Transport management system (TMS)

A TMS is used mainly by shippers, carriers and logistics providers that move goods regularly, often by road. It holds carrier contracts and rates, suggests the cheapest or fastest carrier for each order, combines orders into loads, plans routes and stops, tenders loads to carriers, and dispatches and tracks trucks. After delivery it checks carrier invoices against the agreed rates, a step called freight audit, and reports cost per shipment, lane or customer.

A TMS is often confused with freight forwarding software, and the two overlap. A TMS optimizes a company's own transport network: which carrier, which truck, which route. Forwarding software manages a forwarder's jobs for many customers, with quotes, house documents, customs, agents and job profitability across sea, air and road. A TMS also differs from a WMS (warehouse management system), which runs the work inside the warehouse.

A TMS pays off when there is volume to optimize: many orders a day, recurring lanes and enough carriers to choose between. A business shipping a few loads a week may get more from a simpler tool. Key questions are how the TMS connects to the order system or ERP, how carriers receive tenders and send status updates, and whether freight audit catches overcharges and duplicate invoices.