TMS Software: FAQ
Transportation management software, or TMS is a major component of logistics solutions. Shippers manage their transportation operating costs in one of three ways: by creating a logistics department in-house, by using a Third-Party Logistics (3PL) provider or freight broker (which is another way of saying outsourcing), or by using online logistics software. The first two options are the most popular among shippers, while using online logistics software to cut out the middleman is a newer solution that is quickly beginning to catch on.
But with growth, logistical needs can change. If you are looking for a new and improved logistics solution, but are unfamiliar with TMS software, take a look at the frequently asked questions below. The answers may be helpful to you and your business needs.
What capabilities does TMS software provide?
TMS software provides shippers with a complete logistics system. It offers:
- The ability to establish and implement rules for carrier selection and shipping routes
- The ability to integrate different shipping methods
- The ability to implement and improve warehouse management strategies
- The ability to automatically print shipping labels
Using TMS software allows shippers to avoid working through a middleman or freight broker and instead operate as their own logistics provider. 3PL provider’s logistics department uses TMS software and the shippers pay for it. Shippers avoid extra costs by simply using the TMS software themselves.
Should I use TMS software in-house or on a SaaS model?
Implementing TMS software on a SaaS model can prove to be a better option for shippers. Not only does it reduce the costs that come with software investment, the SaaS model also cuts out the cost of purchasing new hardware for system support, maintenance fee, and upgrades. The only time in-house implementation is preferred Is when industry standards or company policies prohibit the use of SaaS solutions.
Does TMS software provide the same or as many shipping solutions as a 3PL provider?
The short answer is yes. TMS software can provide the same shipping options as a 3PL provider. In fact, TMS software can provide more options. 3PL may limit your shipping options to those that are only found where carriers post available transportation available loads—an electronic posting system. TMS software is not limited to electronic posting systems, which could help you form relationships with carriers who do not post on those systems.
Is there more than one type of TMS software?
Yes, in fact, there quite a few selections of TMS software for every shipping need. There is TMS software for less than truck load (LTL), full truck load (FTL) and so many more.
Is TMS software good for larger shippers as well as small shippers?
While TMS software is typically used by small and midsized shippers, TMS software is great for large shippers as well. Regardless of the size of the shipper, TMS software can help reduce shipping costs and be a much more cost-effective shipping solution than 3PL providers.