What is a Transportation Management System: Benefits, Features, and Main Providers

Transportation itself doesn’t generate revenue. But we can learn how to optimize it. For example, a common problem is underutilized freight capacity when trucks or shipping containers travel partly empty. Although there are several reasons for that, generally it stems from a lack of efficiency and automation: not using digital bills of lading, not having information about the vehicle’s load factor, or creating separate shipping orders for every product rather than consolidating them. Add to that having no idea where your product is and when it will be delivered or not knowing how well your carrier does their job. Basically, shippers, retailers, and logistics service providers may have only a very vague idea about their transportation process. It’s time to fix that.

What a Transportation Management System (TMS) is

The sought-after feature of TMS is its control tower capabilities, illustrated below. Overlooking the whole shipment process, a TMS control tower captures data about goods in real-time using API or EDI technology and thus provides its users with valuable data from manufacturers to distribution centers, through delivery, and to customers. This data can in turn be transformed into analytics on your supply chain performance, financial situation, and customer service issues. Which is where you start your optimization journey.

TMS receives data about the status of transported goods via API or EDI channels

There are two main user groups of TMS:

  • shippers, manufacturers, and distributors
  • third-party logistics providers (3PLs).

Vendors usually offer the same platform for both with some feature exceptions.

Essentially, a TMS allows you to plan and execute your shipment processes and have visibility over them. Such software is often modular, meaning that you can get different functions separately depending on your needs. Besides, your ecosystem of tools may consist of different modules of logistics management systems (LMSs), warehouse management systems (WMSs), and of course, TMS. Some features will interconnect with fleet management software as well.

Main TMS functions (planning, execution, and visibility) and corresponding processes within them

Vendors usually offer a wide collection of possible integrations to make sure you can freely connect to your WMS or ERP of choice. We will talk about those capabilities later. Now, what functions can you expect a TMS to cover?

Transportation planning features

Order management

Entering a transport order. Manual or automatic, order entering includes filling in all order details like weight and setting up current location and destination. A system often automatically assigns a route from preset routes, including which type of transport, vehicle, and even driver should collect it, and where and when to deliver. If you have an integrated WMS, this order automatically goes to its scheduled transport.

Order overview. Created orders with their routes and assigned transports are available to order planners and drivers on a dashboard that allows them to see their workload for the day. All documents are also automatically linked to their corresponding orders so the driver can keep them on their smartphone or tablet without using any paper. As drivers update the status of orders en route, planners have an overview of all scheduling changes and truck locations to apply changes to the schedule and expected time of arrival.

Tendering

  • least-cost, when it chooses the lowest rate and expands this offer to other carriers,
  • auto-award when shipments are always assigned to specific carriers,
  • allocations when using contractual percentages or by the load numbers (4 numbers to Carrier A and 3 numbers to Carrier B),
  • service-based when picking the best-performing carrier,
  • customer-based when picking the carrier that a customer prefers, etc.

Shipment rate management

Load planning

In SAP Load Planner, you can set up the load plan hierarchy and quickly relate to the items by color
Source:
SAP

Transportation execution features

Fleet management

Oracle Fleet Management has end-to-end support for fleet and asset management with driver education, CRM, and dispute management capabilities. Source: Oracle

Dock scheduling and yard operations

IntelliTrans TMS provides Dock Scheduling both as a part of their solution and as a stand-alone module

Transportation visibility features

Connectivity portals

Customer portal by MercuryGate TMS gives access to order details and shipping KPIs
Source:
MercuryGate

Route analysis

Tracking, tracing, and event management

Business intelligence and analytics

For example, you can get a performance analysis based on each carrier, product, or route, and then make informed decisions and optimize the underperforming route. Get the analysis of your costs filtered by transport mode, see what customers bring the largest volume, monitor the margin data, and improve the operational workflow.

Overview of the main TMS vendors

  • all transport modes coverage: land, air, sea, sometimes rail, and intermodal;
  • capabilities for different use cases from shippers to 3PLs;
  • subscription-based payment model;
  • cloud deployment;
  • a mobile app.

Now, what are the leaders and what do they offer?

