Top 3 Benefits of a TMS for a Smaller Business?

Some shippers believe the only way they can negotiate discounted shipping rates is through a 3PL. Others are convinced that upgrading software solutions that are based on their business size or volume of freight movement is the key.

Neither of these statements are 100% factual. 

While a 3PL can help with the shipping rates and integrating technology to improve freight movements this is not the only option available to shippers. The reason we are bringing up these misconceptions is that it applies to today’s topic – is your business big enough for the benefits of a TMS?

A transportation management system (TMS) is a sub-software of supply chain management software platforms. These platforms help companies optimize their planning and execution. And contrary to popular belief, your business does not need to meet annual shipping numbers to benefit from using one.

In this blog post, we’ll break down the facts about TMS solutions. We'll discuss how they are beneficial and how businesses of all sizes can benefit from their integration. 

What is a TMS?

A TMS or transportation management system is a robust platform that helps shippers, manufacturers, fulfillment centers and 3PLs streamline the process of finding the right carrier and freight mode for each shipment.

The system permits users to connect to carriers within a variety of different shipping modes. More often than not, these include LTL, FTL, multimodal or intermodal, and parcel services. From a single dashboard, a customer can receive multiple estimates simultaneously, schedule movements, and even track the shipment in-transit.

The majority of TMS solutions are connected to the cloud, which basically means they can be accessed from any remote device with a secure internet connection. The system can also be configured for mobile connectivity, which permits additional flexibility of connection. This type of customized feature is especially helpful for smaller volume shippers. Generally, smaller volume shippers require simplicity with each platform or software solution they use. 

Most TMS systems can be customized with apps, tools, and programs to suit the needs of a specific business. For example, if a shipper mainly deals with LTL shipping, the TMS can be built to enhance and simplify that mode of transportation. Likewise, if a fulfillment center depends on overnight or parcel shipments, the TMS can be set-up for those applications. 

What are the Benefits of a TMS for Smaller Shippers?

There was a time, not too long ago, when the main consideration of buying a TMS was the cost. Today’s technology alongside the integration of APIs has made custom TMS configuration simple, streamlined, and much more affordable. This flexibility and cost-friendliness makes it easier for the smaller shipper to have developed, integrate, and use daily.  

There are a few specific tasks that can be simplified by using a TMS including:

Freight Planning Easier

If a shipper has an existing CRM, or supplier management system, their TMS can likely connect with them, which improves the process of planning freight movements.

Information from the customer profile in the CMS can be uploaded through the TMS. This information then populates a new customer entry file. Through that file, the shipper can store records of shipping, including the carrier used, the routing numbers, time of pick-up and delivery, and other various important data. It makes managing transportation solutions easier and provides a simple to navigate platform to recall information from multiple devices. 

Finding the Best Rates for Specific Movements

When you have connectivity to a larger TMS network of qualified carriers, you are able to find the best rates, the perfect carrier, and the most efficient mode of transportation.

This feature is especially beneficial for the small volume shipper who has multiple shipping needs. For example, if they ship FTL for importing supplies for manufacturing, but ship LTL to customers purchasing their products, they can access both from a single TMS. 

Improves Communication

The modern TMS also includes multiple communication tools that permit you to connect with carriers, 3PL’s and customers. Furthermore, it can be configured to send emails, SMS, or even desktop alerts to users when the carrier sends an update.

This can include the time of pickup, any freight delays, and expected arrival. This permits the customer to better utilize their resources and ensure they are available to accept the delivery. This, in turn, reduces missed deliveries and helps save on shipping costs. 

Final Thoughts

The benefits of a TMS are many!

The ones we’ve listed here are available to shippers of any size, scope, and volume. They are not dependent on having a large network of carriers, or multiple movements per day. While these robust systems help improve efficiency for large companies, they can benefit smaller shippers as well. 

If you manage a smaller shipping business and would like to explore the unique features of a custom TMS solution for your company, contact the leaders at Redwood Logistics!