What are the capabilities to look for when considering a TMS?

As an enterprise shipper, you might be facing significant challenges, including supply chain shortages, international conflicts, and the volatile global market economy, among other disruptions. However, Transport Management Systems (TMS) are becoming increasingly more powerful, assisting businesses in overcoming these issues by providing real-time visibility and multi-party collaboration to create streamlined transportation operations.

Selecting the right TMS platform for your supply chain can be a complex task. Consider these key capabilities to help you make an informed decision.

Carrier Connectivity

The capacity of your TMS provider to really connect (not just offer an API) with any carrier/forwarder you are working with is key. Your ability to communicate, and exchange data is essential to ensuring operational savings. While this multi-party communication might seem like the minimum scope when acquiring a TMS, it is not.

Various TMS providers just offer an API and not these real connectivity capabilities. Lacking these will add costs, extend implementation efforts, and frustrations. Most likely, some carriers/forwarders will not be connected to your TMS, forcing you to rely on manual processes.

Consolidation and Optimization

A great TMS can analyze all orders to identify opportunities for consolidation into one shipment (or multi-stop truckloads) utilizing private fleets, contract carriers, or routing through pool points. This capability is crucial for reducing freight charges by sharing costs through multiple shipments, even if they have different origins and destinations.

To achieve this level of service, a highly developed algorithm and precise data are necessary to consolidate and accurately calculate freight costs and delivery times.

Automatic Carrier and Mode Selection

One of the main goals for companies is to reduce costs while meeting customer expectations by selecting the most cost-effective, fastest, and reliable carrier. Booking requests should be sent to carriers, brokers, and forwarders to secure the shipment with an optimal provider.

Key factors to consider include lead time, carrier capacity, base rate, accessorial charges, real-time visibility performance, and carrier reliability. Evaluating these criteria will help determine whether Less-than-Truckload (LTL) is suitable compared to Full Truckload (FTL) or parcel versus LTL, etc., ensuring the best rates and capacity are identified.

Real-Time Visibility with ETA Calculations

Real-time visibility tools have emerged as crucial factors in enhancing customer satisfaction. However, experience shows that having a truly integrated visibility solution as part of your TMS ensures you receive the highest data quality. Obtaining high-quality data and accurate ETAs reduces false positive exceptions, enhancing the experience for both your operations team and customers.

Freight Charge Calculation

Shippers need access to a detailed breakdown of freight charges and additional costs across all transport types and modes. A TMS can facilitate this information, providing valuable insights into total costs. Moreover, an advanced TMS can allocate these costs among multiple shipments.

Business Intelligence (BI) Tools

Accessing data can be a daunting task, especially when dealing with many shipments across different transport modes. However, with a BI tool, businesses have data at their fingertips. This tool allows users to analyze information, run performance reports, and track graphical data. It also provides companies with a comprehensive view of their operations, enhancing decision-making and processes.

Invoice Control

This TMS feature offers effortless control over freight invoices. Companies can ensure invoice amounts match the agreed freight rates with an invoice audit or pre-billing. Once the carrier’s invoice instructions are uploaded, the details are compared with the freight charges and surcharges, allowing for accurate payment processing.

CO2 Reporting/Tracking

With the increasing regulations concerning greenhouse gas (GHG) emissions, it is vital to collect accurate data to comply. A proper TMS will be capable of managing all your shipments across any transport mode. This will also help you make the optimal choices when selecting carriers or transport modes and minimize your carbon footprint.

If you’d like to discover how a TMS can help optimize your business and streamline your supply chain processes, download the Descartes TMS Buyers Guide.