Transportation Management System: The What, Why, and How.

  • By Navya Deepika Battu

Transportation Management System: The What, Why, and How.

Monitoring shipping and transport is a strenuous task since there are multiple parties involved in it. Managing it manually might work when you are dealing with small batches but if you are dealing with multiple orders and clients, an automating solution becomes a necessity. TMS is one such software that helps businesses optimize their transportation process.

In this blog, we dissect what a TMS is, why you need one, and how it works. Let’s dive in.

The reality about transportation is that it's future-oriented. If we're planning for what we have, we're behind the curve.

- Anthony Foxx

What Are the Features of TMS?

All transportation management systems, regardless of their level of complexity, offer a wide variety of features. They can be broadly classified into three categories: Planning, execution, and visibility. Let’s look at each type in depth.


Whether you are placing a PO for goods or delivering to customers, finding the optimal carriers to make the best of your resources is crucial. A TMS does all the planning for you, depending on your requirements and budget.

A TMS considers multiple routes and modes of transport to find the most cost-effective, fastest, or safest one. It also plans cargo placement, unloading, loading, and handles tendering. We elaborated on these features below:

1. Transportation Order Management

When a package is being sent from one location to another, several people need access to the freight’s information. A TMS keeps all the relevant people including, planners, customers, drivers, etc., in the loop to minimize the wastage of resources.

When a transportation order is received, its specifications are entered including weight, current location, destination, order date, commodity category, and other vital details. This can be automated when integrated with a WMS or ERP.

Once the order details are filled, TMS automatically finds the optimal route, assigns drivers, and shipment carriers, and calculates the estimated delivery. Throughout the transit, the order details and the relevant documents are linked to the order for drivers to view on their smartphones or tablets.

TMS lets drivers frequently update the order location on the dashboard, allowing customers to track their products and planners to have a complete overview of the process.

2. Tendering

Choosing the right shipment carrier is one of the factors that can help you cut costs. A TMS automates the process of tendering based on the parameters you have set. For instance, if your priority is express delivery while keeping the costs low, the system scours and creates a list of fitting carriers. Then you may either select one manually or simply automate that step too.

There are several tendering methods TMSes use, some of them are waterfall tendering, broadcast tendering, and status tendering. These methods often revolve around finding the best price, best performing provider, highest rated provider, etc.

3. Shipment Rate Management

Shipment prices depend on various things including tariffs, discounts, contracts with carriers, the number of modes of transport, etc. Manually calculating all of them and giving a quote is almost impossible when you have several orders on your hand. A TMS automates this process and creates custom quotes after considering all the parameters.

4. Load Planning

Load planning simply means calculating the maximum capacity of a loading vehicle to figure out how much freight it can carry. You take the vehicles' dimensions and pull the freight details to estimate this. A TMS automates this and some of the TMS even allow planners to change the load placements and visualize it in 3D.


Once you have planned everything and made agreements with shipping carriers, it's time for execution. This includes all the steps from getting goods and deliverables from one place to another.

With a TMS you can manage your equipment (like forklifts, trucks, vans, etc.) and drivers, workers' wages, schedule shipment pickups and drop-offs, and manage paperwork all in one place. We expanded on some of the key features below.

1. Fleet Management

This feature is helpful if you use your own vehicles to transport goods from warehouses and for shipping. TMS helps manage and track your vehicles, assign equipment to drivers, handle dispatch, calculate and settle driver’s wages, etc. You can extend the functionality when you pair your TMS with fleet management software.

2. Dock & Yard Operations

TMS also lets your schedule pickups, and manage and monitor all yard operations in real time. These include creating a docking schedule, managing loading, and unloading sequences, and keeping track of all information on the entry and exit of vehicles, inbound & outbound goods, locations of trailers, etc.

For 3PL companies, TMS helps ensure drivers don't wait in long lines and don't miss their docking appointment, helping you save time and resources. It also establishes real-time communication with the dockyard and warehouse.

You can further extend the functionalities of your TMS by integrating it with a dedicated yard management system(YMS) and WMS.

3. Documentation & Claims Management

Needless to say, there’s a lot of documentation involved in transportation. With a TMS you can audit your shipment and automate payments, invoicing, and billing, like bills of lading (BOL). You can generate and manage compliance and trade documentation, and other documents of proof at the time of delivery, pickup, and transit.

TMS also helps in claims settlement for lost and damaged goods during freights. It processes the claim, reviews it, approves it, and even automates payments when integrated with a financial system.


Successfully planning and executing operations is only one part of the equation; optimizing every step as much as possible and as often as possible is vital for your business’s growth. TMS offers complete visibility over your transportation which allows you to identify inadequacies, make better business decisions, and efficiently communicate with your clients. We break down these features below.

1. Connectivity Portals

Real-time communication is crucial in transportation and delays can sometimes lead to inefficient usage of resources. Some TMS providers offer self-service portals and dashboards, these establish a flow of information right from pickup to delivery.

Your clients and partners can issue tenders, view order status, and review invoices. Although all TMSes might not have these features by default you can always customize them as per requirement.

2. Route Analysis & Tracking

As we have already discussed in planning, picking the best possible route is one of the key functionalities of TMS. On top of planning routes, TMS draws comparisons between the expected and actual performance for the planned routes. This helps identify deviations and make changes accordingly.

Tracking is another feature of TMS that allows everyone involved to know the location of the shipments at all times. Telecommunication systems like GPRS, GSM, and UMTS are integrated into trucks or drivers' mobile enabling tracing and tracking without needing to contact the driver.

3. Business Intelligence & Analytics

Business intelligence simply means putting every piece of data together into comprehensible facts. A complex TMS allows you to convert massive amounts of data you've collected into reports. With this factual information, you can make take actionable steps to improve your business.

Oversee and Optimize Your Transportation With a TMS

Transportation is one of the most complicated steps in the fulfillment process due to the number of parties involved in it. TMS is an essential tool for businesses that deal with shipping and transportation. From planning loads and routes to executing them to tracking and tracing every vehicle, TMS simplifies every step for you.

Integrating your TMS with other software like ERP, WMS, route planning software, financial software, etc., can extend the benefits you reap. However, if you want a more economical option you can go for a customized TMS solution that fulfills all your requirements.