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Transportation Management Systems

Transportation Management systems are cross-departmental programs designed to automate multiple aspects of shipping and logistics, as well as transport availability and utilisation to ensure optimal order and supply delivery. Common features of Transport Management software include live driver tracking, billing & invoicing, and fleet management. Find the best transportation management solution for your organisation in Australia.

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Transportation Management Systems Buyers Guide

Transportation management systems are a cross-departmental business software solution, allowing organisations to manage and otherwise oversee operations related to transportation. This can include accessing important information on transport usage and availability, along with planning many of the processes associated with shipping and logistics. Furthermore, the software can automate some of the tasks or activities associated with transportation management, freeing up more time to spend in other areas, including those where automation cannot be achieved.

Although the software is most commonly associated with shipping, delivery, or importing and exporting businesses, a transportation management system, or TMS system, may be used by any business that operates a fleet of vehicles. Through intelligent and effective use of a software solution of this kind, a business can carefully manage field workers, optimise their usage of vehicles, and provide drivers with valuable information that can make their job easier.

Some of the main activities that are typically managed through transport management software include scheduling deliveries or journeys, management of a business' fleet of vehicles, and the optimisation of routes, to minimise delays and reduce risk to drivers. However, it is essential to understand that these solutions are usually cross-departmental, meaning there are also likely to be options related to customer relationship management, order management, carrier management and much more besides.

There is usually significant crossover in terms of functionality with other software categories, with some of the main examples including route planning software and shipping software. With this in mind, transportation management software may be able to be used as an alternative to these solutions, or it may be possible to integrate these solutions with a TMS system, resulting in an improved understanding of transport issues.

While there can be some significant differences in terms of the additional features on offer and the range of additional departments within a business that may be able to utilise the software, most transportation management systems will have similar core functionality. Moreover, some features are common to the point of helping to define this software category. Generally, these systems will allow users to:

  • Continually manage a fleet of vehicles and keep track of relevant maintenance information
  • Plan shipping or delivery routes and track the live status of drivers or specific vehicles within the fleet
  • Track performance data, including fuel usage, delivery times, distance travelled, and number of hours worked
  • Manage orders and logistics, deal with carriers, and provide updates to customers or business partners

What is transportation management software?

Transportation management software is the collective name given to software solutions intended to assist businesses with several tasks related to the management of transportation. Most commonly, this means businesses involved with importing, exporting, or providing delivery services. However, the software can be used by any business with needs in this area or any business that operates a fleet of vehicles, including those offering passenger services. Essentially, the software serves as a central hub for accessing crucial data and providing information to field workers.

Through the use of transportation management systems—or TMS systems—companies can oversee many of the operations related to shipping and logistics. Some of the most predictable or repetitive tasks can also be automated, which frees up more time for employees and managers to focus on more complicated activities.

In particular, transportation management systems can allow businesses to schedule deliveries, work more collaboratively with carriers, and plan out the ideal routes for drivers to take to limit disruption and minimise any risk to the drivers' safety. Beyond this, the software can get real-time insights into the current status of a fleet, the amount of time deliveries are taking, and the maintenance status of vehicles. Furthermore, high-quality software of this kind can track individual vehicles within a fleet and even identify their precise location.

What are the benefits of transportation management software?

The benefits of transportation management software are primarily linked to the ability to track important information about a fleet of vehicles and the vehicle operators and to bring together information relevant to different business departments. However, software of this kind can also make it easier to carry out many tasks, improving overall efficiency and productivity. Furthermore, buyers should understand some of the specific advantages linked to acquiring a software package within this category. Generally speaking, most solutions will be able to provide users with the benefits that are outlined below:

  • Centralised processes: One of the biggest advantages of transportation management systems is the centralisation of various processes. Most of the best solutions include cross-departmental functionality, allowing critical information to be accessed by decision-makers in different sections of a business. For example, many TMS systems will bring together features related to order management, dispatch management, customer relationship management, carrier management, shipment tracking, live tracking, routing, and more. Having all the associated data stored in a centralised software solution can make it easier to find important information. However, it also means that different departments within an organisation can share data and communicate more effectively.
  • Employee monitoring: Transportation management systems can allow businesses to monitor field workers and others involved in transportation and logistics processes. Many of the best transport manager software solutions allow businesses to view live location and status information, which allows them to accurately track performance and activity. Although employee monitoring needs to be carefully balanced to avoid invasions of privacy or a negative impact on trust, research has found numerous benefits. A Capterra survey on employee monitoring found that ensuring staff are never underpaid for the work they do, tracking over time, gaining improved insight into daily business operations, and achieving a better understanding of precisely who the top and bottom performers are in a company were among the most frequently cited benefits. Transportation management systems provide a level of employee monitoring without becoming overly intrusive, and this also means fleet operating businesses will not need to invest in a separate, dedicated employee monitoring software package.
  • Automated activities: Another significant advantage associated with using transportation management systems is the ability to automate many of the more repetitive, predictable, or mundane tasks associated with shipping, dispatch management and logistics. This can include automatically sending tracking updates to customers, automatically updating performance data, and automatically receiving alerts about action that needs to be taken. Automation has many possible benefits, including ensuring that action is taken at the best possible time and prevent tasks from being overlooked. Artificial intelligence does not require rest or time off. Therefore, this means actions can be carried out on a 24/7 basis, at any time of the year. Furthermore, through automation, more time is freed up for employees to focus on other areas and this can ultimately help boost the overall productivity levels of an entire organisation, resulting in improved business outcomes.

