Knowledge Post: What is TMS? What functions does it offer, and how can it help businesses reduce costs and improve efficiency?

TMS Transportation Management System: How to Reengineer Logistics and Transportation Efficiency to Help Enterprises Reduce Costs and Boost Productivity?

01  What is TMS and its functions

I. What is TMS System

TMS (Transportation Management System) is a system specifically designed to manage the logistics and transportation process. Its core function is to make the flow of shipping, transport, and delivery receipt more controllable, transparent, and efficient.  

Simply put, WMS Deliver the goods to the warehouse entrance, TMS Responsible for delivering goods to customers safely, on time, and accurately.  

TMS The system automatically matches carriers based on order information, generates shipping documents, and schedules vehicles. After shipment, it tracks the cargo’s location in real time and synchronizes logistics status with both customers and sales personnel, maintaining a complete audit trail throughout the process to enable traceability of any transportation anomalies.

II. TMS What functions does the system offer: Cargo Guide

TMS The main related basic functions are as follows:

Transportation Scheduling: Automatically assigns transportation tasks and routes based on factors such as origin, destination, cargo volume, and delivery time.

Carrier Management: Supports multi-carrier quoting, reconciliation, and performance evaluation, making it easy to select the most cost-effective transportation services.

Waybill Management: Generate standardized waybills and support waybill status tracking and delivery confirmation.

Transportation anomaly management: Delays, lost shipments, and damage can be promptly flagged and addressed.

Freight Settlement: Automated reconciliation and generation of settlement documents, enhancing financial processing efficiency.

ERP System Integration: With the enterprise’s internal… ERP The system is integrated to retrieve order information for display on the monitoring platform, while also enabling real-time transmission of transportation status to… ERP System.

TMS The transportation management function can also be configured via vehicle settings. GPS Hardware devices such as equipment and logistics electronic locks enable monitoring of vehicle location and trajectories, track the flow of products, and deliver value-added functionalities:   

1 Real-time monitoring: Enterprises can monitor the status of all vehicles in real time. ( Position, speed, alarm, and other information );  

2 • Trajectory Playback and Data Storage: Supports trajectory playback and data retransmission, enabling you to monitor vehicle data at any time. ;  

3 Electronic fence management: Vehicle routes can be pre-planned, and the system automatically triggers an alarm when a vehicle crosses the electronic fence. ;  

4 Various alarm functions: overspeed alert, parking alert, yaw‑angle alert, delivery‑time‑out alert, unloading‑time‑out alert, and short‑unloading‑time alert, among others. ;  

5 Freight Calculation: Based on the company’s rate‑calculation formula, the system can automatically compute transportation costs for each route, providing a reliable basis for setting freight rates.  

6 Report Generation: Offers a variety of statistical reports, enabling enterprises to monitor vehicle dispatch efficiency, transportation efficiency, alarm events, and other key metrics in real time.

02  TMS Intelligent System Optimization—Cost Reduction and Efficiency Enhancement

I. TMS System Development Direction: Intelligent Management

Modern TMS It has evolved from a mere operational tool into the central decision-making hub of logistics, capable of addressing end-to-end optimization across the entire process—from order generation to final delivery.

1 , Intelligent Order Management — Automated Order Review & Combined Order Management

Order management is TMS The starting point of system logistics management, which supports multiple channels (telephone, email, ...). API Interface, mobile APP Orders from (etc.) are integrated, and information integrity is automatically verified.

TMS The system automatically reviews orders based on predefined rules, identifies abnormal data, and reduces the workload of manual review.

In addition, TMS It can intelligently consolidate fragmented orders and, based on factors such as cargo characteristics, delivery time requirements, and geographic location, automatically generate optimal shipping batches, laying the groundwork for subsequent dispatching.

In large-volume orders, it is common to encounter shipments with identical or closely located delivery addresses. Consolidating these orders into a single route and assigning them to the same driver can reduce delivery costs, improve load factors, and increase each driver’s earnings per trip, thereby optimizing the utilization of both personnel and vehicle resources.

2 , Intelligent Cable Routing and Vehicle Dispatch Management

1 ) as TMS The “decision-making hub” integrates route-planning algorithms, taking into account the following dimensions:

Cargo dimensions: weight, volume, temperature-control requirements, and hazardous-materials classification.

Transportation Resources: Available Vehicle Types, Payload Capacity, and Driver Qualifications

External factors: real-time traffic conditions, weather alerts, and vehicle restriction policies.

Cost constraints: varying carrier quotes, tolls, and fuel surcharges.

TMS The system also supports “combined‑order dispatch,” intelligently consolidating orders from nearby shipping locations to maximize vehicle utilization.

2 ) Order Dispatch: Efficient Matching of Goods and Vehicles :

Orders are automatically assigned to eligible drivers based on predefined matching rules, with factors such as vehicle type, city, driver experience, distance from the driver to the pickup location, load‑fill rate, and more taken into account.

The transportation industry generates an enormous volume of data. Efficient matching between cargo and vehicles addresses the challenges of low labor‑dispatch efficiency and high costs, while also maximizing alignment with the needs of both drivers and shippers, fostering mutual benefit for all parties involved.

