Warehouse, Distribution

What is a transportation management system (TMS)?

What is a transportation management system (TMS)?

A TMS ( Transport Management System ) is a transport management software that allows you to optimize logistics operations to the maximum, reducing costs throughout the entire supply chain and improving the customer shopping experience.

What is a TMS system

A Transportation Management System (TMS) is a technological solution to plan, execute and optimize the process of dispatching and distributing goods. It allows connecting and orchestrating the entire logistics chain, automating manual processes for a more efficient and profitable distribution.

It is used to plan cargo movements, sort and purchase cargo in all modes, select the right route and carrier, and manage cargo invoices and payments.

¿Which companies use a TMS system?

In general, any company that distributes merchandise on a regular basis can be a user of a TMS system. From manufacturers, distributors, and e-commerce organizations; to wholesalers, retailers and third-party logistics providers.

Among the featured industries , we can mention:

  • Logistics and distribution: with the exponential growth of last-mile deliveries, these transport software are essential to increase delivery capacity and have full package traceability, keeping final recipients informed about the delivery status.
  • Retail: one of the advantages of transport TMS is that they allow speeding up the dispatch, distribution and delivery process, integrating retailers and logistics operators in the same ecosystem in the cloud, in order to manage them efficiently.
  • Groceries: The distribution of food products requires compliance with regulations and standards to ensure proper delivery. Thanks to the flexibility of TMS systems, today it is possible to have solutions adapted to the specific requirements of this industry.
  • Healthcare: Healthcare organizations are also not out of the reach of these transport management systems which, with the digitization and automation of their processes, allow them to guarantee their critical deliveries on time, in a transparent manner that respects customer privacy.

¿How TMS works?

In order for users to plan, execute, optimize and track shipments, the transportation system (TMS) needs to be integrated with other carrier systems, such as order management (ERP) and warehouse management (WMS) .

These three Supply Chain Management (SCM) perform different functions in order processing in order to manage your delivery on time, in the most efficient and profitable way possible.

Basically, the integrated operation of these three systems works as follows:

  1. Orders automatically enter the ERP system that stores all accounting and billing information, and manages orders and inventory.
  1. The ERP feeds the TMS database with the necessary information so that it can prepare and execute the shipment of those orders (customer name and address, item details).

  1. The WMS is the data source that allows coordination of fulfillment, shipping and receiving tasks in the warehouse.

  1. Through the WMS, the TMS system deals with the management of goods with the carrier, notifying the operator what to pick up, when to do it and where to take it.

  1. The TMS returns the shipment details for the ERP system to update your order information (tracking number, carrier name, costs).

  1. Once the products are taken to the warehouse, the function of the WMS is to correctly label that stock and update the inventory information in the ERP system.

  1. Lastly, the transport TMS prepares the last mile distribution , selecting the most optimal routes and providing all the necessary information to the courier for the timely delivery of customer orders.

In general, the shipment information is also integrated into a customer relationship management (CRM) , so that in parallel the buyer can follow the route of their package and know the status of the shipment, thus improving their experience of purchase .

Benefits of a TMS

In a sector devoid of operators with the appropriate technology, TMS solutions have come to fill that empty place in supply chain management, transforming operations and optimizing the distribution of merchandise for companies. 

The benefits of having a Transport Management System are multiple, among which we can highlight:

  • Optimize pick-up and delivery routes
    Thanks to the TMS software, it is possible to calculate the most optimal route to take with the registered shipments , saving time and costs
  • Improves cash flow
    A good transport TMS will allow companies to reduce their shipping costs, giving them the information they need to optimize moving expenses, such as fuel or carrier overtime.
  • Allows integrated planning and execution
    Its easy integration with existing management systems enables a unified, agile and effective management of routes and loads.
  • Reduce paperwork
    The digitization and automation of business operations through this transport system brings with it a drastic reduction in time, expenses and errors in administrative processes such as billing.
  • Facilitates the management of distributors
    With a TMS it is possible to select the most optimal routes and assign distributors to each route, taking into account the volume of registered shipments, the hours of the workers and the available resources.
  • Optimize inventory management
    Through a TMS system, users can track the status of their orders and shipments in real time. This allows better inventory control, adapting the real demand of orders more efficiently.


The volume of orders is increasing exponentially, the size of shipments is getting smaller, the price per delivery continues to drop and consumers are increasingly demanding. 

In this scenario, having a Transport Management System (TMS) that helps companies manage their resources in the most agile, efficient and profitable way possible , has become a key asset in the logistics sector to ensure growth and sustainability. of their businesses.

Tags: Warehouse, TMS