8 Important Reasons Why You Need a Transportation Management System

Are you struggling to get insight into your movement of goods for your business? One secret weapon that can help with your transparency problem is a transportation management system (TMS) - a digital logistics platform used by companies to manage the movement of goods and make strategic changes for the company.

What is a Transportation Management System?

The ins and outs of running a warehouse and coordinating shipments is a lot of work. Many logistics managers struggle to keep every aspect of the business running smoothly.

It’s difficult to control transportation costs, meet customer expectations, and manage employees in addition to all of the other duties required of the role. Organizing the details for shipments, documentation, rates, and more requires careful attention to detail, but too much of a manager’s time is usually spent putting out fires or working on supplier relationships.

A TMS controls all these details and more to ensure the transportation of goods is efficient and reliable. Manufacturers, distributors, and others who regularly ship goods utilize transportation management systems to improve their businesses in various ways.

The success of TMS technology can also be seen through a recent report by Grand View Research. According to this source, the global transportation management industry is expected to gain market growth between 2020 and 2025, with a CAGR of 16.2 percent. It may also be worth $198.82 billion by 2025. If you haven't set up a TMS yet, here are eight reasons why you need one for your company. 

Transportation management system driver in front of trucks

8 Benefits of a Transportation Management System

Improve logistics data

A transportation management system manages all a company's logistic data in one place. With route information, transportation costs, and other data points being input into one platform, you can pull a plethora of data reports to monitor critical metrics impacting your business. 

Managers can then use this information to make efficiency changes, route adjustments, and implement new procedures to improve business. 

Reduce freight costs

One of the best parts of a transportation management system is analyzing the cost efficiency of various logistic routes. A transportation management system can calculate the best path for freight transportation from loading to delivery in terms of speed, fuel cost, and driver overtime. 

Another cost-benefit is the ability to standardize shipment payment terms. The centralized billing aspect of the system audits billing and payments to manage your budget better and anticipate cash flow within the company. 

Enhance customer service

Customers have high expectations for package shipments these days. They want fast delivery, damage-free packages, and reliable tracking details. Many companies struggle to meet customer demands for package transportation, but a transportation management system changes all of that. 

Through a TMS, you can review the cost-efficiency of various carrier services and the frequency of on-time delivery. Monitoring this information will help you select the most reliable and efficient carriers for your products. 

The TMS can also let customers know when their order is shipped, and it will provide tracking information. All of this information lets customers know when to expect their packages. 

Improve freight accuracy

Want to reduce human error significantly? The TMS reduces pain points like manual data entry while improving other features. For instance, the TMS can validate addresses before products are even shipped. 

Improved business accuracy will save your company money, time, and resources. 

transportation management system in the warehouse


Increase warehouse efficiency

Tracking the lifecycle of orders through various status updates can greatly help a business anticipate inventory needs. When you know what is going out and coming in, you begin to understand the quantities you need to better stock a warehouse. 

The more time spent on a TMS also means various processes are being updated and made more efficient. When you must spend less time managing data entry and other time-consuming tasks, you will have more time to focus on warehouse needs and inventory management. 

Save your precious time

Manufacturers and distributors can be hesitant to integrate a TMS into their business because they worry the system will take a lot of time to learn and implement. However, the truth is that a TMS is a great time saver. 

By integrating route information into the system, you can track all loads and deliveries in one place. This means that fewer emails and phone calls to discuss delivery progress. Order information is also available through the system so that fewer spreadsheets are used to track inventory and monitor order details. 

Instead of compiling spreadsheets and sorting through emails, logistics managers can start focusing their attention on more strategic projects as well as company pain points. 

Furthermore, a TMS can be integrated into a business within a short time, from just a few days to a couple of weeks. The technology can start tracking data right away and quickly update your business to a reliable digital platform. 

Negotiate contracts with ease

A transportation management system allows you to compare freight rates between carriers quickly. It can even help you negotiate contracts through detailed comparisons. The system will also compile all contract details, from rates and quantity commitments to supplementary charges. 

It can also let you know if there is a certain number of transactions that will push you into a new savings category with the freight carrier. 

Easy access to comparable carrier information helps you select the best carriers and suppliers for your business while maximizing cost savings in the process. 

Ease of use

Automating necessary transportation management logistics dramatically reduces the complexity and confusion of managing a large distribution process. Compiling information in one TMS makes locating, managing, reviewing, and auditing data significantly easier for you. 

You no longer need to search through old emails for order details or flip through paper copies to find the bill back you need to review. The information you need to run your business successfully is all in one organized location. Pulling reports and streamlining processes has never been easier. 

Once you fully integrate your systems into one TMS, you'll appreciate the new ease of use that comes with the latest technology. 

transportation management system loading dock

Who should use a TMS?

Any business involved in transportation or shipping logistics should be using a transportation management system. 

A TMS will improve your company's efficiency and enhance cost savings in several areas, from shipping and ordering, to contract negotiation, and more. 

Your best bet for keeping up with freight trends and customer demands involves digital transformation. Supply chain managers and logistics, coordinators need to invest in the latest technology. A TMS is the best platform for successfully managing your business and increasing efficiency across all sectors of the industry. 

Stop making costly mistakes with manual data entry and start utilizing a valuable tool for your business. It's time to put away your clipboards, emails, spreadsheets, phone calls, and notepads and begin using the tools and technology that will really make a difference to your company. 


Your Next Steps:

Sign up for a product demo  of ShipERP's transportation management system and multi-carrier shipping software today to learn more about how a TMS can improve your business. 


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