Transportation management system (TMS) software has come a long way. SAP introduced software for transportation management in 1987. Its scope was limited, focusing on production and local distribution. Today’s TMSs are “highly integrated and data-driven to meet challenges head-on and provide greater control and insight across the network — from manufacturers and distributors to shippers and logistics service providers,” according to Supply Chain 24/7.
And the demand for TMSs continues to grow. Grand View Research said the global TMS market size was evaluated at $13.6 billion in 2023 and is forecast to grow at a compound annual growth rate of 17.4% from 2024 to 2030.
Grand View Research said TMS solutions “help automate the manual tasks of supply chain operations, including planning and execution, route optimization, and shipment tracking. Thus, they “help reduce manual errors, save time, and (manage) costs involved in managing transportation operations are the key factors driving the market growth.”
But not all TMSs are equal. The best TMS software helps slash shippers’ logistics costs. Here are 10 ways that’s accomplished.
Automation of manual tasks can eliminate bottlenecks, reduce errors, and ensure consistency in business processes. Efficiency improvements attained through automation lead to quicker turnaround times and can reduce labor costs. Error reduction achieved through automation can also result in additional cost savings.
Optimized route planning can lower fuel costs – and help lower greenhouse gas emissions. Shortening delivery times can also reduce labor and operational costs.
Real-time visibility has become a vital tool in logistics operations today. Real-time visibility and tracking can increase asset utilization and reduce idle time, thus lowering operational costs. It also plays an important role in quick decision-making, which is essential when the unexpected occurs.
A TMS can enhance load optimization by more effectively consolidating cargo to maximize capacity of each truck — and reduce operational costs.
“Load optimization is both an art and a science,” FreightWaves Ratings said, adding that it “can help companies compete in terms of pricing, lower operating costs, and increased profit margins.”
It said load optimization also can result in fewer truck stops, faster deliveries, and a better customer experience.
Automated invoice auditing identifies and corrects billing errors. It also ensures adherence to contracts and rates to avoid costly penalties.
“By automating the tasks involved in invoice auditing, businesses have an easy solution by which they can improve accuracy, greatly reduce the risk of errors, access data, and speed up the invoice approval process. By doing so, they improve visibility and control over company spending,” payment solutions provider Yooz said. “And, when it comes to AP audits, automation provides accuracy across the entire process that results in completeness and validity. AP automation is simply better at providing all of the above, consistently and quickly, by avoiding manual inputs.”
An effective TMS uses data to negotiate better rates with carriers. It also tracks performance to ensure the most cost-effective and reliable carriers are used. A good TMS also wrangles all the paperwork involved in shipping, including contracts, insurance documents, and compliance certificates.
Data analytics can help shippers identify cost-saving opportunities and make informed decisions based on those insights.
Today, data-driven decision-making is vital for businesses of all kinds.
“Smarter decision-making means making decisions that are most likely to help companies move toward their goals,” a Forbes article said. “Traditionally, the driving force behind decision-making has been the experience and instincts of business leaders. And unfortunately, that’s one of the primary reasons behind the unsettling statistic that 90% of small businesses and startups fail. Experience and instincts are valuable, of course, but research confirms that businesses that base decisions on data — not instincts or experience — are 19 times more likely to be profitable.”
A TMS can help improve the timing of shipments and thus reduce warehousing costs. It can also help with demand forecasting, predicting, and managing inventory levels effectively.
A FreightWaves article said a TMS has become a critical tool in inventory and fulfillment management. “Every movement of a piece of inventory can be tracked … and that is only possible with a modern TMS that connects the disparate systems.”
The best TMS providers continue to innovate and improve their offerings to help customers cut costs and increase profits. Customers can continue to lower their costs by automating paperwork and administrative tasks and streamlining processes to save time.
The Service Automation Framework Alliance said that automation and innovation often go hand-in-hand. “Organizations invest in automation technologies to stay competitive, and this drive for innovation can lead to the development of new products, services, and processes that stimulate economic growth.”
“Inefficiencies in transportation operations between the source and destination can significantly increase the overall cost and success of the operation,” Grand View Research said. “Similarly, it can also lead to customer dissatisfaction and frustration, tarnishing the brand’s reputation. Hence, various industries are involved in deploying advanced TMS solutions in their business processes to minimize errors and discrepancies, saving the company from financial losses and protecting its reputation.
“TMS aims to provide new forms of optimization solutions that can enhance the ROI for end-users and bring operational efficiency within the business processes. Deployment of TMS solutions also helps in noticeable freight savings by [streamlining] and optimizing transportation and supply chain operations, including efficient routing, selection of low-cost transport modes, and better procurement negotiations.”
Owlery’s flexible TMS platform was designed for shippers’ unique needs, providing exactly what they need for a faster, more reliable, and more cost-effective supply chain.
Owlery’s TMS software enables shippers to:
Owlery is an end-to-end supply chain platform designed to handle every aspect of shipping from order to payment. Owlery’s TMS software seamlessly integrates with other systems to provide a comprehensive solution to automate and streamline logistics processes, ensuring accurate, timely, and cost-effective operations.
Owlery’s TMS features include:
Owlery is tailored for midmarket companies with complex, messy supply chains, helping them achieve visibility, control, and efficiency — and slash their logistics costs.