Oracle Transportation Management (OTM) — complex and comprehensive

  • Business process automation capabilities
  • Optimization engine that finds you better rates and partners
  • Analytical dashboard with forecasts and milestone alerts
  • Fleet management and financial performance of your fleet
  • Automated payment and billing both for shippers and 3PLs
  • Optimized bid execution
  • A mobile app with interfaces for two different cases: private fleet drivers and third-party carriers
Watch a tour through the interface and features of OTM

If you’re up to the challenge, have the budget, and don’t want to be overwhelmed by choice, get the Oracle Transportation Management Cloud — an ecosystem of tools that will serve all your needs from complex routing to forwarding and brokering.

SAP Transportation Management (SAP TM) — undisputed choice for SAP users

  • Generating routing proposals
  • Synchronize sales and order scheduling
  • Managing driver resources in an interactive Gantt chart
  • Ensuring the safe transportation of dangerous goods
  • Automatically update freight documents
  • Advanced analytical dashboards running on SAP HANA.

MercuryGate — modular and beginner-friendly approach

Transportation Management — a classic TMS with customizable workflows, carrier compliance and contract management, EDI messaging, and global trade capabilities.

Transportation Planning — an optimization solution that integrates with carrier APIs or EDI to receive actual rate information, forecasting load, with robotic process automation capabilities, and custom logic and routing for advanced scenarios.

Visibility and collaboration — your Control Tower tool with supplier, customer, and carrier portals and agent delegation.

MercuryGate customer portal

Freight settlement — powering accounting, integrates with any financial system and performs complex claim documentation.

Business Intelligence — a complex analytics tool with embedded data warehouse that uses both internal and external data for insights and provides unlimited report customization.

On its website, MercuryGate offers an extensive knowledge base and training opportunities. You can also book a custom demo and use an ROI calculator to make sure their tools fit your needs best.

BluJay — easy to configure tools for the whole supply chain

Watch BluJay’s Transportation Management demo

BluJay has two TMS solutions:

Transportation Management for Shippers — a tool for managing your own freight that has a supplier portal and yard management capability, which is enough to provide visibility to you and your partners.

Transportation Management for Forwarders — software that automates the workflow and provides control over financial processes with standard integration with Sage ERP and an API ready to be integrated with any tool.

Besides, there are additional tools that can be purchased separately and freely integrated with one another:

LSP Platform — a combination of tools for logistics service providers that includes Transportation Management, Warehouse Management, the MobileSTAR app for drivers, Yard Management, and Customs Management.

Parcel solution — a complex multi-carrier tool that generates packing slips and labels, calculates shipping quotes, and provides carrier compliance.

MobileSTAR — a driver app that captures progress in real time.

DropShip — a tool for retailers for automated drop shipping.

Kuebix TMS — free option and many more

  • Track shipments
  • Compare rates
  • Book shipments online
  • Create shipping documents

The Business Pro version has all that plus:

  • Company-wide collaboration
  • Multiple users
  • CRM for carriers
  • Financial management
  • Analytics
Kuebix reports and analytics dashboard

When getting an Enterprise package, you get an integrated modular solution, which allows configuring your ideal TMS. Some of Kuebix modules include:

  • Dock scheduler
  • Yard manager
  • Order and route optimizer
  • Collaboration portals
  • Container tracking and so on.

Kuebix also has a long lineup of available integrations starting with Oracle, SAP, and Microsoft Dynamics and ending with QuickBooks, Sage, and WooCommerce.

The custom way

Another option is developing a custom TMS from the ground up. If you don’t have a reliable ERP or warehouse system to connect a TMS to, it makes sense to build exactly what you need instead of trying to combine different products on the market.

The road so far and ahead

Shippers, suppliers, and 3PLs must abandon paper-based processes not only to compete but to survive. And it’s not that hard when the technology is here:

Machine-to-Machine Communication — when logistics companies are connected, we get improved visibility, better performance and lower costs.

Localisation technology and RFID — vehicle and parcel tracking allows us to react to disruptions faster and generate greater efficiency.

Mobile access to customers — customer satisfaction depends on how much information they have about their goods.

We must consistently deliver on these expectations so we can integrate real innovation: robotics, driverless transport, and AI.

Being a Technology & Solution Consulting company, AltexSoft co-builds technology products to help companies accelerate growth.