What you need to know about the Transport Management System (TMS)

The Transport Management System (TMS) is an indispensable tool in the field of international logistics. With the increasing complexity of global supply chains and the recent crises experienced by the sector, a growing number of companies are equipping themselves with a TMS, in addition to other software dedicated to logistics. The TMS market is thus expected to grow by 14.1% per year until 2025.

Today, the equipment rate in France remains low, 10%, which is below the European average and far behind the United States.

This detailed guide explores what a TMS is, its main features, the benefits it provides, its typical users, its integration with other business systems, and the factors that influence its price.

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What is a TMS?

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One Transport Management System (TMS) is a software designed to help businesses manage and optimize their transport logistics. It is used to plan, execute, and monitor freight transport operations effectively. A TMS centralizes information and facilitates communication between all the actors in a supply chain, from the supplier to the end customer.

TMS adoption is particularly high among large businesses, where the need to manage complex global logistics flows makes these systems indispensable.

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Since the Covid pandemic, ETIs are massively adopting these technologies, attracted by more accessible solutions and cloud-based pricing models that reduce the initial cost of implementation.

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More specifically in this article, the first parameter to consider in understanding a TMS tool is its field of action. It may cover one or more of the following perimeters:

• National scope - this type of TMS focuses on road transport
• International scope specific to a mode of transport such as maritime transport for example
• International multimodal perimeter

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What major functionalities can be found in a TMS?

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The functionalities that can be found on most TMS are:

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1. Transport planning and launch

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This feature allows you to prepare and launch expeditions from a single space. It often includes tools to:

• The consolidation of expeditions : Grouping several orders into a single transport to reduce costs.
• Choice of mode of transport : Selection of the most efficient mode of transport (land, sea, air) based on cost, speed and reliability.
• Choice of provider : Selection of transport operators, most often via a freight forwarder. This choice can be made on spot quotation, at the quotation, or according to framework agreements signed with service providers.

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2. Real-time monitoring of operations and billing control

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Real-time tracking is crucial to maintain visibility on all shipments. This feature includes:

• GPS tracking : The tracking can be reported manually by the transport provider or, on some TMS, automatically from the telematics embedded on planes, ships and trucks.
• Alerts and notifications : Automatic sending of alerts in case of delays, problems on the road or changes in the itinerary.
• Dynamic dashboards : Real-time display of KPIs and performance metrics for proactive transport management.
• Storage of documents required for operations

TMS can also offer a billing control module, making it possible to compare the real transport price to the quote/grid.

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3. Operational and financial reporting

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The reports generated by a TMS help businesses analyze their transport operations and identify opportunities for improvement. These relationships can range from the scale of a transport to the mesh produced depending on the software chosen. They cover:

• Cost analysis : Detailed tracking of transport expenses for each line, including costs related to handling, freight, pre- and post-delivery as well as customs taxes
• Carrier performance : Assessment of the performance of carriers based on criteria such as punctuality, compliance with contractual conditions and quality of service.
• Order lifecycle reports : Monitoring of the deadline for each stage of transport, from collection to delivery.

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4. Carbon emissions reporting

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With increasing awareness of environmental impacts, carbon emissions reporting has become an essential feature of TMS. It allows businesses to:

• Calculate CO2 emissions : Assessment of the emissions produced by each shipment and generation of detailed emissions reports for internal and external audits
• Reducing the carbon intensity of transports: Identifying routes and practices that can be changed to reduce environmental impact and generating detailed emissions reports for internal and external audits

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What benefits can you expect from a TMS?

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Businesses that implement a TMS can expect several significant benefits:

• An overall reduction in transport costs, of the order of 3 to 15% thanks to

• 1. an easier competitive process for service providers, which saves 5 to 10% of the transport budget
  2. Applying an invoice control or pre-billing solution can generate savings of around 3% on purchasing budgets
  3. optimizing the loading rate of trucks or containers, which saves up to 5% of the transport budget
  4. The reduction of exceptional costs (storage, detention/demurrage...)
• Improving operational efficiency by eliminating errors and repetitive manual tasks. The estimated time savings are 10 and 15 minutes per transport to the shipper.‍
• Supply Chain Management thanks to reliable and complete data‍
• The increase in customer satisfaction: Improving the accuracy of deliveries and communication with customers.‍
• The implementation of a policy to reduce CO2 emissions related to transport, including both reduction levers and an accurate calculation of avoided emissions.

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Who are the users of a TMS?

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Typical TMS users include:

• The charger: who is the administrator of the TMS and ships goods regularly. Logistics, purchasing, sales administration and import/export teams are often found on the TMS.
• Logistics service providers (3PL): Logistics service providers who manage transport for other businesses. They are mainly freight forwarders.
• The customers and/or suppliers of the charger

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Integrating a TMS with other business software

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A TMS can be integrated with other business systems, mainly ERP (Enterprise Resource Planning) and WMS (Warehouse Management Systems) to provide a complete logistics solution. This integration allows better synchronization of data between sales, inventory, and logistics. These integrations can be done manually (by loading flat files) or automatically using integrations (EDI, API etc.)

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How is the price of a TMS established?

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The price of a TMS varies according to the wealth of functionalities and the volume of transport managed. Costs increase with the level of customization needed to adapt the system to specific business processes.

Pricing is based on the order of transport or on a fixed price basis. The overall price is then between €10k and €250k per year. The return on investment of a TMS is generally less than 2 years and decreases all the more so as the volume of goods transported is large.