---
title: "TMS Software for Freight Procurement: What to Know | ShipperGuide"
description: One platform to plan, book, track and pay for freight. Here is the part of a TMS that freight buyers actually lean on.
image: https://blog.shipperguide.com/hubfs/Transportation%20Management%20System.png
---
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# The Role of TMS Software in Modern Freight Procurement
by [**Hal Koss**](https://blog.shipperguide.com/author/hal-koss)
Key Takeaways
- A TMS is one platform for planning, booking, tracking, and paying for freight movement.
- Shippers use it to source and audit freight; carriers use it to dispatch, route, and bill.
- AI and automation add dynamic routing, smart pricing, and predictive procurement.
- Automated bidding, contract storage, and tracking are the features procurement leans on.
TMS platforms have continuously evolved to help shippers and carriers optimize procurement and operations. A modern [transportation management system](https://shipperguide.com/solutions/procurement/) (also known as TMS software) is an example of such a solution. Below, we shed some light on how a transportation management system plays a huge role in modern freight procurement.
[](https://lp.shipperguide.com/freight-procurement-ebook)
## Defining a Transportation Management System
**A transportation management system (TMS) is a digital platform that enables companies to plan, execute, and optimize the movement of freight.** The key tasks of a transportation management solution include rate shopping, freight booking, and real-time tracking and visibility. Managing costs and generating reports about performance and efficiency are also among the core functions of TMS software.
These complex systems can be used by shippers, carriers, and other businesses in the supply chain (e.g. [3PL service providers](https://blog.shipperguide.com/tms-for-3pl)). Because transportation cost control and process optimization are critical, TMS platforms have become essential for companies looking to scale efficiently.
## How Is a TMS Different for Shippers vs. Carriers?
**Shippers and carriers benefit from TMS software in different ways.** Most systems offer a combination of tools for both. Some platforms might be best suited for small to mid-sized businesses, while others offer an enterprise-grade level of support. **Let’s briefly examine how TMS software helps shippers and carriers separately:**
- **The main role of transportation management systems for shippers** is to help them optimize procurement, manage contracts, conduct freight execution, and [audit freight](https://blog.shipperguide.com/freight-audit-software). Analyzing and optimizing logistics costs is also among the main benefits of TMS systems for shippers.
- **Transportation management solutions are used by carriers** to dispatch loads, manage fleets, optimize routes, and manage billing. The powerful analytics offered by TMS software make it possible to optimize costs, increase profitability, and easily update shippers in real time.
[](https://loadsmart.navattic.com/lj7y0vxu?g=cmovz62k8007h04jvgo7fhbee&s=0)
## What Technologies Power Modern TMS Software?
Machine learning and artificial intelligence, automation and advanced analytics, and a set of supporting tools such as payment automation and benchmarking trackers are what sit behind a modern TMS.
Most sectors are driven by technologies, and the freight industry is not an exception. Modern innovations make transportation management systems an even more powerful tool in the arsenal of logistics operators. Some platforms gradually integrate new features while others rely on integrations with third-party tools to better assist businesses that use them.
[Machine learning and artificial intelligence](https://blog.shipperguide.com/ai-powered-tms) are powerful technologies within TMS software as well. They’re beneficial for dynamic routing, [smart pricing models](https://blog.shipperguide.com/dynamic-target-rate-carrier-pricing), predictive procurement, or to detect anomalies. Thanks to the increased popularity of AI-powered solutions, a growing number of transportation management systems aim to integrate such features into their platforms. AI models can predict lane volatility weeks in advance, allowing procurement teams to rebalance contracts vs. spot.
Automation and advanced analytics features can also be seen in most of the modern transportation management software solutions. They allow companies to minimize manual tasks and offer predictive and prescriptive insights for capacity planning and cost forecasting. Some logistics companies and shippers also prefer to use third-party tools that offer additional functionalities or a wider set of supporting features.
Payment automation tools, Excel macros, trackers of benchmarking indexes, and other supporting technology features are also used alongside transportation management systems. Some of these tools can be integrated with TMS platforms, while others are used separately.
## The TMS Features That Support Freight Procurement
[Freight procurement](https://blog.shipperguide.com/what-is-freight-procurement) is a complex process. TMS platforms offer multiple ways to simplify and optimize procurement. Thanks to the innovative features of transportation management solutions, companies can manage their freight procurement operations more easily. **Here are five TMS software features that help in that regard:**
1. **Automated bidding and [rate benchmarking](https://blog.shipperguide.com/freight-benchmarking)** streamline RFPs and improve spot procurement decisions.
2. **Carrier management and contract storage** allow shippers to track performance and keep all compliance documents in a centralized system.
3. **End-to-end [shipment tracking](https://blog.shipperguide.com/real-time-shipment-tracking)** gives procurement teams real-time visibility into freight movement.
4. **[Automation and efficiency tools](https://blog.shipperguide.com/automated-freight-procurement)** reduce or eliminate email communication, manual spreadsheets, errors, and administrative workload.
5. By **improving the overall efficiency of the freight procurement process**, TMS software solutions help businesses scale and support their strategic sourcing.
## Efficient Freight Procurement Starts with Smart Technology
A modern transportation management system helps you cut freight costs, streamline procurement, and improve visibility. The value is not in any single feature but in having sourcing, execution, tracking, and reporting sit in one place, where each one informs the next.
[](https://shipperguide.com/#request-a-demo)
## Frequently Asked Questions
### What Is a Transportation Management System?
A transportation management system is a solution that helps carriers and shippers optimize the transportation of goods. TMS software combines dozens of features and can be integrated with other third-party solutions such as ERPs, CRMs, or warehouse management systems.
### What TMS Features Support Freight Procurement?
The features that matter most for procurement are RFP management, spot procurement, carrier management, real-time shipment tracking, freight audit tools, and compliance tools. Together they cover the whole cycle, from asking carriers for a price through to checking that the invoice matches what was agreed.
### Is a TMS Worth It for a Small or Mid-Sized Shipper?
Yes, provided the platform is sized for the operation. Some systems are built for small and mid-sized businesses while others are built for enterprise networks. The question to ask is how much of the team’s week goes into quoting, chasing carriers, and reconciling paperwork, because that is the work the software takes on first.
Topics: [Freight Procurement](https://blog.shipperguide.com/tag/freight-procurement)
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