Transportation Management Systems (TMS) are critically important today because they sit at the heart of supply chain execution—helping companies control costs, improve service, and build resilience amid unprecedented complexity in global logistics.
Transportation Solutions Overview
The value delivered from transportation solutions is heavily dependent on the environment in which it is being applied, as is the complexity required in a TMS. SCT typically segments transportation environments by some core requirements:
Shippers need a TMS to centralize operations, gain real-time visibility into shipments, reduce costs through optimized routing and carrier selection, and improve efficiency by automating tasks like rate comparison and freight tendering.
SCT works with shippers to identify the key requirements specific to their business, and scope, select, budget for, and implement the TMS to drive value across their business. Tangible results include:
- Improved freight spend and performance through carrier management and selection, optimized load planning and route efficiency
- Improved operational efficiency through automation of manual tasks
- Enhanced real-time visibility and tracking of shipments
- Clarity in international shipping status and global trade processes (though this may require multiple solutions)
- Streamlined and higher accuracy freight auditing and payment processes
LSPs need a Transportation Management System (TMS) to manage complex, multi-client logistics operations efficiently and cost-effectively by providing a unified platform for shipment planning, carrier management, real-time tracking, automated billing, and comprehensive reporting. They can be extended to differentiate client relationships with real time customer portals. Benefits include:
- Cost reduction through optimized routing and automation
- Increased efficiency via real-time visibility and automated tasks,
- Improved customer satisfaction with better service and reporting
- Enhanced scalability to manage growth and diverse client needs
Solution Areas
A Transportation Management System (TMS) is a supply chain software platform that helps companies plan, execute, and optimize the movement of goods—both inbound (from suppliers) and outbound (to customers). Key functions of a transportation management system include the following:
Provides real-time visibility of where shipments are, tracks carrier performance (on-time delivery, service levels), and sends alerts and initiates contingency planning if shipments are delayed. Automates freight bill audit and payment, ensures correct rates, accessorials, and surcharge
Selects the best carrier, route, and mode (truckload, LTL, parcel, intermodal, ocean, air), consolidates shipments to reduce costs by applying business rules to required shipment schedules and/or inventory replenishment needs.
Global trade helps businesses navigate the complexities of international commerce by automating and managing import/export processes, ensuring compliance with trade regulations, optimizing supply chain operations, and reducing associated risks and costs. These systems handle tasks such as tariff classification, customs documentation, and compliance checks, providing financial and operational visibility for international trade.
Carriers or shippers with dedicated trucks or trailers. It extends the planning and execution functions to include real time GPS tracking, driver scheduling and management, mobile driver applications, and asset management.
Billing & Visibility Portals – Logistics services providers must invest in robust tools to calculate contract and spot rates and track profitability. Increasingly, they are looking to differentiate through investment in portals for their customers to see real time dashboards and reporting through a dedicated portal.
The Journey to Transportation Excellence
Choosing transportation partners that can flex and grow with your operation is a critical decision that shouldn’t be taken lightly. Implementations are both costly and risky – and post-implementation, business requirements will change. A transportation platform should be able to adapt to a changing business environment while providing the tools to drive continuous improvement across the operation. Still, considerations for cost and speed often dictate more pragmatic direction when considering the appropriate partner.
Critical decision criteria when selecting a transportation platform, or extending an existing architecture around legacy components include usability, the ability to meet standard requirements, specialized or extended features, extensibility (the ability to customize and automate processes), optimization logic (and ability to deliver value to the business), technology and architecture, vendor relationships or ease of doing business, strategic portfolio (ie integrated supply chain solutions), partner ecosystems (enabling scale and cost management), and of course, total cost of ownership. While each of these can drive a decision in favor of a specific vendor or solution, SCT focuses on the following criteria to align to a short list of prospective partners:
If the business anticipates special requirements such as client specific requirements management (LSPs), LTL and parcel rating, spot auctions, international tariff awareness, customs documentation and processing, electronic documentation workflows, real time shipment visibility, freight audits, etc, a core provider may fail to meet the requirements and more complex niche player or best of breed solution will be needed.
If a business requires advanced optimization logic to manage load planning and optimization (ie optimized load utilization), route optimization, and advanced routing guides for carrier selection and waterfall tendering, a best of breed provider will likely need to be considered.
For organizations that have a strong focus on cost and customer service and are dependent on real time pricing or awareness of shipment status, third party data aggregators can provide the data, but the ease of integration becomes a consideration, so vendor partnerships can be material.
Recent years have seen investment across the landscape in platform modernization (or re-architecting for cloud platforms) legacy solutions, as well as the emergence of SaaS-native platforms. While nearly all players will now position some version of a cloud-based solution, the maturity levels of these solutions and ability to address all use cases should be viewed as highly suspect – rigorous vetting of the capabilities on the latest platform is encouraged.
For more information, see SCT’s commentary on Navigating the Transportation Technology Landscape and Navigating the Transportation Services Partner Ecosystem
