As the TMS market nears $45.5 billion, transportation managers and supply chain coordinators face a key challenge: understanding TMS pricing. Evaluating costs can be complex, but making the right investment can streamline operations, reduce errors, and maximize ROI.
TMS pricing can be difficult to navigate due to varying plans, payment structures, and feature distribution. This guide simplifies the evaluation of direct and indirect costs to help you find a system that maximizes your ROI.
In this post, we’re going to simplify the process of evaluating the direct and indirect costs of a TMS in order to find a fit for your business. This will include a breakdown of how to understand TMS pricing models and how to figure out which prospective TMS will produce the greatest return on your investment.
While there will be some outliers, there are three key TMS pricing models that are most common on the market. If you want to answer a question like “how much does TMS cost” across the board, you have to understand the different models and how to compare them.
Most TMS solutions use subscription pricing, typically billed monthly or annually. Annual plans often include discounts, and pricing may vary depending on the features you select. This model works well for companies that want predictable costs and scalable access.
This TMS software cost model charges an amount per transaction on the platform. While these charges are initially affordable by design, the downside is that the larger your business grows, the higher your total costs will rise. Still, per transaction pricing can be useful for smaller businesses that have less freight to account for.
User-based pricing models charge a direct fee in order to grant users a license which they can use to access the software. In some cases, these licenses will become locked to a specific device, which grants business owners some control over when and where their TMS will be accessed.
With so many different pricing options to choose from, it’s important for a business owner to carefully consider the TMS TCO (total cost of ownership). Looking at the TMS TCO means taking into account all the costs of maintaining your access to a TMS.
The most apparent cost of a new TMS is the direct implementation cost. This includes factors like the direct price tag on your access to the software, whether on a subscription, per transaction, or user-based licensing basis. This also takes into account any add-ons you may have purchased, such as access for more users and carriers, or usage of cloud-based storage.
Training employees and carriers is an indirect but critical cost. According to Training Magazine, the average U.S. training cost is $1,071 per employee. While time spent learning a new system temporarily reduces productivity, a well-implemented TMS streamlines shipping operations and delivers long-term efficiency gains.
Migrating data and connecting your internal systems to a new TMS involves direct fees and opportunity costs. Investing in proper integration ensures accurate data flow, prevents disruptions, and maximizes the value of your TMS.
Ongoing support costs for TMS include paying for access to servers, licenses, updates, and customer support. In many cases, these maintenance fees will be baked into the pricing plan you're paying for. However, some TMS software developers will restrict a few of these functions (such as expanded access to customer support) behind higher pricing tiers.
So, how does a supply-chain director calculate the ROI on a transportation management system?
One way is to use a TMS ROI calculator that will take into account your operation metrics such as freight procurement and current usage of automation. Then, it can calculate the potential savings you could generate utilizing a TMS.
It's also important to take into account the TMS payback period. This is the average time it takes to see a positive return on your investment in any transportation management system.
According to a 2024 survey of transportation industry leaders by G2, it takes on average 14 months to see a positive ROI on a new TMS for buyers. That said, this report also notes an average user adoption rate of 80%, which means four out of every five adopters comes to recognize the benefits of TMS software.
While this guide covers the most common elements of TMS pricing, the market is ever-changing. Pricing models will evolve and fluctuate as software tools incorporate new features to compete with each other. That said, the below questions are helpful to keep in mind as you try to evaluate the truth in transportation management system cost.
A TMS costs whatever is outlined in its pricing model, along with indirect costs such as the time and opportunity cost of training your employees, transferring data, and maintaining ongoing support for the TMS.
Yes, TMS software can help you save money by streamlining shipping operations, boosting data transparency, and consolidating communications in one platform.
ShipperGuide TMS delivers affordable, high-impact results. Optimize operations with price monitoring, rate benchmarking, and detailed reporting to track freight, transit times, and modes. Preview your potential savings with our ROI calculator and see how this TMS can transform your shipping operations.