While the market size of the warehousing and transportation industry witnessed a slight dip in 2023 year over year, it was still valued at $1.6 trillion by the end of the year. The volume of goods expected to be transported in 2024 across the U.S., Brazil, China, India, and Germany is 7.19 trillion tonne-kilometers. Given the staggering volume of goods and the distance they are being transported, a transport management system (TMS) solution is a non-negotiable that plays a significant role in efficient supply chain operations.
The TMS solution is a control center that streamlines the entire logistics process and enables seamless coordination between each logistics node in the supply chain. This article will shed light on how shippers, forwarders, and supply chains can benefit from using a TMS.
The TMS solution allows businesses and supply chains to have better control over their entire logistics and transportation process. With the TMS solution, any supply chain will be able to streamline its transportation process to achieve the following:
TMS software can help businesses and supply chains significantly cut transportation costs with features like route optimization, carrier selection, and automation. Route optimization ensures they can find the most efficient path, and carrier selection helps brokers identify carriers that offer the best rates in the system. The average TMS software can also help automate tasks like invoicing, scheduling, and documentation, ensuring zero mistakes and no financial blowbacks.
Transportation operations can get very complicated. Imagine having to monitor 100 different transportation processes simultaneously while maximizing fleet efficiency. With transportation management systems, the complications are vastly reduced. Features like automation and real-time tracking allow for automated carrier selection, scheduling, and real-time information across every step of the transportation process, allowing for more strategic planning and actions.
With real-time tracking in the TMS solution, freight managers have a better grasp of the shipment process. The back office can see exactly where the cargo is, identify potential risks or delays in transit, and take proactive action to ensure minimal impact. The TMS also allows the team to reroute shipments if necessary and optimize warehouse staffing for on-time arrivals.
The TMS solution allows for improved lead times, transparency, communication, and collaboration for all stakeholders. Putting them together will ensure customers have access to improved services, and they can track every step of the delivery process. Customers are increasingly interested in the end-to-end process as it allows them to plan their downstream activities effectively.
Generally, any business or supply chain can leverage three types of transportation management systems. They are homegrown, on-site (on-premise), and cloud systems.
The homegrown TMS solution is designed and built from the ground up by an in-house team or an external contractor to the specifications of the business or logistics operation. It is mainly used when the organization runs a high volume of transport operations with many complicated and moving parts. The system is unique to the business, and any upgrade in the future will be done by the team responsible for setting it up.
The on-site TMS software solution is typically purchased from the developer at a one-time cost, but it will need the tech team on the ground or a contractor to help integrate it with the operations. This way, the business can set it up to align with its processes and objectives. Although it involves a one-time initial cost for such a TMS solution, maintenance still will be needed, with the business determining the timing or regularity of the maintenance.
A third-party provider off-site hosts the cloud-based TMS solution, and usage will require a licensing fee and subscription to the company providing the service. With the cloud, there is no need to invest in hardware and security because the third-party provider handles most of that at subsidized costs. It comes with the same features for all users, albeit abundant. The tech team can leverage these features to create a unique process that accommodates logistics operations. It also works for supply chains moving large volumes of goods.
Transportation is not exclusive to third-party logistics providers or carriers. The shipper may want to manage its logistics operation in-house, or it may want to rely on a broker, which is a logistics expert that connects shippers to carriers. If you’re a business looking to choose a TMS for your operations, the following steps will help you pick the right solution.
The needs of your logistics operation will form the foundation of your choice of TMS solution. Start with the basics: shipping volume and frequency, shipment modes, budget, scalability, and pain points. An analysis of the needs will guide your choice of TMS software.
For instance, a logistics operation that moves a lot of goods may need a more robust solution that can handle all the activities seamlessly. However, if there are budget constraints, it will be necessary to balance both. Transportation management systems have different capacities and price ranges. The business can start with an option and then upgrade as needed. That said, it is always preferable to choose and stick to a TMS solution, as phasing it out for a new solution is time- and resource-consuming.
After identifying the transportation and logistical needs of the supply chain, the next step is research and evaluation to find the TMS software that best suits the needs of the business. Different logistics operations will require different TMS software solutions. However, the best is usually a combination of functionality and price.
To find the best option for the logistics management, follow these steps:
These processes will set you up for the next steps. It is essential to ensure that you consider the market presence, expertise of the leadership, and recommendations. All three may not be necessary, but the providers must check one of these boxes.
During the demos and proposals, evaluating each TMS solution’s functionality and user interface is critical. The features must be well suited to the type of logistics operations, ensuring they optimize or improve the logistics process. It must also be easy to use because it will be leveraged by different people in the logistics management process, ensuring they all easily understand the application and will enhance the throughput of the entire operation.
In addition to those two, the transportation management system must integrate with existing systems such as the WMS and any order fulfillment application or solution. Integration enhances communication and transparency among all the parties in the supply chain, optimizing the entire process.
Investigate the implementation process thoroughly. Determine how long it will take, whether training is provided, and the duration of the training. Next, evaluate the support options available. Some support services might be included for free, while others could incur additional costs. Addressing these questions will prepare the business for success by eliminating unexpected surprises. Additionally, explore whether support can be managed in-house.
At this point, you are ready to make a decision. Before doing that, compare each proposal and demo and see how they help the logistics process. Compare the long-term value of each and then make an informed decision.
The bottom line is that TMS solutions make all the difference in logistics and transportation. And the right partner is critical if you want a seamless operation. With EKA, you do not have to look far for the right partner.
At EKA, we empower carriers, freight brokers, and shippers with a transportation management system built for scalability and performance. Experience smarter management, sharper insights, and stronger growth potential. Our automated workflows and plug-and-play integrations facilitate seamless growth, enabling you to change the game and improve the work experience through our innovative digital freight ecosystem.
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