Here’s what to look for in best TMS software for your company freight needs when replacing spreadsheets, custom built software, or outdated licensed TMS software.
Selecting the best TMS software for your industry and company’s freight needs can be a daunting task since there are many options to choose from. Let’s explore what you need to look for when you are shopping for TMS software to replace your spreadsheets, custom built software, or outdated licensed software that you’ve outgrown. Let’s start with a basic definition and go from there.
What is TMS software?
Here’s how Gartner defines TMS software:
“Multimodal domestic transportation management systems (TMSs) are a subset of the global TMS market. They generically refer to the category of software that deals with the planning and execution of the physical movement of goods across the supply chain. This market focuses on holistic multimodal domestic TMSs for use by shippers (such as manufacturers, retailers, distributors and wholesalers) or non-asset-based, third-party logistics (3PL) organizations.”
The main goal of a multimodal TMS system is to reduce freight costs and automate repetitive, time-consuming activities. By reducing freight costs, shippers end up improving their relationships with carriers, gaining real-time visibility in the supply chain, and upping service levels to their customers.
But selecting the best TMS system can be challenging for many companies that ship manufactured industrial freight. This article discusses seven criteria shippers should consider when evaluating TMS software. They are:
- Connectivity to carriers
- Freight shipment visibility
- Multiple transportation modes
- Quick freight settlement
- Intelligent TMS data analytics and reporting
- Speed and ease of implementation
- Responsive system development and support
Connectivity to carriers
Every shipper wants to earn the status of shipper of choice for preferred carriers. The best TMS software can help transportation managers build their own network of preferred carriers that will ship their freight on time even when capacity is scarce.
What leads to shipper of choice status with preferred carriers?
Key is the ability to communicate quickly and securely without resorting to long email threads and back-and-forth phone calls. Better communication results when an integrated TMS software makes it easy for shippers and carriers to communicate using secure electronic data interchange (EDI) or allowing carrier access to the TMS software from a carrier’s own system.
Connectivity to carriers results in the best relationships when a shipper of choice uses a TMS system that supports longer lead times for load building and optimization, more flexibility with delivery windows, quick freight settlement, and shared values for a more sustainable future.
Freight shipment visibility
Continuous improvement requires agility. And agility is only possible when transportation management teams have real-time visibility into the shipment journey, from origin to destination.
Increased supply chain visibility requires a cloud-based TMS system that supports integrations using ready-to-use application programming interfaces (APIs). These seamless and secure integrations allow for connectivity to data from carrier monitoring devices and other systems within the supply chain, including enterprise resource planning systems (ERPs).
Multiple transportation modes
Some transportation management systems support only one transportation mode, which works if a shipper owns or contracts with only one type of transportation, for example, truckload.
But a narrow-focused system can limit a transportation management team’s ability to reduce freight spend. Real cost savings happen when a TMS system allows for the seamless transition between transportation modes when load building. That way transportation managers can optimize load and reduce freight spend by using the best possible transportation mode for a given freight shipment, whether it’s truckload (including intermodal), less-than-load (LTL), or rail.
So, an investment in TMS software in the cloud quickly pays for itself when the TMS software supports multiple modes of transportation within a single platform.
Quick freight settlement
Carriers want relationships with shippers where they can consistently make money on the tendered loads they accept. For instance, good load and route optimization allows carriers to reduce fuel costs and improve on time deliver (OTD), thereby increasing their profits.
Carriers can also increase profits when they work with shippers of choice whose TMS systems support autopay.
Matchpay can cost carriers money because waiting times for payment after freight delivery can be more than 30 days. In addition to the waiting times, negotiating with shippers for each submitted invoice after completing a delivery can be a time-consuming hassle and eat into profits.
With autopay, shippers and carriers pre-negotiate rates, including some accessorial charges. So, a carrier can receive payment upon delivery instead of months later. Any charge discrepancies can then be easily negotiated during the accounts payable audit.
Intelligent TMS analytics and reporting
The best TMS systems provide up to 13 months of robust reporting. But to be resilient, McKinsey says businesses need “to deal with adversity, withstand shocks, and continuously adapt and accelerate as disruptions and crises arise over time.”
This kind of responsiveness requires access to robust TMS analytics and reporting powered by Amazon QuickSight business intelligence. QuickSight uses machine learning’s regressive feedback loops.
According to Steven Banker of Forbes, the regressive feedback loops mean the system learns continuously as more data is added. The more data, the more insights transportation managers have into nonobvious opportunities.
Speed and Ease of implementation
Research has shown that many TMS implementations can take as long as 12 to 18 months.
The problem is, no one in the transportation logistics industry has time or resources for a lengthy cycle of planning and implementing an upgrade to a new transportation management system.
That’s why a cloud-based TMS system can be a game changer for many shippers of manufactured industrial freight looking to build more cost-effective and sustainable supply chains.
Shippers need to look for a vendor who can get you up and running quickly. Very few can.
Princeton TMX can you get up and running in as little as 60 days.
Responsive system development and support
A TMS system is only as good as the development team that supports it. In Gartner’s Peer Reviews for TMS Systems, the best TMS software receives high marks when the development team offers more than code customizations.
They have to be responsive by listening to reviewers’ comments and incorporating code improvements into subsequent system upgrades so all their clients can benefit.
By being responsive to the needs of their customers, the best TMS software solutions can help shippers of manufactured industrial freight quickly realize big savings in freight spend and automate up to 95% of the day to day activities involved in transportation management.
