A Transportation Management System (TMS) is a  tool that is aimed at helping business and organizations to effectively manage  its logistics supply chain, and help in organizing the products and materials. A TMS also helps in effectively  managing shipping units, outbound and inbound shipment scheduling,  transportation mode selection, freight bill auditing etc.

Some of the basic functions and advantages of a transportation management system are shipment load planning and shipment routing optimization, routing guide, execution management and carrier communication, shipment tracking, freight bill audit & payment, business intelligence reporting,  returns management, appointment scheduling etc.

The shipment load planning and routing optimization helps the shippers to plan the loading and find a suitable and optimized routes as per their requirements. This helps in saving a lot of money and time and as a results  makes it easy for the shippers to manage.

The routing guide is another feature of a TMS  and this helps the vendors to get an idea about the inbound routing guides for better cost management. The execution management and carrier communication helps them to find the tools needed to assist them in selecting the right carriers along with shipping cost calculation. The TMS also helps you in getting an accurate freight bill audit and also in  implementing the payment part. As with any other tools, a transportation management solution also offers better business intelligence reporting, which helps you to get more insight into your business and ways to improve it.

A TMS or  freight management systems can also be used as an effective vehicle routing software which assists you in the effective utilization of vehicles used for your transportation purposes. It identifies the areas where the vehicles can be effectively utilized  without spending much time and money. Since the TMS identifies the shortest route, it will result in reduced fuel consumption and enhanced fleet management and utilization.

For small companies with small transportation operations, the use of such a tool is not recommended, as they might not have any difficulty in managing all their transportation activities manually. But for a big company having  a large number of vehicles and transportation activities, it is a better  idea to avail the services of a transportation management system, as it will ease their management activities and help them to save  a lot money.

More and more companies have started using transportation management software and hence the demand and competition for this tool have increased considerably.  As a result the number of companies providing customized transport management system has increased. Some of the software offered are not having the expected quality and one must be sure to select the right and the best transportation management system for their company. There are also many routing and scheduling software having advanced options such as GPS vehicle tracking or GPS fleet tracking system.  So while buying the transportation scheduling software or transportation routing software, make sure that you have spend the money on the right tool.