What is Transportation Management System (TMS)? 10 Ways It Can Help Logistics Business

Transportation Management system or simply called TMS is a software used by logistic companies to perform various activities such as tracking freight route, updating location, sending information to the connected apps, pushing notifications to shippers’ and carriers, enabling customers and clients to know the status of the package, managing inventory, and invoices, etc.,

It’s simply an all-in-one cloud-based application that helps a wide variety of users like shippers, carriers, courier delivery services to perform their day-to-day logistics operations effectively.

Transportation Management System

Breaking the Myth, “TMS is only used by Big Companies”

There is a common misconception that Transportation Management System is only used by big companies and is not feasible for small transportation companies. This is totally wrong, TMS comes in different features that are tailored for small to medium companies too.

There are several TMS companies that provide training and support on how to operate their TMS and also design the workflow as per your need. The applications were also developed to run in various operating systems as well as mobile phones. They also come with features where you can integrate to other logistic company software.

Why Small Logistic Companies should start using Transportation Management System?

In order to stay in the competition and be ready to face growing factors such as globalization, increased customer demands, and digital transformation, Small logistic companies need to utilize technology for the growth of their company. By adopting technologies such as TMS, companies can move from conventional paperwork to automation thus reducing time and error, they can make better decisions by actionable data and meet customer expectations.

Top 10 Benefits of Using a Transportation Management System for Freight and Logistics Companies

Let’s take a look at some of the mainstream features of the Transportation Management system and how it improves logistic businesses.

1. Improved Connectivity

The number one feature of Transport management software is, it keeps everyone connected. To put it in a simple word, TMS has the ability to integrate between a shipper and freight systems. It can even be accessed by mobile phones and Tablets thus allowing everyone to stay notified about the status of the service.

For example, a freight company owner can find a suitable shipper to transport their freight, they can know the status of the no of trucks ready for dispatch, drivers can know their ETA on destination and customers can know the transit status of their courier.

2. Cost Reduction

A core aspect of a Transportation Management System is to reduce the excess time spent on doing tasks manually, whether it can be calling different shippers, freight bidding process, documentation, finding an efficient route, tracking fuel expenses and calling customers, etc., the chances of doing such multiple tasks can be tiresome and may also lead to human errors.

Investing in an efficient TMS can save time and resources and overcome such hurdles thereby reducing costs spent on doing things manually and also avoiding error rates.

3. Automation Of Work

TMS helps in automating various tasks such as sending updates regarding the location of the truck, estimated delivery time to the destination, generating invoices, and sending emails to the various connected apps.

4. It Creates a Repetitive Business for Shippers and Carriers

Having a TMS that is able to connect to the shipper and carrier creates a Win-win situation for both parties.

Due to the growing popularity, most shippers were adopting TMS in their day-to-day operations and they were also likely looking for a carrier who uses TMS. This is simply because they can save time, automate the process and share the freight information more effectively.

When a shippers TMS is able to connect with carrier TMS or vise-versa, both parties can communicate the details of the freight information effectively this initially helps them to build a business relationship and further helps them in making seamless load tendering process once a deal is made, and the shipment is successfully delivered, both parties can once again make a repetitive business.

5. Effective and Secure Means of Load Tendering Process

Tendering freight via the TMS system is not only time-saving but also secure. Imagine, the manual way of Load tendering process, where the shipper will contact several carrier companies and share the details of the freight to be shipped via phone calls, emails, or fax, Now, the carrier company have to look for a suitable truck that can ship the freight to the designated location. All these things take a lot of time and time in business equals money the more time you spend on such things it will cost you more money.

Moreover, there can be room for errors when load tendering takes place manually such as excess freight load or underutilized truckload, Incorrect location is shared or delay in payment processing, etc.,

Now consider a scenario where the shipper and the carrier company both uses a technology that can connect with TMS, When there is a freight ready to be dispatched the worker at the shipper location will send out the information of the freight to the carriers who use the TMS application.

Once a carrier is interested in the freight, they will bid for the job and then they will get to know about rates and quotation (tendering process) which needs to be confidential and at the same time need to be communicated insecure channels like EDC, all these objectives can be accomplished by using a TMS.

6. Better Shipment Tracking

TMS enables customers to track their shipment effectively which is one of the key features of the application. In a nutshell, it integrates with the GPS system of the truck and sends the data back to the shippers portal at regular intervals of time. Some TMS can even track the entire real-time location of the shipment.

So, whenever a customer wants to check their shipment status, they can simply enter the tracking code in the shipper’s portal and find out the location and estimated time they can receive the package. This is a great way to improve customer satisfaction

7. Provides Better Data

Data is one of the top reasons why logistic companies prefer using TMS. In today’s world, data is a quintessential part of a successful transportation business.

Take, for example, a shipper who uses TMS in their operations they can gather different types of data such as freight information, number of jobs completed by a driver, total expenses, distance traveled by truck, delivery success rate, and delay times, etc., now as an owner you can consolidate these reports By which companies can make a better decision, look for areas of improvement and streamline their operations more efficiently.

8. Provide Better Visibility on Managing Inventory

TMS also plays a significant role in planning and managing warehouse. By providing real-time data to your systems, you will get to know when a truck is going to get dispatched, or a shipment is going to arrive. So, you can manage the inventory in the warehouse accordingly. At the same time if you are running a small logistics company you will also get an idea of how much staff are required to work in the warehouse at a given time.

9. Single Channel for Invoicing and Payments

TMS is not all about tracking shipment and providing data, it also helps you in the financial aspect of the business. Normally, transportation companies have separate accounting software to take care of billing, invoicing, track payments, and payroll-related things. However, some Transportation management softwares comes with inbuilt features where they can take care of all these things.

10. A Chance to Help Truck Drivers Work more efficiently

Shortage of truck drivers is one of the concerning problems in the US trucking industry. According to the American Trucking Association, the industry needs 900,000 truck drivers to meet the rising demand.

In an article by smart-trucking.com there are various factors for driver shortages such as high turnover rate, lack of professional drivers, moving for a job that pays better, unfair pay and working conditions, etc.,

So, how can a TMS help in this? Well, with TMS you can do various things, you can track the number of hours a driver worked, total distance covered, successful delivery rate and you can offer better pay, you can tell the driver when it needs maintenance so that driver doesn’t get stressed out due to unexpected breakdown. Plus, you can calculate their performance and give them more responsibility so that they feel more interested to work. At the same time, the TMS tracking feature helps trucking companies to find out the best route to deliver the shipment so that, the drivers were aware of when they can finish the job and take their time-off.


Whether you have started a logistics company with a single truck or an established trucking company owner with hundreds of trucks, one must keep in mind, technology is growing at a faster rate there are new innovations coming into the market every day. And you must try to utilize the technology for better growth of the company and your employees than sticking to old methods. Today, it can be TMS, tomorrow it can be other technology, but the end result is, you need to be in the game as long as you’re running the logistics business.

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