How to Buy a Transportation Management System (TMS)
In today’s market, shipping is one of the biggest expenses for any shipper, growing at a rate of over 5% per year, depending on the lane. There are many variables that go into freight costs, including mode, service level and carrier. Manually trying to lower freight spend can be challenging, not to mention extremely time-consuming. Leveraging technology gives logistics teams the boost they need to become more efficient. By implementing a transportation management system (TMS), companies can keep freight costs as low as possible while still meeting and exceeding their customers’ expectations.
How to Choose the Right TMS
A broad range of TMSs exist in the marketplace. These range from the old-fashioned on-premise systems favored over the last two decades to more recent platforms that live on the cloud and connect users for heightened levels of collaboration.
Some TMSs incorporate features like automatic invoice audit while others can streamline route optimization and yard management. Many incorporate advanced analytics that can help teams make better strategic decisions about their freight. Others provide seamless integrations to external systems like e-commerce platforms and ERP systems.
With all these features and options, how does a company go about buying a TMS system?
It’s important to determine what your company’s needs are before starting the process to find the right TMS.
Understand your company’s goals for deploying a TMS – is the goal to cut shipping costs, improve customer service, become a preferred shipper, consolidate loads, etc.?
Without a thorough understanding of your company’s goals, you could find yourself locked into a piece of technology that won’t scale as your company grows, or locked into paying for features you won’t use. No company is exactly the same, so make sure to choose a TMS that can be configured and scaled to your company’s needs over time.
Think about how your company could benefit from increased collaboration with other players in the industry. When comparing different transportation management system options, find out if the TMS can connect you with an ecosystem of potential collaboration partners. Programs like built-in truckload spot networks can provide you more capacity at better rates.
A TMS should offer the following:
- · Automatic rating, booking and tracking of shipments, managing carriers and communicating with shippers and customers in real-time
- · A network of carriers incorporating all modes with the ability to consolidate and optimize shipments
- · A wide variety of reports and dashboards to monitor cost, shipping status and service levels
- · Management of the carrier bid process from initial set up to tendering of shipments
- · Extensive analytics to manage performance in real-time
- · A quick implementation time and return-on-investment (ROI)
- · Integration with enterprise resource planning platforms (ERPs) and 3rd party applications
- · The ability to track and trace any shipment in real-time, anywhere in the supply chain
- · The ability to easily add functionality as needed such as order and route optimization, dock scheduling, yard management and container tracking
- · Access to a connected community of shippers, carriers, freight marketplaces, brokers, and suppliers
Some TMS providers like Kuebix offer a free version of their technology to help shippers get started and see real results from their operations risk-free. Unlike a demo, Kuebix Free Shipper gets shippers managing their freight and gaining true ROI even before adding modular features and capabilities.
If you’re looking to improve your company’s logistics operations by adding a true, cloud-based TMS, check out The Complete Buyer’s Guide to Transportation Management Systems to get answers to questions like “What should I look for?” and “How much should a TMS cost?” before committing.