The Ultimate Guide: How to Choose the Right TMS Software

In today's competitive shipping landscape, efficiency and cost control are paramount for businesses of all sizes. But, with multiple modes of transport, fluctuating rates, and constant demands for faster delivery times, managing freight logistics can be a complex task. This is where a robust Transportation Management System (TMS) can be a viable solution.

What is a Transportation Management System (TMS)?

According to Freightwaves, Transportation Management Systems (TMS) are logistics software solutions used by shippers to streamline and optimize all aspects of their freight logistics operations. The software acts as a central command center for their shipping needs, providing real-time data, automating tasks, and offering powerful tools to manage every step of the journey, from order placements to final delivery.

Choosing the right TMS software can be an overwhelming task though, especially when there’s a growing number of TMS solutions available now. But, investing time to evaluate the requirements of a TMS specific to your business needs can prove worthwhile as it helps to streamline operations, optimize costs, and boost your bottom line in the long run.

Understanding your business needs

Every business differs in size, requirements, and industry. This is why it’s most important to start from assessing them before even looking at what a TMS provides and a successful TMS implementation largely depends on it. Here are some factors that are worthy to be assessed:

Identify the challenges to address

The thought of investing in a Transportation Management System literally arises from the need to solve challenges and listing them down is a great start to understand your requirements better.

Are you struggling to secure the best rates? Do you lack visibility for your shipments? Are your processes way too inefficient? Or are you facing communication gaps between your team and carriers? Check in with your team members for a deeper dive to find out which part of the freight management process is the root of the problem.

TMS goals

Once you have determined what your freight management challenges are, it should become clearer for you to define what you expect out of a TMS.

If one of your key challenges is inefficient processes, the TMS should be able to streamline workflows or establish asynchronous communication between teams to expedite shipments. If visibility is a problem, you should expect the TMS to empower your team with real-time shipment tracking or establish better collaboration within your supply chain network.

Business size and industry

While there's a vast array of TMS solutions in the market, each of them have their own strengths and could be better suited for certain business types, depending on the company’s size and industry.

For example, a large MNC managing complex global supply chains might require a robust TMS with features like advanced analytics, multi-modal support (think air, ocean, ground), and robust security protocols. On the other hand, a smaller, domestic-focused business might prioritize user-friendliness and potentially a solution at a more affordable price point.

From an industry level, an e-commerce company which thrives on speed and efficiency, might prioritize features like real-time inventory management, fast order fulfillment options, and potentially even integration with their online store platform. Conversely, a company in the oil & gas industry might require features that can support hazardous materials and compliance with specific regulations.

Evaluating Transportation Management System (TMS) features

After evaluating your business needs, it’ll be good to understand some of the key features a transportation management system will provide.

Transportation order management

This is where most freight orders begin. The transportation order management feature streamlines workflows between internal teams and logistics personnel. Structured order input and documentation management reduces errors, and improves overall efficiency, which is especially valuable for companies with complex operations.

Some transportation management systems are also able to seamlessly integrate with ERPs or warehouse management systems (WMS) to improve workflows. This also helps to reduce errors as freight details don’t have to be keyed in again manually, which leads to a reduction of costly wrong orders and missed deliveries.

Transportation planning

A transportation planning feature in a TMS enables shippers to consolidate multiple orders into a single shipment, eliminating the need to deal with multiple quotations to get a shipment out. Through this feature, shippers will be able to save more time and be more efficient in transporting multiple orders in time.

Shippers are also able to gain more control over their shipping journey through point-to-point or multi-leg shipment creation, which allows shippers to select the best lanes with the fastest delivery times and freight modes to further optimize their transportation times.

Freight rate management

A freight rate management feature serves as a liaison interface for easy freight rate comparison and efficient negotiation. It streamlines operations and communication with carriers in the shippers’ network and eliminates the need for multiple emails or follow-up calls.

