Commentary | IT Matters

What Transportation Providers Gain From an Integrated TMS Platform

Tags: Logistics I.T., Trucking, Transportation Management Systems (TMS), Transportation Management

Scott Vanselous is Executive Vice President, Marketing, TMW Systems, 216-831-6606

Transportation service providers with trucking assets have an edge with customers. Compared to their non-asset counterparts, they can directly control the equipment, drivers and facilities to ensure capacity and customer service, keeping commitments and adapting quickly to market change.

Keeping pace with the demands of the marketplace has become increasingly complex, however. Few carriers operate in a simple out-and-back environment any more, with each load counted as a headhaul or backhaul. Besides having complex freight networks, many operate a diverse fleet of equipment and multiple companies or service types under one roof.

It is no longer the exception for a transportation provider to offer a range of services that may include less-than-truckload, truckload, dedicated, specialized, intermodal, warehousing or more.

With an integrated transportation management software (TMS) platform, service providers can gain complete visibility over their diverse and complex operations. The technology can also generate cost savings through operational efficiencies, starting with order entry and carrying through to load execution and billing.

Transportation providers that use integrated TMS platforms can more readily and efficiently expand the services they offer to customers. A customer relationship might begin on the asset side of the business, perhaps by moving equipment into a new production plant. Once the relationship is established, the provider may have an opportunity to move more freight through the non-asset or logistics side of its business with the customer’s production goods.

Whether an order originates as a specialized flatbed load, truckload van, LTL shipment or intermodal container, an integrated TMS platform provides visibility at the enterprise level for all transactions. This visibility is essential to coordinate shipments across multiple types of equipment, lanes, modes and the use of contracted or spot market carriers.

Eventually, companies may land themselves in the position to manage all of a customer’s inbound and outbound shipments. As a full-service logistics provider, they may physically touch all freight that moves through the customer’s supply chain. Both inbound and outbound orders may be brought into their warehouses, staged on cross docks, and loaded onto trailers powered by company assets as well as contract carriers.

Transportation services feed off one another. As an integrated TMS platform efficiently moves orders through the system, organizations with the right visibility can identify and execute on new opportunities to grow their market share and increase profitability.

Putting it all together

As transportation service providers succeed in growing and diversifying their businesses by adding new services and capabilities, they may outgrow the capacity of their existing software to support their more diversified business as a whole. A company may find itself operating one management system for the asset side of the business but purchase a completely separate software application for a startup brokerage division, for example.

Companies that have added separate business lines over time, either organically or with mergers and acquisitions, often find themselves using an assortment of vendor and home-grown software systems. Getting decision-support information and real-time management visibility is difficult when business activity is spread across different software systems, or is still supported by multiple spreadsheet files.

Without an integrated TMS platform as the backbone of a transportation business, companies tend to become reliant on the skills of people who are good at pulling data out of different systems and crunching it in spreadsheets. Inevitably, at some critical point in the company’s lifecycle, this situation creates a bottleneck for management decision making.

The benefits of bringing multiple business entities into one integrated TMS platform are numerous. Besides increasing administrative efficiency, companies can more readily identify opportunities within their own company to reduce operational cost and increase profitability. Finding and accepting more backhauls within dedicated fleet operations is one such example. The ever-present opportunities to consolidate LTL into more cost-effective multi-stop truckload shipments are easier to find and take advantage of with increased business visibility.

As more freight flows through a TMS system, businesses can also find ways to increase driver satisfaction and retention by improving pay and home-time commitments. Greater freight density can also help support route designs that offer drivers more regional and less long-haul trips.

Perhaps most importantly, broader TMS technology gives transportation service providers the information they need to bring more customers into the sales cycle, both on the asset and non-asset business lines. All of the financial, load activity and rating information they need to develop winning proposals can be accessible from one platform.

As transportation providers continue to increase the complexity and scope of their service offerings, an integrated TMS platform to cover all of their business activities becomes essential. Visibility to all areas of their business is fast becoming the real competitive edge these companies need to win new customers and retain the good ones they support today.