What are the features of transportation management software?

The features of transportation management systems assist businesses with the management of transportation, shipping, passenger services, and relevant logistics. Different solutions on the market may target different business sectors. For example, some software solutions are aimed at international exporting companies, while others target local delivery companies. Some target businesses offering passenger services, while others target companies with field workers operating in the local area. Nevertheless, there are some common features in the majority of solutions, and this includes the following:

  • Fleet management: Overseeing all critical information related to a fleet of vehicles. Most commonly, this will be a fleet of cars, vans, lorries, or similar road-based vehicles. Yet, depending on the nature of the business, this fleet could also consist of trains, aeroplanes, helicopters, or ships. Regardless, most fleet management solutions of this kind will allow users to track the location of specific vehicles, plan out vehicle usage, manage vehicle availability, monitor information related to maintenance or repairs, and continually track the distance a specific vehicle has travelled. This then makes it much easier for organisations to select the right vehicle for the right task, and to make important decisions about removing vehicles from service and acquiring replacement vehicles or new additions.
  • Order management: Accept shipping orders or requests for other services that require fleet vehicles and manage the various stages associated with processing those requests. This can include order confirmation, order execution, status tracking, sending confirmation emails, and creating and provisioning invoices. All of this can be handled from within the software—maximising efficiency—and invoicing and the sending of confirmation emails can often be fully automated so that employees can work on more demanding tasks.
  • Live driver tracking: Monitor the precise location of each driver and keep up-to-date with their status and specific individual needs. In many cases, this functionality will be compatible with in-vehicle devices, such as digital tachographs or electronic logging devices. Through this function, organisations can understand where drivers are, provide updates to customers, make in-the-moment decisions with a clear understanding of current circumstances, and maintain compliance with driver rest periods. If a driver becomes lost, instructions can be issued, while in the event of an accident, location details can be provided to emergency services.
  • Shipment tracking: Generate tracking information for orders sent to customers or for orders being imported. Throughout the journey from the departure point to the final destination, the software can provide updates, allowing users to know when the package has reached key milestones along the way. All of this enables an organisation to stay fully up-to-date with shipments and make plans accordingly. In addition, when necessary, it can help customer service staff to provide much more accurate updates to customers or business partners.
  • Carrier Management: Communicate with shipping companies and other carriers to select the best carrier for each situation based on time constraints, the delivery destination, the budget available, how much the carrier will charge, and other relevant factors. Carrier management functionality will generally provide quick and easy access to the top carriers serving specific locations so that requests can be placed with minimal effort. In some cases, requests can be fully automated, and specific carriers are selected as preferred partners.
  • Route management: Plan out the optimal route for a driver to take, save frequently used routes for future reference, and take all important factors into account before deciding on the ideal route. Several considerations should be worked through before planning a route, such as needs related to time, fuel usage, storage, and driver fatigue. Beyond this, external factors can influence the chosen route, including traffic congestion, local events and the weather. The route management function of the best transportation management systems will also allow multiple possible routes to be established so that drivers can make adjustments if they encounter problems.
  • Reporting/analytics: View and monitor reports so essential information is not missed, ensuring that the status of business operations can be continually understood. Reports may include data related to key performance metrics, with examples including average shipping time, customer satisfaction rates, fuel usage, total distance travelled, and more. Much of this data can be collected automatically, and the best software solutions will provide a dashboard where the most critical information can be easily seen. In many cases, alerts can also be set up so that attention is drawn to areas where a business is underperforming or so that decisions requiring swift action are not overlooked. The reporting and analytics component of a transportation management system can also be used to search through records, allow performance progress to be tracked more accurately, and help organisations identify trends.

What should be considered when purchasing transportation management software?

When purchasing transportation management software, various issues need to be considered and given appropriate attention. Ultimately, the process of acquiring the software will differ for each buyer because they will all have their requirements and priorities. Furthermore, buyers mustn't simply seek the best all-around option but instead focus on finding the best solution for their specific needs. An effective way to achieve this is to ask a series of questions, using the answers to inform the eventual purchasing decision. Some examples of questions that can be useful for this include the following:

