Best Transportation Management

Why Use Transportation Management Software?

Transportation optimization – Optimize transportation activities by allocating human and material resources to operations such as loading, unloading, or driving. Another way to optimize transportation activities is to combine shipments or to define optimal delivery routes to cover as many locations as possible.

Transportation cost management – Reduce transportation costs by avoiding transportation errors, such as shipping the wrong products or delivering items to the wrong customers. Scheduling trucks and drivers can also reduce the fuel consumption and the time spent on the road by employees, which translates into lower operational costs.

Compliance – Compliance with regulations for transportation is particularly important for heavily regulated industries such as food and beverage or chemicals. Companies from these industries require special conditions and equipment for transportation, such as refrigerated trucks. It is also critical for companies to ensure that hazardous and dangerous materials like explosives and poisonous gases aren’t endangering employees or the public.

Customer experience – Improve customer satisfaction by delivering the right products to the right customers at the right time. This is particularly important for large companies with thousands of customers and a large variety of products that need to be delivered.

Services

Third-party logistics (3PL) providers refers to companies that act as intermediaries between customers and transportation companies. This can be beneficial for small companies who cannot afford to invest in software to manage transportation. Transportation companies can also benefit from using 3PL services, which allows them to expand their customer base.

Who Uses Transportation Management Software?

Logistics managers – Logistics managers use transportation management software to identify the transportation needs of the company and find the best ways to deliver goods to customers efficiently. Transportation managers are responsible for finding the most efficient and cost-effective delivery methods such as air, rail, road, or ocean.

Dispatchers – Planners and supervisors schedule shipping operations such as loading and unloading of trucks, choosing the most efficient delivery routes, assigning drivers to routes, and monitoring shipments in transit from origin to destination.

Drivers – Drivers use limited features, often delivered as mobile apps, to understand what needs to be shipped, where, and how. Drivers also use this type of software to report incidents and any events that may impact their work.

Warehouse and inventory managers – Warehouse and inventory managers use TMS software to plan inventory movements in one or multiple locations. This ensures that goods are ready to be loaded and shipped as scheduled by transportation dispatchers.

Kinds of Transportation Management Software

TMS suites – TMS suites combine multiple products into a package that can be customized based on the needs of the customer. Large companies can benefit from using the various products provided by the same vendor, which are usually better integrated. SMBs can also benefit from using TMS suites by using only the components they need. This type of software is not a good option for small businesses, because it provides advanced features that can be too complex and expensive for small companies.

Point solutions – Point solutions focus on one or a few specific transportation activities, such as delivery or fleet management. These products need to be integrated with other transportation software when customers require advanced features.

Extended TMS – Extended TMS includes features that are not delivered by traditional transportation management software products, such as order management, purchasing or procurement, contract management, or financial settlements.

Transportation Management Software Features

Carrier management – Carrier management helps planners choose between transportation service providers, like UPS, DHL, Schneider, Penske, Maersk, and so on. Planners choose carriers based on the type of service they provide, their geographical coverage, and the price. TMS also helps planners evaluate the quality of the services offered by carriers, which is another important criterion for selection.

Shipment planning – Shipment planning enables transportation managers to schedule shipments depending on inventory availability, the type of transportation, and estimated delivery dates. This module usually includes yard management features to assign trucks to docks for loading and unloading.

Route scheduling – Route scheduling helps dispatchers optimize the distribution routes for deliveries by combining locations based on the distance between them and the type of transportation required. For instance, rail transportation can cover vast geographical regions, while road deliveries are preferable in urban areas.

GPS tracking – GPS tracking uses GIS technology to monitor vehicles and drivers when they’re on the road. This requires the installation of tracking devices on trucks, while drivers can use mobile phones or tablets to share their location and itinerary with dispatchers or customers.

Fleet management – Fleet management helps companies manage their vehicles used for transportation. This type of software is used for maintenance, monitoring of fuel management, and fleet optimization. It usually does not include functionality to schedule and track deliveries, nor features to manage third-party logistics providers.

Trends Related to Transportation Management Software

Platforms – Platforms are combining software and services into one single offering. Businesses can use TMS platforms to manage operations and to find services providers for various activities, such as customs brokerage or third-party warehousing. This allows companies to manage their own operations and find global partners using the same platform.

Automation – Autonomous trucks and delivery robots are still in the experimental phase but may soon disrupt the transportation industry by providing completely automated delivery. This technology hasn’t been approved for commercial use, but it is expected to disrupt the transportation industry in the next decade. When this happens, monitoring drivers will became less important and maintaining the trucks will be critical because of their high value.

The gig economy – Uberisation of transportation refers to the trend to use individual drivers as partners for deliveries. An example is Amazon Flex, which allows people to use their cars to make deliveries for Amazon. Tracking independent drivers may prove to be an important challenge because their vehicles aren’t used exclusively for deliveries.

Internet of things (IoT) – IoT allows transportation companies to connect vehicles, sensors, and mobile devices through global networks. IoT is still in its early stages, but it is expected to enable logistics providers to better monitor drivers and fuel consumption, improve vehicle maintenance by identifying issues before they occur, and better plan routes and delivery schedules.

Potential Issues with Transportation Management Software

Functionality – Not all transportation management software products are created equally. As mentioned above, TMS suites provide advanced features that cover most transportation operations, while point solutions only focus on specific functionality, such as route planning. Buyers looking for software to manage transportation need to carefully consider and compare all options to find the best choice for their unique needs.

Integration – Integration with supply chain management suites or products is essential to exchange information with other departments such as warehousing, sales, and operations planning or inventory management. In addition, integration with accounting and ERP systems is necessary to ensure sales and purchasing transactions are accurately reflected from an accounting perspective.

Software and Services Related to Transportation Management Software

Software

Supply chain suites – Supply chain suites usually include transportation management features, which can be delivered as standalone products or as a module of the suite. Since not all supply chain suites provide advanced transportation management functionality, they integrate with TMS software, either through partnerships or by using APIs.

Warehouse management software – Warehouse management systems track the physical locations of the goods in inventory. This type of software makes it easy for companies to find the products that need to be shipped to each customer.

Inventory control software – Inventory control manages the availability of the products owned by a company to determine how many items can be delivered. When companies have a lower inventory than the quantity ordered by customers, they need to either manufacture or buy the difference to fulfill demand.

Shipping software – Shipping focuses exclusively on what happens between the moment when products are shipped and their arrival at the destination. Shipping software helps companies create and manage shipping documents, such as bill of lading or packing lists, and track the status of all shipments.

Yard management software – Yard management optimizes the physical locations used to load and unload trucks (also known as docks). This type of software is used to schedule trucks based on arrival date, size, or type of goods delivered.

Fleet management – Fleet management ensures that fleets of vehicles are adequately maintained to optimize their use and avoid accidents. Fleet management includes maintenance operations, as well as repairs and equipment upgrades.

Route planning software – Route planning software focuses exclusively on finding the best delivery routes and assigning them to trucks and drivers. This type of software is mostly used by SMB delivery companies that do not have large fleets of vehicles and do not ship large quantities of products from multiple locations.