A transportation management system (TMS) helps businesses bring greater control, visibility, and consistency to transportation operations. By connecting transportation workflows with shipment data and analytics, a TMS can help manage costs, improve customer service, standardize processes, and support growth. Its value extends beyond day-to-day execution to continuous improvement, carrier coordination, and environmental performance. The following six themes explain these benefits and provide a framework for evaluating how a TMS aligns with an organization’s transportation needs.
Cost Management and Operational Efficiency
- Freight Cost Savings – A TMS supports benchmarking and year-over-year transportation-spend tracking. These capabilities help shippers evaluate freight savings, demonstrate return on investment (ROI), and justify the cost of the system.
- Automation – A TMS automates order processing, carrier assignment, tendering updates, and payment workflows. Combined with reporting and analytics for decision support, these capabilities can save time, improve productivity, and support business growth.
- Operational Efficiency and Cost Reduction – A TMS standardizes transportation processes and supports the assignment of freight to preferred carriers. Consistent processes and carrier execution help improve efficiency and reduce operating costs.
Visibility and Customer Service
- Data Visibility and Operational Control – A TMS provides visibility into carrier key performance indicators (KPIs), including on-time pickup and delivery, primary tender acceptance, and shipment updates, as well as load processing and network costs. Standard operating procedures (SOPs) and configured workflows support control over routing guides, mode selection, and carrier pricing.
- Customer Experience – A TMS supports proactive sharing of order status, carrier information, and estimated times of arrival (ETAs). Greater visibility throughout the order cycle helps businesses keep customers informed and improve their experience.
- In-Transit Visibility and Security – A TMS supports monitoring of freight location and activity while shipments are in transit. Available information can include current location, trailer temperature, and fuel levels, helping businesses monitor shipment conditions and support security oversight.
- Domestic and International Shipment Visibility – Many TMS providers support tracking of both domestic freight and international orders on a single platform. This capability gives users visibility across the transportation network through one login.
Standardization and Scalability
- Process Standardization – A TMS brings transportation-planning activities into a consistent workflow rather than relying on separate processes maintained by individual operating teams. Reporting helps identify deviations from that workflow and supports consistent execution.
- Scalability – A TMS supports companies preparing for growth over the next five years. Automation, standardized workflows, and data visibility can help businesses manage increased shipment volumes while limiting the need for additional resources.
- Cross-Network Process Simplification – A TMS supports standardized processes that can be applied across geographies, transportation modes, and carriers. These processes streamline order management, carrier execution, reporting, and analytics across the network.
Analytics and Continuous Improvement
- Reporting and Analytics – Some managed transportation providers draw on large transportation datasets to support benchmarking and spend analysis. The scope of available data varies by provider. This freight data helps shippers make informed decisions about transportation spending.
- Business Insights and Continuous Improvement – A TMS collects data throughout order execution to support carrier management, procurement, customer satisfaction, and operational decision-making. Reviewing historical results helps businesses adjust processes for future shipments and respond more quickly to improvement opportunities.
Carrier and Provider Support
- Shared Company Resources – A TMS provides a central database for company information, such as approved carriers, that can be shared across users. This shared access helps individuals identify available resources they might otherwise overlook.
- Third-Party Logistics Resources – A 3PL relationship may provide access to specialists in transportation planning, carrier management, engineering, continuous improvement, and freight audit and payment. Available expertise depends on the provider and contracted services managing complex supply chains, with expertise in load consolidation, mode selection, carrier management and relationships, engineering, Lean Six Sigma, and freight audit and payment. These resources should be considered when evaluating TMS providers.
- Carrier Management Support – TMS provider teams can help shippers establish and maintain an internal carrier-management function or outsource that function. Their data and experience support target-rate analysis, identification and onboarding of carriers, and structured carrier-management activities.
Environmental Performance
- Environmental Impact – A TMS helps businesses manage and track the environmental impact of transportation activities. Opportunities include switching from truckload to intermodal transportation, increasing units per load through consolidation, and reducing empty miles through better use of private fleets or underutilized fleet capacity. TMS providers can support calculation of these impacts as part of their service offering.
The strongest case for a TMS connects its capabilities to the organization’s transportation priorities: cost control, reliable execution, customer visibility, scalable processes, and continuous improvement. Vendor selection should therefore begin with documented needs that distinguish mandatory requirements from desirable capabilities. Providers that meet the mandatory requirements can then be compared through weighted scoring, with cultural fit and strategic alignment considered alongside functionality. A data-supported decision links the benefits described above to the organization’s operating needs and long-term direction, rather than simply selecting the provider with the longest feature list.
—Brandon Hamilton, St. Onge Company
