Transportation Management Software

WHAT IS A TMS?

A Transportation Management System (TMS) is a comprehensive digital solution that allows businesses to plan, execute, and optimize the physical movement of goods. 

A transportation management system (TMS) is an end-to-end software that helps businesses manage their logistics and streamline their shipping. By reducing complexity and connecting all the players in your logistics ecosystem, it simplifies the different stages of the supply chain processes, capturing them in one tool.  TMS solutions are one of the core technologies used in supply chain management today, having gained greater traction in the past decade. Gartner predicts an accelerated growth at least until 2025.

Traditionally, businesses have relied on manual processes – such as Excel sheets, phone, and email -- or several independent software solutions to manage their logistics. For example, some shippers used a warehouse management system that follows items until they leave a dock. They then had a tracking system, provided by a carrier for each mode and each stage of the journey. However, this piecemeal approach leads to a highly complex and disjointed view over the process, where a single miscalculation can result in significant loss of time and decreased customer satisfaction. This simply doesn’t cut it in the 21st century.

TMS solutions are primarily used by businesses that need to ship, move, and receive goods regularly, including manufacturers, distributors, e-commerce and retail businesses, and logistics providers (3PL and 4PL). In most cases, TMS solutions can be integrated with existing cloud-based or on-premise ERPs and Supply Chain Management (SCM) solutions to provide a broader overview of the business's processes and supply chain.

Why is a TMS Important?

Transportation management is a vital element in the broader supply chain management framework involving the movement of goods from the point of origin to the destination. Today, businesses face unprecedented complexity in logistics operations driven by increased customer demands, diverse transportation modes, regulatory requirements, and the rise of global trade. A TMS plays a central role in helping companies navigate these complexities by enabling them to manage, optimize, and gain visibility into their logistics operations effectively.

A TMS brings efficiency to an organization’s logistics network by enabling a centralized system where transportation planning, freight rate management, carrier selection, execution, and settlement activities can be optimized. The use of TMS is not just about reducing costs but about ensuring efficient resource allocation, end-to-end visibility, customer service excellence, and sustainability goals.

Evolution of TMS: From Operational Tool to Strategic Asset

Initially, TMS solutions were developed as a tool for managing shipments and executing freight more efficiently. They focused primarily on basic routing and scheduling functions. However, as supply chains have evolved, the capabilities of TMS have significantly expanded. Today, TMS solutions play a strategic role, providing advanced analytics, real-time visibility, predictive insights, and the ability to manage multimodal and global logistics networks.

With the advent of technologies like Artificial Intelligence (AI), Internet of Things (IoT), and advanced cloud-based platforms, TMS has moved from a mere transactional system to a powerful strategic asset that enhances decision-making, drives down costs, and creates value by optimizing logistics across the entire supply chain.