When requesting a quotation, shippers can inform carriers about their shipping criteria by selecting the standardized attributes in the platform. This helps to facilitate a consistent and compliant quotating process, which gives shippers the transparency to make informed decisions.

Shipment execution

A shipment execution feature provides an overview of all ongoing shipments and real-time status updates to inform every stakeholder involved.

Instead of endless email threads, shippers will be able to receive notifications from the carriers within the platform. If required, they can communicate directly with carriers for any queries regarding a particular shipment.

All details and milestones of every order should also be available for reference through an audit trail to help facilitate a clearer communication flow.

Visibility

Visibility features are developed to provide shippers with enhanced tracking capabilities that can offer them more granular shipment updates, all within the system.

These can come in many forms, from a map-based interface that raises alerts to real-time GPS shipment tracking. By knowing the shipment statuses in real time shippers will be able to anticipate imminent disruptions better and mitigate them before it happens. Operations team will also be able to plan better and avoid incurring additional costs such as demurrage charges.

Invoice audit

Freight auditing has been known to be a manual process that’s inefficient and error-prone. This is when invoice audit features of a TMS can help to consolidate all invoices and highlight discrepancies automatically.

In some transportation management systems, there are also in-built resolution centers that allow shippers to resolve discrepancies with carriers within the platform, ensuring a clearly documented audit trail in the event of a lawful dispute.

Some invoice audit features can also be integrated into external management systems, ERPs or business intelligence platforms for compliance purposes. This is especially valuable for companies that incorporate a more dynamic financial system.

Data and analytics

Transportation management systems today have reporting and analytics that help you glean valuable insights to optimize your freight operations.

There are many different metrics that can be tracked in a TMS, such as freight volume and spend, carrier performance, or cost by freight mode. By determining which of them are valuable metrics for the business and monitoring them consistently, shippers will be able to know where to reduce costs and where they can further optimize for better performance.

Key considerations for selecting the right TMS software

It’s always good to do your due diligence to determine which TMS best cater to your business needs. Here are some key consideration:

Here are some key consideration points to consider:

User-friendliness

On the surface, user-friendliness might seem like a trivial consideration. But, bear in mind that freight management is dynamic and complicated. Imagine if your team is saddled with a TMS that has a poor user interface. That adds on to the complication, leads to a waste of resources and hinders the success of transforming your freight management processes.

A good TMS should be developed with a “user-first” approach, that enables users to simplify every task in a freight management process. Take some time to consider your team’s technical proficiency and find product demonstration opportunities to experience the interface as a team to determine whether a TMS is easy to navigate.

Some other user-friendly attributes to look out for include clear menus, readily accessible functions, and minimal training requirements. Ideally, a good TMS interface not only has to be clear, it also has to minimize cognitive load and allows your team to focus on completing tasks with utmost efficiency.

Scalability for future growth

Supply chains are dynamic in nature. Businesses may experience rapid growth, expand into new regions, or even enter a merger with another company. This is when a TMS has to be scalable enough to fit the expanding needs of the business and be future-proof.

Especially for a fast-growing business, adopting a TMS that cannot scale or keep up with the demands of a business will become a roadblock to its future success. As a company expands, it can experience an increase in shipment volumes, expect more carriers to partner with, or even require new functionalities. A TMS with weaker scalability will have difficulty supporting these demands and might also incur a heavy cost if the system needs to be replaced with a more scalable TMS.

Every TMS has its own range of scalability and before deciding to adopt a TMS, it’s very important to determine if it can adapt to the needs of your long-term business growth by determining what are the scalable attributes required. Some of them that’s worthy of consideration include flexible configurations, additional modules, and the ability to handle growing data volumes seamlessly. If you plan to expand beyond your current freight modes, look out for features that support multi-modal transportation.

Integration capabilities

Freight management is only one process in an entire supply chain and transportation management systems are the key software that supports the process. For an entire supply chain to work seamlessly across the board, all other processes that are backed up by other dedicated software have to be synchronized with each other. This is when software integration comes into the picture.

