Top 10 Benefits of Using a Transportation Management System

Arya Bharti

Top 10 Benefits of Using a Transportation Management System

The Transportation Management System (TMS) market is witnessing excellent growth and Gartner projects the market to hit the USD 2.11 billion mark in 2024.

Technological advancements in logistics, the surge in eCommerce, and cross-border trade are some of the major growth drivers.

Transportation expenses are still one the major challenges for shippers around the globe and businesses are increasingly turning to technology-driven solutions to optimize operations and reduce transport costs.

Hence, TMS emerges as a vital tool that can not only enhance supply chain visibility but can also streamline logistics, ultimately driving cost-effectiveness across the entire supply chain.

Let us quickly delve into the top 10 key benefits of investing in an AI-powered transport management system and find how it can transform overall logistics profitability.

10 Benefits of Implementing a Transportation Management System

#1 – Reduced Transportation Costs

Leveraging an AI-powered transport management system enables businesses to finely optimize resource and asset utilization based on multiple parameters, such as costs, order groupings, stop counts, and more.

Businesses can leverage intelligent routing engines to create optimal delivery routes while catering to diverse transportation needs.

Additionally, the ability to customize optimization criteria offers tailored transportation operations optimization, that reduces operational costs. 

An intelligent TMS solution creates multi-stop routes, leading to cost efficiency across multiple cost drivers.

By implementing such solutions, businesses gain tighter control over their logistics operations, resulting in reduced operational expenses across vehicles, fuel, labor, and other resources. 

#2 – Real-Time Shipment Tracking

TMS software comes with built-in capabilities to track shipments and transportation assets in real-time and also send automated status updates for key milestones.

These updates can be shared with multiple parties in a personalized manner to improve the visibility of shipment movements. 

Stats reveal that 30% of companies report improvement in customer satisfaction after integrating intelligent Transportation Management Systems.

This is another critical benefit as real-time visibility over order movements improves accountability and enables businesses to offer better service to their customers.

#3 – Intelligent Route Optimization and Dynamic Routing

AI and ML-powered transportation management systems can take multiple complex criteria as inputs, such as physical shipment characteristics, delivery location, vehicle type, delivery time, and more,  to create optimal routes for each shipment.

They can also process the real-time traffic and road data to re-route for sudden disruptions like roadblocks, traffic jams, and weather-induced challenges in real-time. 

Businesses can get automated updates in case a driver deviates from a system-suggested path and ensure firm control over driver movements.

This helps reduce transit times, fuel consumption, frauds, empty miles, and idling across road transport modes. 

#4 – Automated Load Planning and Consolidation

A transport management system incorporates automatic load planning and pairing algorithms that precisely match each shipment with the ideal carrier and vehicle.

This is done on the basis of various customizable constraints like delivery location, shipment size, transport costs, and more.

This eliminates guesswork, allowing businesses to select consignments and get a meticulously optimized vehicle selection.

This not only minimizes transportation expenses by optimizing vehicle capacity but also reduces the reliance on market vehicles for Partial Truck Load (PTL) shipments.

Additionally, it enables the consolidation of shipments, streamlining transportation operations for enhanced efficiency in supply chains and cost savings, via improved transportation planning.

#5 – Digitized Documentation and Finance Management

Advanced TMS solutions also digitize important documents, like shipping records and customs paperwork, shipment documents, permits, etc.

This means no more manual filing or searching through stacks of papers. It’s a time-saver and reduces errors, all the while reducing transit times at customs and checkpoints.

They also help automate the management of invoicing, billing processes, extra charges incurred due to freight class changes, loading/unloading, etc., and penalties.

Thus, businesses can easily automate finance operations and reduce invoicing errors which can account for an additional 20% of shipping costs.

With real-time visibility into financial aspects, businesses can monitor transport costs, and budget allocation, and manage allocation among multiple carriers accordingly. 

#6 – Reduced Road Freight Procurement Costs

A TMS can significantly reduce freight procurement costs across multiple modes in multiple ways. It provides automated carrier selection based on predefined criteria like rates and performance, ensuring the most cost-effective carriers are chosen. It also enables bulk tendering, and consolidating shipments to negotiate lower rates with carriers. 

Further, TMS platforms provide real-time visibility into carrier performance, helping shippers assess carrier efficiency and negotiate better terms.

Advanced TMS solutions also come with in-built vendors that reduce vendor onboarding time and allow businesses to procure freight across multiple carriers and reduce freight costs by selecting the most optimal vendor.

As businesses can create an optimal mix of different carrier partners without much ado, they are able to improve their serviceability as well.

#7 – Performance Evaluation and Analysis

Intelligent TMS software solutions come with in-built performance benchmarking capabilities that allow businesses to set and measure KPIs across all vendors in an effective manner.

This analysis is invaluable for selecting the most suitable transportation partner for upcoming shipments, enhancing overall productivity. 

By consolidating vendor, shipment, and serviceability data, TMS solutions streamline performance evaluation, facilitating informed decisions, and promoting more efficient collaborations with transportation partners.

#8 – Advanced Analytics and Reporting

With built-in data analytics and reporting features, a TMS can empower businesses to leverage their operational and organizational data effectively.

It enables the identification of hidden trends, such as carrier-specific delivery delays, incorrect shipment deliveries, and shipment costs. 

These built-in reporting tools generate easily consumable reports, in various exportable formats, facilitating strategic decision-making within the organization.

This robust analytics system reduces the reliance on third-party data analytics and reporting services, effectively reducing operational costs.

The in-built analytics and reporting capabilities also offer actionable insights directly to key executives (CXOs) for more informed and cost-effective business decisions.

#9 – Intelligent Proof of Delivery (PoD) Management

TMS solutions enable both delivery personnel and customers to attach visual proofs of final delivery, including images and videos.

This can include photos of the delivered items or the customer’s location, enhancing transparency across the whole supply chain.

This is called electronic Proof of Delivery (PoD), which streamlines customer feedback and facilitates the monitoring of driver behavior, deterring actions like false delivery attempts or incorrect deliveries. 

Customers can conveniently provide feedback on non-delivery through shared links via their preferred communication channels.

Similarly, delivery personnel can select reasons for non-delivery from a predefined list, ensuring accountability before proceeding to their next task through rider apps. This feature promotes smoother operations and customer satisfaction.

#10 – Unified Management

Transportation management software solutions offer a comprehensive logistics management platform, automating various processes from planning and procurement to execution, tracking, and auditing of every shipment.

They provide a centralized interface for managing diverse delivery scenarios, including hub-to-hub, hub-to-store, and last-mile deliveries, streamlining operations and enhancing supply chain efficiency. 

TMS platforms empower businesses to seamlessly assign, track, and manage deliveries, whether utilizing their own fleet, market vehicles, or third-party logistics providers (3PLs).

Wrapping Up

Intelligent transportation management software like Shipsy, empowers businesses in multiple ways to manage their transportation processes in an effective and efficient manner and help them unlock:

To get started, or to catch our product in action, please schedule a free personalized demo today!

Frequently Asked Questions

What is the purpose of a transportation management system?

A Transportation Management System (TMS) streamlines transportation operations by optimizing routing, shipment tracking, and carrier management. Its purpose is to enhance transportation efficiency, reduce costs, and ensure timely deliveries.

How Does a Transportation Management System Work?

A Transportation Management System (TMS) works by automating and optimizing logistics processes, including route planning, carrier selection, and shipment tracking. It leverages data and algorithms to enhance transportation efficiency and reduce costs in supply chain operations.


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