowing you to make faster and more accurate data-driven choices.

‍

Our focus extends beyond logistics as we recognise how critical client experience and customer satisfaction are. As a result, we ensure that logistical services are integrated in a seamless manner, meeting and exceeding customer expectations. From expedited customs clearance processes to easy returns and exchanges, we make sure that your business has a dependable foundation that meets strict logistical needs and adds to an outstanding customer experience.

‍

As you traverse the intricacies of global markets, consider Bezos as a partner who stands ready to support your every strategic goal. 

‍

Get a free quote today and take advantage of Bezos’ expert service and advice on logistics automation and unlock all the benefits of TMS logistics and streamlined operations with better customer satisfaction today! 

‍

FAQs

What Does TMS Mean in Logistics?

A transportation management system (TMS) is a software system that assists businesses in managing logistics connected with the actual movement of goods over land, air, sea, or a combination of modes.

‍

What Is TMS in SAP?

You use the Transport Management System (TMS) to design and maintain your system landscape. It includes tools for customising your system landscape, as well as organising, executing, and monitoring transports. A transport domain includes all SAP systems that are administered by the TMS.

‍

What Is TMS in DHL?

A Transport Management System, or TMS, is a platform meant to streamline the transportation process. The TMS enables shippers to automate their present logistics procedures and get insights, lowering operation costs and saving time on future shipments.

‍

What Is a 3PL TMS?

The acronym “3PL” stands for third-party TMS logistics. A third-party logistics company is one that businesses employ to handle their logistics. It consists of numerous issues concerned with the possession and performance of activities. In short, the role of 3PL service providers is to manage the supply chain.

‍