TMS Software Explained: Functions, Features, & Capabilities

Technological innovation has transformed logistics in the 21st century. Transportation management systems (TMS) have become essential for companies seeking to scale operations, reduce costs, and improve freight visibility. 

By unifying shipment planning, execution, and analytics in a single platform, modern TMS solutions help logistics teams automate repetitive tasks and focus on strategic initiatives. In this post, we’ll explore core TMS features and how they integrate with other technologies to optimize supply chain operations.

Core Functions of a Transportation Management System

TMS software streamlines complex logistics by automating shipment management, optimizing routes, and providing actionable analytics. These tools allow businesses to reduce operational costs, improve delivery performance, and maximize the value of their workforce.

Strategic Freight Sourcing and Procurement

Effective freight sourcing and procurement go beyond simply booking shipments. Instead, they involve a strategic approach to selecting carriers, negotiating rates, and managing contracts to optimize cost, service, and reliability. 

When using a modern TMS or digital sourcing platform, shippers can continuously analyze market rates, evaluate carrier performance, and adjust their sourcing strategy in real time. This proactive approach helps businesses reduce transportation spend, improve service levels, and build stronger, more resilient supply chain partnerships.

Supplier Coordination and Order Management

TMS software automates coordination between suppliers, warehouses, and carriers, reducing manual data entry and eliminating errors. Streamlined workflows and real-time order tracking help businesses scale efficiently while providing logistics managers with full visibility from pickup to delivery.

Carrier Selection and Route Optimization

TMS software identifies cost-effective carriers and optimizes delivery routes using real-time data and AI algorithms. By consolidating shipments and reducing partial loads, companies lower fuel costs, minimize empty miles, and accelerate transit times—boosting both efficiency and profitability.

Advanced Features Driving Smarter Logistics

With predictive logistics tools and other AI-powered algorithms, TMS software can significantly help businesses with large shipment volumes. In recent years, developers of transportation management software have introduced a large number of advanced features to their products. From powerful TMS analytics to automation functionalities, they allow businesses to improve efficiency and make data-driven decisions.

AI-Powered Analytics for Decision-Making

Innovative TMS software like ShipperGuide uses artificial intelligence to analyze shipping data and identify trends. This improves strategic planning and allows businesses to forecast potential disruptions or changes in demand. By leveraging AI-powered tools, managers can make data-driven decisions from insights into carrier performance and delivery reliability.

Predictive Routing

Predictive routing features and the usage of real-time data allows TMS software to suggest the most efficient transportation mode and delivery routes. These tools optimize schedules even before the issues arise. Time-sensitive industries that deal with perishable goods, like the food and beverage sectors, can benefit greatly from predictive routing tools of the TMS software.

Dynamic Pricing

Transportation management software also has built-in dynamic pricing tools. They allow logistics managers to adjust freight rates based on carrier availability and demand. This reduces transportation costs and optimizes prices.

Yard Management

While not every TMS includes yard management natively, it can be an advanced feature for some. For instance, Loadsmart's ecosystem can integrate these capabilities directly, which enables end-to-end visibility from yard and dock to freight execution.

Seamless Integration with Other Systems

Although TMS software is a powerful tool with multiple functionalities, it’s only one of the solutions used by manufacturers, distributors, or 3PL companies. From ERP TMS integration to combining the power of WMS and TMS, a key feature of TMS software is that it can be integrated with other solutions.

Connecting TMS with ERP, WMS, and eCommerce Platforms

By integrating the aforementioned technologies, companies can achieve better data synchronization. This allows them to manage inventory in real time, eliminate data silos, and synchronize order fulfillment. Combining the power of multiple solutions gives even more automation opportunities and the chance to streamline communications even better.

Integrating Workflows

Integrated TMS workflows automate routine communication and reduce human errors. This improves response times and overall efficiency, streamlines coordination, and minimizes the chance of bottlenecks.

Frequently Asked Questions About TMS Software

As TMS software is one of the most complex technologies in the sector, it’s understandable for managers and decision-makers to have various questions regarding this type of solution. Check out our answers to some of the common ones.

What Is TMS Software Used For?

TMS systems are used to plan, execute, and optimize freight movement across different transportation modes. They help logistics teams automate workflows, track deliveries, and analyze carrier performance. With TMS software, businesses can achieve lower transportation costs, enhanced visibility, and better efficiency.

Is TMS a CRM System?

No, there are significant differences between TMS software and a CRM system. The former focuses on logistics operations while the latter manages customer relationships and sales. TMS and CRM systems can be integrated to improve communication, order fulfillment, and deliveries.

What's the Difference Between TMS Software and WMS Software?

Transportation management software manages the movement of goods between different stages of the supply chain. On the other hand, the primary functions of WMS software are related to inventory management, order fulfillment, and storage. 

Discover ShipperGuide’s Most Game-Changing Features

ShipperGuide has proven to be the right TMS software for companies in various fields. By integrating innovative features and offering excellent customer support, we can confidently say that ShipperGuide is the right solution for you. Schedule your demo to see why.