Shippers, suppliers, and 3PLs must abandon paper-based processes and apply transportation management systems to improve supply chain efficiency.
FREMONT, CA : Transportation does not generate revenue on its own. Companies can learn how to optimize it. Underutilized freight capacity, for example, is a common issue when trucks or shipping containers travel partially empty. Even though there are many reasons for this, it is generally due to a shortage of efficiency and automation, like not using digital bills of lading, not knowing the vehicle's load factor, or generating separate shipping orders for each product instead of consolidating them.
Other factors that affect the supply chain include the company not having any idea where the product is or when it will be delivered, or how well the carrier does its job. Generally, shippers, retailers, and logistics service providers may have less understanding of their transportation process. But it is time and necessary to change that.
What is a Transportation Management System?
A transportation management system is a type of software that aids in the planning and executing physical goods movement. It can be utilized by anyone in the supply chain, from manufacturers to distributors to third-party logistics providers (3PLs), almost anyone who needs to coordinate shipments.
The control tower capabilities are the most valued feature of TMS. A TMS control tower collects information about products in real-time utilizing API or EDI technology, providing the users' valuable data from manufacturers to distribution centers, through delivery, and to customers.
This data can then be analyzed to provide insights into the supply chain performance, financial situation, and customer service issues. This is where companies should begin their optimization journey.
Transportation planning features
All related parties, from planners to drivers and customers, have access to order information in a TMS. It's a centralized location where users can view and manage the transportation requests, and it includes these features like entering transport order and order overview.
Most of the TMSs will automatically tender shipments for the company. The list of carriers is always organized to access the vendor based on the parameters they have specified or let the system choose a carrier for them. The majority of systems support broadcast, waterfall, and status tendering techniques.
Shipment rate management
A rate engine is one of the most crucial tools in a TMS. Based on rules such as base rates, discounts, and contract agreements, a rate engine evaluates transportation rates for the parcel, LTL, truckload, and intermodal shipping. A TMS must develop custom pricing rules to cater to the most complex tariffs and send a quote to a client as soon as they make the request.
Companies can organize the loading space of trucks, trailers, and containers and receive an analysis of the accessible loading space while taking maximum loads and weight into account. Users can, for example, enter information about the vehicle measurements and save it for reference purposes, which is identified as master data.