Transportation Management System Benefits That Transform Logistics

Transportation management systems have become the backbone of the logistics industry. That’s because they enable businesses at various stages of the supply chain to become more efficient and data-driven. Companies in different sectors, such as retail or manufacturing, rely on TMS solutions to help them automate certain processes, improve visibility, and reduce costs. 

Additional benefits of TMS software include data centralization, analytical capabilities, and integrations with other solutions. In this post, we’ll share more about the main transportation management system benefits and how businesses in different industries can transform their operations thanks to TMS solutions.

Learn How TMS Software Cuts Expenses by 10–20%

Improving your return on investment (ROI) by reducing costs is one of the immediate effects of using a transportation management system. With better load planning, automation of manual tasks, minimization of errors, and optimal carrier selection, companies can easily achieve 10-20% savings.

Understanding the ROI of a Transportation Management System

It’s common to include only cost savings when calculating the ROI of a TMS. However, due to the variety of tools offered by these solutions, businesses should focus on additional benchmarks, such as reduced errors, improved carrier performance, and labor efficiency. 

Consolidating shipments and improving operations leads to cost reductions. However, long-term TMS benefits include better productivity, gains in financial performance, and more efficient capital and labor allocation. Over time, these effects compound, enabling logistics businesses to scale operations.

Key Areas of Cost Savings

Various TMS benefits let logistics businesses reduce costs across several areas. Here are the main ones:

• Mode and Route Selection: A key feature of TMS systems is related to choosing the most cost-effective routes and transportation modes. Users do this by analyzing shipment data and real-time rates.
• Carrier Rate Management: Shippers can negotiate better rates or allocate freight to high-performing carriers by benchmarking carrier performance and tracking shipment data over time.
• Freight Audit: Perks of TMS solutions are those related to automated invoice reconciliation, validation of charges, and identification of discrepancies. 
• Automation of Labor and Processes: Scheduling, tendering, and documentation are routine tasks you can automate with a TMS. Thus, staff members can focus on tasks and processes that add more value compared to data entry or other repetitive activities.

Boost Efficiency with Automation and Route Optimization

In today's hyper-optimized supply chains, even small TMS efficiencies can scale and compound over time. Thus, shippers, carriers, and facilities need to be well aware of the trends in transportation optimization and the features of specialized software.

Streamlining Manual Tasks Through Automation

From generating manual shipment documentation to rate entry, various tasks can be eliminated by integrating a reliable TMS. In addition to the transportation management system benefits related to automating redundant tasks, these solutions can also be integrated with WMS or other specialized software. That increases the number of possibilities related to streamlining manual tasks and automating processes. 

Planning Optimization and Network Planning

Advanced TMS planning algorithms evaluate real-time rates, order details, delivery windows, and capacity constraints to determine the most efficient way to group and allocate orders into shipments. Instead of just optimizing routes, optimization minimizes total mileage, maximizes trailer utilization, and reduces overall transportation costs. Network planning tools further cut empty miles and improve how freight moves across the broader network.

Enhance Customer Experience with Real-Time Visibility

Trust is one of the cornerstones of B2B industries. That’s why efforts in improving customer experience and building long-term relationships are paramount. Tools for better delivery management and end-to-end shipment tracking are among the main TMS features for enhanced customer experience.

Real-Time Shipment Tracking for Transparency

Technological advances in real-time tracking and freight status updates give customers full transparency. Furthermore, these features allow for potential delays and ETAs to be calculated in advance. 

Improving Delivery Management and On-Time Performance

Some of the most important TMS benefits are related to the integrated performance analytics features. They track historical shipment data and analyze recurring issues with specific carriers and inefficiencies with certain processes. By combining improved visibility and the analytical capabilities of TMS solutions, carriers and shippers can reduce delays and control costs.

Frequently Asked Questions About the Benefits of a Transportation Management System

If this post hasn't answered all your questions regarding TMS benefits, check out the following commonly-asked questions and their answers.

Why Do I Need a Transportation Management System?

A TMS helps shippers centralize their transportation operations. It also improves visibility, allows for automating processes, and reduces costs. A major benefit of transportation management systems is that they allow companies with growing shipment volumes to scale their operations efficiently.

What Are the Key Benefits of a Transportation Management System?

Cost reductions and workflow automations are among the main TMS benefits. Other advantages of transportation management systems include real-time freight visibility and powerful analytics capabilities that allow constant optimizations of different processes.

How Much Cost Savings Can a TMS Generate?

Implementing a TMS system usually leads to cost savings in the range of 10% and 20%. These savings usually come from optimized routing, reduction of manual tasks, minimization of errors, and compounding operational efficiency.

Reap All the Benefits with ShipperGuide

To take advantage of the multiple TMS system benefits, you simply need to request a demo for ShipperGuide. Examine how our solution can help you plan, execute, analyze, and scale your shipping operations.