Technically, the more control a business owns in the supply chain, the more important software integration becomes a key consideration to prevent a fragmented data landscape from forming. If left unchecked, it can lead to serious errors, delays, and ultimately, a lack of visibility into entire supply chains.

A great place to start is by connecting with your tech team on the existing tech stack details because different transportation management systems have varying integration capabilities. Consider the important systems the TMS has to integrate with. These could include your WMS, ERP, or even your accounting software. It’s also ideal to find out how seamless data exchange between your existing systems and the TMS be. A seamless integration can eliminate the need for manual data entry, reduce the risk of errors, and provide a more unified view of your entire operation.

Cost and value

Budgets arguably play the most decisive role in deciding whether a particular TMS is to be adopted. But, it’s always crucial to adopt a cost-benefit analysis approach to determine what is the long-term value the TMS brings to the business instead of deciding based on cost.

Consider a scenario where adopting a seemingly low-cost TMS might seem to be a solution that meets the company’s budget. But, it lacks features critical to your operation, forcing you to revert back to manual workarounds or purchase additional software. This can ultimately negate any initial cost savings. Instead, focus on the total cost of ownership, which should provide a more comprehensive picture that includes implementation costs, any potential maintenance fees or training expenses, and the long-term impact on your supply chain efficiency.

Provider reputation

Adopting a TMS is more than just an investment. It’s also about establishing a long-term partnership with a reliable provider. After all, transportation management systems are a dynamic product, and you’ll need to work closely together to ensure its smooth operation and maximize its potential.

The most reputable TMS providers tend to have a proven track record within the industry, with well-established customer relationships and demonstrably successful implementations across various business types. Look out for positive testimonials and case studies that showcase how the TMS has helped companies overcome specific challenges and achieve tangible results. Industry awards and recognition can also serve as valuable indicators of a vendor’s expertise and commitment to innovation.

Customer support

But a truly exceptional reputation goes beyond accolades. An ideal provider should also offer exceptional customer support with teams of experts readily available to answer your questions, address technical issues, and guide you through any challenges that might arise.

So, when choosing a TMS provider, don't hesitate to enquire more about their support structure. A comprehensive onboarding process, ongoing training opportunities, and readily available resources are also hallmarks of a vendor that truly prioritizes customer success.

Proactive measures are also invaluable. Some providers do regular check-ins, performance reviews, and provide access to product updates/enhancements to ensure their TMS continues to evolve alongside your business needs.

Why Cargobase TMS might be your perfect fit

We hope you are now well-equipped to select the right TMS software for your business. You can use your newly acquired knowledge to see if Cargobase TMS is a good fit for your business.

Cargobase TMS is a cloud-based TMS solution designed to streamline freight operations, optimize costs, and provide shippers with greater control over their entire logistics network.

Here’s what sets Cargobse TMS apart:

• User-centric design: Our intuitive interface prioritizes ease of use, minimizing training time and ensuring smooth user adoption across your team.

• Scalable architecture: As your business grows, Cargobase TMS scales with you to accommodate your evolving needs, whether it's handling increased shipment volumes, expanding into new markets, or integrating with additional systems.

• Seamless Integrations: Cargobase TMS seamlessly connects with your existing WMS, ERP, accounting software, or e-commerce platform, eliminating data silos and fostering a unified view of your entire supply chain.

• Cost-Effective Solutions: We offer flexible pricing plans to fit your specific budget and operational needs. Cargobase TMS isn't an expense; it's an investment that pays off by improving cost savings, boosting efficiency, and inculcating a competitive edge for your business.

• Unparalleled Support: Our dedicated customer support team is committed to your success. We provide comprehensive onboarding, ongoing training, and readily available resources to ensure you maximize the value of Cargobase TMS.

Curious to know more? Be sure to schedule a FREE consultation with us to discover how Cargobase TMS can be your esteemed partner to transform your supply chain into a well-oiled system of efficiency, visibility, and cost-control.