Transport management systems (TMS) are software systems designed to optimize and manage various transport operations, including inbound and outbound transport operations.
Transportation management system software can assist with the following functions:
- Measuring Key Performance Indicators and reports
- Calculating transportation costs
- Optimizing travel routes and vehicle loads
- Freight audits
- Creating and optimizing shipping plans
TMS have a wide range of features and functions, and are generally dictated by the number of vehicles they are intended to serve, plus the vehicles’ load capacity. Large logistics companies usually use advanced TMS. These are similar to GPS vehicle trackers used within company car fleets, as they are able to track the locations of both vehicles and their drivers. However, smaller companies often choose more basic systems that are only able to track vehicles and their fuel consumption.
It is important to note that transportation management systems and fleet management systems, while related, are not the same.
TMS do not only include vehicle-tracking functions. They are also able to manage shipments, freight accounting and shipment plans. Meanwhile, fleet vehicle trackers are related solely to vehicle and driver tracking, data analysis, temperature control, plus fuel monitoring and control. TMS are also able to carry out these tasks, but unlike GPS vehicle trackers, are not restricted solely to them.
How transport management system is applied depends on the type needed for the business.
Below are three examples:
- TMS dedicated to the dispatching and shipping of parcels are often used by courier services such as “FedEx” and “UPS”.
- TMS dedicated to managing light commercial vehicles fleets are used for route optimization, plus the outbound dispatch of vehicles.
- TMS dedicated to international and multi-modal shipping companies involved rail, marine and road-transport route management.