A transport management system (TMS) is the best way to keep a grip on the logistics chain. The software provides information on transport flows, expected arrival times (ETAs), transport performance, and logistics costs. More comprehensive versions of TMS applications allow users to automatically check invoices, automate booking activities, collaborate with suppliers, and monitor compliance with commercial agreements between all the stakeholders within the supply chain. A TMS is the basis on which shippers and logistics service providers manage goods movements in the chain using different modes.
A company considering investing in a TMS or replacing an existing package should focus on four aspects. Enabling them to tackle the most important challenges, now and in the near future.
- Transport pricing & allocation
- Visibility
- Sustainability
- Execution efficiency & collaboration
1. Transport pricing & allocation
Understanding rates within the transport sector makes it easier and more effective to do business. The more data available, the more understanding shippers have of how to set their rates. There is a huge need for transparency within the supply chain, but not everyone wants or can provide it. With a TMS, you as a shipper can take matters into your own hands. Increased information and the potential for pre-billing and invoice checking allow for more interaction with supply chain partners. A modern TMS allows shippers to automate invoice checking based on pre-set parameters. If the check is approved, payment follows automatically. The pre-billing function in a TMS gives control. Pre-billing eliminates unnecessary discussions and drafting of credit notes.
2. Visibility
Real-time visibility is almost the norm, especially for certain transport modes. But a TMS does much more, providing better control and service through real-time tracking and ETAs for all transport modes across borders. In addition, it provides a ‘control tower’ view across supply chain operations. From purchase orders to proof of delivery, there is real-time visibility for end customers, while also helping to improve control over transport operations and costs. Finally, a TMS provides an integrated view of transport, stock, customs status, and carrier/supplier performance.
3. Sustainability
If you want to make a success of sustainability, data must be easy to share with your partners in the supply chain. When selecting a logistics provider, you as a shipper or logistics provider can request the CO2 emissions data for routes. Sharing data with supply chain partners can also lead to better predictions about the emissions of a particular route or the total routes agreed with a carrier. If the data are exchanged digitally, this will help reduce paper documentation.
4. Execution efficiency & collaboration
If you have a TMS that can be easily linked to carrier systems, that's a big plus. Carriers can take on this data in an automated way. This results in less manual work and less likelihood of making mistakes. Order confirmations, including the subsequent paperwork, are also automated. Some suppliers enter data into a shipper's TMS, either directly or via a portal. That brings all the data together. This is one example of collaboration in which a TMS plays an important role. The TMS can play a similar role in execution, pre-shipment, or planning activities, identifying exactly who can do what. The customer's wish should dictate the capabilities that the TMS gives the different chain partners.
INDUSTRY WHITEPAPER
2023 Global Transportation Management Benchmark Report
Descartes conducts annual benchmark research among global transportation professionals. The 2023 study reveals that higher (fuel) costs and a shortage of drivers pose challenges, while investments in visibility present opportunities.