  • What business types is the software designed for? One of the most critical considerations when acquiring any transport manager software is the specific business types that are being targeted by each available solution. Although some TMS options will target a broad market, many solutions specifically target delivery companies, importers, exporters, companies with field workers, or those offering transportation services to passengers. Each of these business types is likely to have different requirements and priorities. However, even within these categories, needs can vary. For example, the needs of an international delivery company may differ significantly from the needs of a delivery company offering regional services. Buyers need to think about their own needs and then focus on finding an option that provides the necessary features and functionality.
  • How much does transport management software cost? Another vital consideration when purchasing transportation management software is the issue of cost. At the most basic level, buyers should carefully assess the price of different options on the market. However, it is also worth taking the time to dig deeper. Some of the costs associated with acquiring and using the software may not be immediately obvious. However, some of the main examples include the cost of setting up the software, the cost of storing data, the cost of training employees to use the transportation management system, and any costs that may be linked to upgrades and accessing support. With cloud-based options, subscription fees are likely to be a factor, and some software operates using a tier system, with advanced options requiring the purchase of a 'premium' upgrade. Buyers also need to think in terms of value for money rather than simply focusing on price alone. It is usually worth paying more for a high-quality product, which is likely to cater to all needs for the foreseeable future, instead of buying a more basic or short-term option for less money. Yet, the precise needs of the buyer will also depend on the intended uses and the available budget.
  • Does the TMS system comply with relevant legislation? Several important regulations apply to organisations managing commercial driving operations. A good example of this is the fitting of tracking devices to vehicles. Although these devices do have some differences, both are intended to automatically track total driving time, the distance a driver has travelled, the speed of the vehicle, and more. This information can be vital for preventing drivers from becoming fatigued and for keeping workers safe, and compliance is mandatory. Therefore, it makes sense to acquire a software solution that provides support for the relevant industry regulations.
  • Is integration with other software packages possible? Next, it is worth taking the time to think about whether or not different transportation management systems can be integrated with existing software solutions being used or with software packages that are likely to be acquired in the future. In particular, transportation management systems may be able to be integrated with supply chain management software or with logistics software, but there are many other possible integrations, such as calendar applications, workforce management systems, and more. Integration can help reduce the amount of time spent moving between different applications, resulting in a more seamless day-to-day work experience for employees. At the same time, integration can also reduce or eliminate unnecessary data duplication and can ensure that the same data is being used across the board. This can be especially significant given the cross-departmental nature of most TMS systems.
  • Can the transportation software scale up and down easily? Finally, it is worth taking some time to consider the current scale of the business and find a solution that will suit that business size. Then, to take this to the next level, buyers should consider whether or not the solutions they are exploring can scale up and down easily. As businesses grow, the size of a fleet may increase, areas covered by that fleet may expand, and the number of employees may also grow. Some software solutions are ideal for smaller businesses but may not offer the necessary functionality for a larger business of this kind, and the opposite can also be true. For a future-proof solution, however, the software should be able to scale up and down quickly, easily and seamlessly.

The most relevant transportation management software trends also need to be understood and considered before making a purchasing decision. Buyers need to be sure they are investing in an up-to-date solution that will remain viable for the foreseeable future. This requires software developers to have created the software with an awareness of the needs of fleet-operating organisations and the most significant trends, such as:

  • The rise of the internet of things (IoT): The internet of things (IoT) refers to the addition of internet connectivity to everyday items and devices, and this potentially allows data to be sent from different devices to transportation management systems. The rise of the internet of things has helped organisations collect data more accurately and automatically. Buyers should be aware of the capabilities of IoT devices within delivery vehicles, passenger vehicles, and other vehicles that may operate within a fleet. Software should be designed with this functionality in mind, as it is only likely to become more essential in the years to come.
  • Increased reliance on remote working: Over recent years, more organisations have embraced remote working or moved towards hybrid models, where workers are only occasionally required to attend a shared workspace. This trend was further boosted by the COVID-19 pandemic and the restrictions that were placed on unnecessary gatherings of people. As a result of this increased reliance on remote working, businesses operating fleets of vehicles may not always have decision-makers working from the physical workplace, so software needs to be accessible for those working from home or working from other remote locations. It is also worth noting that Capterra's research during the pandemic showed that most workers who went remote enjoyed the experience. This means acquiring software that can facilitate remote working has the potential to boost morale.
  • The popularity of Software-as-a-Service (SaaS): Following on from the last point, one of how remote working is being facilitated is through the use of Software-as-a-Service (SaaS) deployment, in place of an on-premise deployment. Software-as-a-Service (SaaS) solutions work through cloud technology, and software is deployed and managed by a third-party service provider. This allows for rapid startup times, low setup costs, compatibility with a wider range of internet-enabled devices, cloud data storage, and instant updating of data for all users, regardless of whether they are working on-site or remotely. More and more transportation management systems now work through cloud-based deployment, and while there is still some debate about which of the two deployment options is better, the cloud-based model is often preferred by companies with remote and field workers. With this in mind, it is worth considering whether this is going to be the best available solution.
  • Growing demand for mobile accessibility: Finally, it is now more crucial than ever before for fleet businesses to provide mobile access to as much relevant information as possible, and this can include TMS systems. Some solutions may offer a companion mobile app, while others may be cloud-based and allow access through a mobile web browser. Regardless, mobile accessibility can help on-site, remote and field workers, providing around-the-clock access to the information within the software, from anywhere. Mobile accessibility can be important for drivers needing to be alerted to a new job, a recommended route change, or other changes that may impact their current work schedule. In addition to ensuring information can be accessed on mobile devices, buyers should focus on solutions where the developers have optimised the user interface so that it can be easily used and read on smaller mobile phone or tablet touchscreens.