Inarguably, the logistics and transportation industry is experiencing some significant changes all across the globe. This makes it extremely crucial for businesses to implement new technologies and advanced market solutions to remain competitive in the market.
One of the best ways to achieve that is by implementing a reputable, effective transportation management system (TMS). Before we go on to explain the entire process of implementing a TMS, just understand that it is really simple to employ one for your business.
For instance, if you have opted for LoadStop—one of the leading enterprise cloud-based TMS in the market—all you need to do is sign in to your LoadStop account, and you’re good to go. TMS has become a key trend in the transportation and logistics industry.
With the help of a TMS, businesses can effectively make all possible interconnections within a supply chain by leveraging massive volumes of data. As every business craves higher cost-efficiency, it is recommended to use a TMS to jump to the next level.
A good TMS enables truck owners and fleet managers to save costs on every phase of the supply chain cycle. According to CTSI, in 2020, 34 percent of businesses had already utilized a TMS system, and 50 percent had purchased the software.
In this post, let us discuss the core features and benefits of a TMS, the main types of TMS, and the process of implementation of TMS.
The Main Features and Benefits of a TMS
An effective TMS helps trucking companies streamline business operations, increase work efficiency, and improve the bottom line. It handles functions throughout the complete lifecycle of a load. Let’s discuss the core features and benefits of a TMS.
Load Dispatching
Truck owners and fleet managers can easily manage and monitor fleet planning and driver scheduling using a TMS. They can optimize the loads between their entire fleet of vehicles and assign dispatches to drivers efficiently. As TMS helps optimize each shipment, a trucking company can save time and money throughout the complete shipping process starting from pickup to delivery.
Load Sourcing
With the help of a good TMS, you can find the right loads in the market and create wiser fleet plans based on freight markets, load preferences, load types, seasons, and driver cycles.
You can stay ahead of your competitors as TMS provides automated truck capacity posting and load searching. A TMS lets you post the availability of your trucks on multiple loadboards, allowing your customers to reach out to you quickly.
The intelligent bots of the TMS look for loads 24/7 in parent networks and multiple loadboards based on your fleet’s schedule, ensuring no missed opportunities.
Freight Tracking
A TMS can gather and consolidate detailed tracking information of the fleets as it records each movement of all shipments throughout the entire shipment process, from warehouse to final delivery.
Truck owners and fleet managers can get real-time end-to-end visibility of their fleet and shipments. This allows them to track the location of their vehicles, drivers, and shipments, anywhere and anytime from a single window.
Invoice Management
Another good thing about using a TMS is that it helps you save time and ensure accurate invoicing and billing. It quickly processes all your invoices, helping improve your cash flow and bottom line.
With the help of a TMS, you can manage all the records and track all the pending payments with customers or factoring companies. At the same time, you can update the status of the invoices and manage partial payments.
A TMS also streamlines the payment process for companies by providing access to freight audits, invoices, payments, and cost performance analytics.
Reporting
A TMS helps you make smarter decisions by providing actionable reports and business insights. It lets you keep tabs on profit and loss accounts, customer revenue, driver payments, and much more.
You can get in-depth reports on your networks and facilities through a TMS. Using this information, you can gain performance insights for future planning and develop further improvement strategies to minimize unnecessary expenses, improve services, and analyze overall cost savings.
Types of TMS
Essentially, there are two types of TMS software in the market: Cloud-based/SaaS and Licensed. Let’s learn more about them.
Cloud-based/SaaS TMS
A SaaS system is also known as a cloud-based system. A cloud-based TMS can either be in a single or multi-tenant system.
Under a single-tenant cloud system, users can customize the software to meet their needs combined with the functionality of the base software. A user can find multiple software versions in a single-tenant cloud structure, and each user can have their own segmented database to operate their business.
On the other hand, in a multi-tenant cloud system, all users have to share the same technology within a single database. The users of each company can tag and protect their data, making it impossible for others to access it.
All users have access to the same software functionality under the multi-tenant cloud structure, as no customization is available.
A cloud-based system can operate in its own private corporate network environment and not over a public cloud.
Licensed TMS
With licensed software, the company has to purchase the software license and operate it on its own corporate network. Licensed software can also run its software platform on a shared third-party server.
A company may opt for a hosted server because it helps reduce hardware costs and the need for IT support resources, and it places the security and the contingency in the hands of the professionals that manage server networks efficiently.
How Long Does It Take to Implement a TMS?
The following important question is, how long does it take to implement a TMS? Ultimately, the time depends on the complexity level of your network and how many other systems the TMS needs to integrate with.
For instance, it can take a few days if you are a first-time user who wants to switch from spreadsheets to a simple platform. On the other hand, businesses with complex operations can take anywhere between 1-2 months (for small or mid-scale companies) and 3-6 months (for large-scale companies) to implement a TMS.
During this time frame, everything is included, from the initial meeting to the system being fully operational. A good TMS provider will closely work with your company during the entire process of implementation and help get your team up and running.
The Cost of TMS Implementation
When we talk about the cost of the transportation management system, we need to choose between ready-made or custom-made systems. While ready-made solutions come with a fixed price, the cost of custom-made systems varies.
First-time users can get economical and effective TMS software that costs around USD 36-40,000 within the first year, but if they opt for scaling, the overall costs may grow to USD 900-1,000,000 in 5 years.
As far as custom-made systems are concerned, a business can face huge expenses initially, starting from USD 130-150,000. However, within the next few years, the business may only spend around USD 300-400,000, which is almost 70 percent lower than ready-made solutions.