What A Transportation Management System Is and How It Can Benefit Your Business

The transportation management system (TMS) is a platform that is used for the smooth operation of the shipping process which includes planning, execution, and optimization. This TMS is a variant of supply chain management and offers a transportation solution. The TMS enables the shippers to automate the processes to reduce the time and spend on future shipments. All the companies that are involved in the movement of freight face problems in the shipping process. These problems are solved by TMS. 

The following three tasks are performed by the transportation management system.  

  • Find and compare the prices and services of the carriers
  • Booking of shipment
  • Tracking 

The main objectives of the transportation management system are given below.

  1. To improve the shipping efficacy
  2. To reduce the shipping costs
  3. To gain real-time supply chain visibility
  4. To ensure customer satisfaction

Businesses in every industry use transportation management systems for smooth business operations. The TMSs are used by businesses, which use to ship, move, and receive goods on a regular basis.  Following are major users of transportation management software.

  • Shippers and carriers
  • Manufacturers
  • Distributors
  • E-commerce organizations
  • Retailers
  • Wholesalers
  • Third-party logistic providers or fourth-party logistic provider companies and logistic service providers. 

Types of transportation management systems

Some of the transportation management systems focus on single-mode transportation but the majority of the systems support multimodal and intermodal transportation. 

  • Multimodal transportation system

In this type of MTS, a carrier that is single uses at least two modes of transportation and is responsible for fulfilling the terms of contact. It can also hire a subcarrier. Modes of transportation are Truck, rail, air, and sea. 

  • Intermodal transportation

Intermodal transportation requires more than one carrier and contract. This type of transportation gives shippers more control over carriers, prices, and modes of transportation. But this type of transportation makes shippers more responsible for managing the process.

Benefits of the transport management system

Supply chain management system is helped by transportation management systems because every part of the SCM process is affected by TMS from planning and procurement to logistics and life cycle management. Following are some of the benefits offered by the transportation management system.

  1. Automation of business operation which enables faster and more accurate billing and documentation
  2. Better compliance for import and export by minimizing penalties and shipment delays
  3. Reduction in the business cost and cost for the end customer
  4. Improvement in security and visibility especially in transit
  5. Simplification of supply chain processes
  6. Local and global tracking of freight on a single platform
  7. Mostly automatic processes but few manual means fewer delays and faster delivery time
  8. Its ability to scale the business by exceeding the customer demands like fast and on-time shipment
  9. Real-time updates and  fewer shipment delays increase the customer compliance

The customer expectation keeps rising even though the transportation system is providing on-time deliveries which can be the same day, two days, or within three days, and real-time updates provided throughout the shipment process. Trade regulations of the world are changing and forcing supply chains to innovate to keep pace by investing in the transportation management programs.

Transportation management systems are becoming more advanced and offering more features. These systems are also giving faster responses to the customers and more information to the business. Companies are choosing emerging technologies to further improve visibility and offer better customer service. 

You can buy a transportation management system that can also be installed into your already existing system or on enterprise resource planning (ERP) software and supply chain management system. By installing this software, boost your business. 

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