For companies routing multi-stop full trailer shipments, a transportation management system (TMS) is necessary to optimize the FTL and LTL components of the supply chain. TMS gives operators the ability to map out route planning, handle freight audit, track payments and orders, and manage carrier and route selection in ways that generate efficiencies that result in lowered costs and increased customer satisfaction.
A study published by Logistics Management in January examined the state of the TMS market and found trends that portend the industry’s future and also show why it provides the best collaboration among shippers, carriers, and customers. These trends include:
Ecommerce driving growth
As more companies expand more of their retail strategy to ecommerce, the more shippers turn to TMS to strengthen their supply chain management. This is particularly true for shippers that spend more than $100 million per year on freight. TMS investment is a preferred solution because it can help move a high volume of goods with greater speed and efficiency than traditional methods.
Return on Investment seen as beneficial
For companies of all sizes, Logistics Management says that the return of investment (ROI) is also one of the most appealing features.
Companies saw an 8 percent savings when they use TMS, which users attribute to three key features: multi-stop route optimization, load consolidation, and simulation and network design. Sixty percent of the companies that saved money said that less than 10 percent of the net savings was absorbed by the TMS itself.
A need for speed remains
TMS operators tend to purchase the system for its optimization, but what they find is that speed is among its greatest assets. The immediacy that TMS naturally generates in providing real-time tracking and reports, as well as a better managed inventory flow, is what customers ultimately notice on their end. Which means that customer satisfaction is strengthened, resulting in continued business in the future.
If you implemented a TMS recently, which benefits did you immediately see? Were any of those benefits unexpected? Share your experiences with TMS in the comments below!
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