Investing in the Right Transportation Management System
The demand for transportation management systems (TMS) is on the rise. A basic solution manages truck and carrier dispatch, fleet maintenance, driver records, billing and driver pay, and DOT compliance. Additionally, a TMS streamlines operations by optimizing carrier routes, managing customer activity, and reporting analytics. Joe Couto, chief operating officer at HighJump, outlines factors to consider before selecting a TMS.
1. Understand current and future needs. Don't pay for more features than you currently need to run your business. Look for a TMS that offers a building block or modular approach, enabling you to scale and add functionalities when it makes sense.
2. Get the best of both worlds: carrier and broker. You may work with a truckload carrier, a brokerage, or both. These may be separate or blended, and the TMS should be flexible to adapt. For example, a carrier is paid to haul a load. A broker earns income from commissions on each load. Each line's tight margins mean a TMS should maximize efficiencies of both.
3. Know the integrations available. From EDI to trailer tracking and beyond, look for a TMS that integrates with complementary tools and services that meet your unique business needs.
4. Secure regulatory compliance. Avoid costly errors in areas such as maintenance, driver logs, and driver records with integrated tools to manage DOT compliance.
5. Consider the electronic logging device (ELD) mandate. The Federal Motor Carrier Safety Administration requires the trucking industry to implement ELDs for accurate hours-of-service tracking by December 2017. Confirm your TMS offers the integration, visibility, and reporting capabilities that make this possible.
6. Pick a third-party accounting package. Look for a TMS that offers gold-level integration with your existing system, such as QuickBooks or Sage. This combination seamlessly automates billings.
7. Seek a proven system. Ask vendors for case studies or references from companies similar to your own. TMS vendors should have real-world examples of how they meet specific needs, such as running a certain type of trailer or hauling a commodity that requires special parameters.
8. Remember your customers. Choose a TMS that helps with timely and accurate customer communication. Look for options with a secure, online portal where customers can view load status in real time.
9. Spend less time worrying about infrastructure. Businesses are built on reputation just as much as on their services. The right TMS earns trust by proactively addressing customer-facing issues such as late loads and dock time schedules.
10. Be business intelligent. A good TMS provides business intelligence data such as deadhead percentage, revenue per loaded mile, and on-time percentage to analyze how to improve processes.