3 Intelligent load planning and dispatch: Enhancing vehicle utilization rates

Goods are loaded onto vehicles according to the delivery order, taking into account factors such as loading sequence (last‑in, first‑out), insertion of urgent orders, and load‑factor calculations.

Dimensions to consider when designing intelligent configurations:

Load factor: actual loaded volume / Maximum vehicle capacity.

Error Rate: The proportion of mis‑packing and omissions. In the order‑fulfillment and consolidation area, cross‑mixing of SKUs during loading often results in incorrect shipments.

Temporary urgent order: An additional order was added during the loading process, requiring a revised loading plan.

Solution:

Smart Load Planning: 3D Loading algorithm simulation tool: After entering the dimensions of the cargo, the system automatically generates the optimal stowage plan.

PDA Scan-and-verify: During loading, each item is scanned individually, and the system automatically cross-references the shipment list.

4 Data Analysis and Intelligent Decision Support

TMS The true value of the system lies not only in process automation but also in its data-mining capabilities. The system has established a comprehensive logistics framework. KPI System:

Performance Metrics: Order Fulfillment Cycle, Average Transit Time, On-Time Delivery Rate

Cost indicators: cost per ton-kilometer, unit‑trip transportation cost, fuel efficiency

Quality Metrics: Damage Rate, Customer Complaint Rate, and Delivery Confirmation Compliance Rate

Resource Efficiency: Vehicle Utilization Rate, Driver Performance, and Percentage of Waiting Time

Through TMS Executive cockpit equipped in the system BI Functionality allows managers to intuitively identify bottleneck stages and KPI Regarding the achievement of key performance indicators, proactively conduct demand forecasting and develop contingency plans to manage peak capacity requirements.

5 , Green Logistics

Part TMS The system has added a “Carbon Emissions Calculation Module.”

Users can automatically calculate the carbon emissions for each shipment based on order data (distance, quantity, weight, and volume) and vehicle data (vehicle model, payload capacity, fuel type, license plate color, emission standards, and fuel consumption), and generate visualized reports. Companies that utilize this system feature can, on average, reduce… 12% transportation energy consumption, achieving a win-win outcome of environmental protection and cost savings.

03  TMS End-to-End Visualized Solution—Logistics Electronic Locks

In TMS In terms of transportation management functionality, hardware devices such as logistics electronic locks can be integrated into vehicles to monitor vehicle location and travel routes, track product flow, and provide actionable guidance for logistics and sales operations. The capabilities include:

1 Real-time monitoring: Enterprises can monitor the status of all vehicles in real time. ( Position, speed, alarm, and other information ); 

2 • Trajectory Playback and Data Storage: Supports trajectory playback and data retransmission, enabling you to monitor vehicle data at any time. ; 

3 Electronic fence management: The center can pre‑define vehicle routes, and the system automatically triggers an alarm when a vehicle crosses the electronic fence. ;

4 Various alarm functions: overspeed alert, parking alert, yaw‑angle alert, delivery‑time‑out alert, unloading‑time‑out alert, and short‑unloading‑time alert, among others. ; 

5 Freight Calculation: Based on the company’s rate‑calculation formula, the system can automatically compute transportation costs for each route, providing a reliable basis for setting freight rates.

6 Report Generation: Offers a variety of statistical reports, enabling enterprises to monitor in‑plant shipping efficiency, transportation efficiency, alarm statuses, and other key metrics at any time.

7、 ERP System Integration: Customizable development, compatible with the enterprise’s internal… ERP The system is integrated to retrieve order information for display on the monitoring platform, while also enabling real-time transmission of transportation status to… ERP System ; 

8 , can be through PC End, APP Perform information queries on the terminal.

TMS When integrated with smart logistics seal locks, digital management enables companies to monitor the status of shipments in real time, ensuring end-to-end traceability and live tracking, thereby effectively preventing cargo damage and loss. This helps drive the entire industry toward greater digitalization and intelligence.

Based on TMS The aforementioned solutions for the transportation management system can drive enterprises toward more refined and precise transportation management:

1 , Powerful billing capabilities

2 , Fleet Management

Supports logistics companies in managing the daily operating costs of their own vehicles, driving-related expenses, driver commissions, fuel consumption assessments, and more.

3 Customer Order Management

Supports customers in entering and submitting waybills, while also enabling waybill tracking and receipt confirmation, as well as order statistical analysis.

4 , Transportation Order Management

Supports CRUD operations for waybills, waybill assignment, and specifying suppliers for waybills.

5 Transportation Monitoring and Tracking Management

Transportation supervision, visualization of load‑matching orders, order visualization, and receipt confirmation.

6 , Billing Management

Supports freight rate maintenance and automatic generation of shipping charges; enables expense entry, expense approval, settlement review, as well as supplementary collection and payment; and automatically generates billing statements.

Summary:

TMS The system is of great significance to enterprises, helping them enhance transportation efficiency, reduce logistics costs, deliver superior customer service, and support transport‑related decision‑making and planning. It is one of the indispensable tools in modern logistics management.