What Is Transportation Management in Logistics? Everything You Need to Know

When it comes to completing tasks, you’re the type of person who likes things to be optimized and efficient. Heck, you even use GPS navigation to get to your local grocery store and to find the fastest route—even though you might make that journey every day. 

Now, the trick is to bring that level of optimization and efficiency to your shipping operation. And the way to do it is by implementing cutting-edge transportation management systems. 

This article explores transportation management in logistics. We’ll explore how transportation management can help you run the most efficient system possible to maximize profitability and delight your customers.

What Is Transportation Management?

Transportation management refers to the end-to-end oversight of shipping operations. This includes everything from drivers and fleets to order and customer documentation. 

Up until recently, transportation managers used paper and spreadsheets to keep tabs on operations. This process was time-consuming and risky. 

However, the shipping industry is now in a state of digital transformation. More companies are using technology to streamline operations. 

As a result, most management operations are transitioning to software and mobile apps called transportation management systems (TMSs). And these new solutions are changing just about every aspect of the industry. 

How Shipping Companies Use TMSs

At the end of the day, there are a variety of ways to use a TMS in a shipping environment. With that in mind, here are some of the ways shipping companies use TMSs to manage daily operations. 

1. Schedule and Track Drivers 

Drivers are the lifeblood of any shipping operation. Without drivers, products can’t move across the supply chain—plain and simple. 

Supply chain managers use TMSs to coordinate with drivers. This includes everything from coordinating schedules and making sure there are enough people on call during the day to watching their shipping deliveries in real time. 

2. Plan and Optimize Routes 

Routes can change unexpectedly—even daily routes that drivers travel consistently. For example, construction may increase traffic in a certain area. Or different routes may open—such as roads or bridges—shortening the length of time between a driver and their destination. 

A TMS uses GPS navigation and onboard telematics to automatically optimize routes. This, in turn, ensures drivers make the most efficient deliveries possible. 

With the help of a TMS, a driver can even change routes mid-drive to avoid unexpected delays and reach the customer faster. 

3. Enhance Customer Experience 

The customer experience (CX) is one of the most important metrics in shipping today, as customers have endless options at their fingertips. As such, shipping companies need to go above and beyond to protect and optimize CX at all times. 

Some TMSs coordinate with customer relationship management (CRM) dashboards, helping shipping companies track customer information and share notes with team members. 

This can have a big impact on overall CX. 

For example, a customer may request no deliveries on Tuesdays between 11 a.m. and 1 p.m. A team may run that request through a CRM system, which then communicates with a TMS, ensuring the customer’s request is handled accurately.

4. Lower Shipping Costs

Shipping can be expensive, and companies need to track a variety of metrics to keep operational costs at a manageable level. For example, companies need to measure gas prices, vehicle wear and tear, and fees.

With the help of TMS, shipping costs can be automatically calculated, providing managers with daily, monthly, and annual pricing forecasts. 

In fact, some systems even use advanced artificial intelligence (AI) to make pricing predictions and help managers form budgets and make decisions. Furthermore, software can take the guesswork out of budgetary planning. This helps shipping teams stay on track and under budget. 

5. Track Inventory 

Inventory mismanagement can create havoc in a shipping operation. When customers place orders, warehouse teams need to quickly locate items, pull them off the shelf, and get them onto trucks. On the other hand, when products aren’t in stock, customers may take their business elsewhere instead of waiting days or weeks for replacements to come in. This is particularly likely if they have customers and supply chain partners who are waiting for items. 

A TMS can serve as a trusted link between shipping and warehouse teams. The TMS can enable real-time alerts, automatic orders, and new requests—all from a centralized dashboard. 

TMS: A Must-Have Technology for Shipping Providers

Over the last few years, TMS has become increasingly prevalent in the shipping industry. At first, just a handful of companies were using it. But this has grown considerably over time. In fact, the global TMS market is on pace to reach $17.8 billion by 2025, up from $7.7 billion in 2020. Any way you look at it, that’s impressive growth.

As such, the technology is no longer a differentiator for trucking companies. It’s a critical business enabler—and something that all companies need to consider to remain competitive. 

Unfortunately, companies that don’t remain on the cutting edge of TMS technology give their competitors an edge. And they might even have a hard time staying in business altogether. 

How Does TMS Technology Work?

Most systems today are cloud-based. This means managers don’t have to worry about installing or managing any hardware. Instead, they can access TMS through the cloud and deploy it seamlessly to all endpoints over a distributed shipping network. 

Systems tend to vary from provider to provider in terms of requirements, workflows, and the overall user experience. However, most systems come with a single dashboard that team members can access over just about any computer or mobile device.

To use TMS technology, simply find a provider that fits your needs and integrate its software into your workflows. Some providers offer niche services, while others are more comprehensive, offering end-to-end shipping management services through a single platform.

Top 3 Transportation Management Providers to Consider

Let’s look at the best-known providers, so you’ll have an idea of how to compare them.

1. Trimble 

Trimble is one of the most trusted names in shipping. Their TMW Suite is a full-scale management tool, providing end-to-end management from order to cash. In addition, Trimble offers TMW TruckMate, specifically for fleet management.

2. McLeod 

McLeod is another leading provider of trucking software and TMS solutions. The solution is great for dispatch, fleet management, document imaging, and business process automation, to name just a few examples. 

3. Tailwind

Tailwind offers an all-in-one TMS solution, streamlining everything from accounting and administrative work to dispatching and customer operations. The platform comes with no setup fees or contracts, making it easy to deploy.

Integrating Vector With TMS

All three of these TMS solutions can transform your operations. But Vector can help you extend your investments even further.

Vector is a mobile-first transportation management provider and workflow enabler for shipping providers.

You can use Vector’s applications for a variety of services. Some of these include contactless check-in, mobile bill of lading management, invoicing, and document scanning. What’s more, apps are completely customizable, highly secure, and capable of working on both Android and iOS. This gives you the convenience of using the app however you’d like.  

Best of all, Vector can integrate directly with the above-mentioned TMS providers in addition to companies like 3Gtms and GTG. Vector can extend these services and add value to them. As a result, you probably won’t have to worry about replacing any systems that you’re currently using.

Are you ready to transform your operations and bring more efficiency to your fleet? Get started with Vector today. 

This post was written by Justin Reynolds. Justin is a freelance writer who enjoys telling stories about how technology, science, and creativity can help workers be more productive. In his spare time, he likes seeing or playing live music, hiking, and traveling.