Transportation management system: TMS and fleets

Understanding which system is used in transportation management helps you better plan and organize the management of your fleet operations.

To do this, you need to understand your company's specific needs. This is what allows you to understand whether transportation logistics solutions can meet your requirements.

Whether to optimize routes, manage operating costs or improve communication between drivers and the operations center, purchasing a system to manage transportation operations should be a strategic decision.

Before comparing suppliers, a terminology warning is useful: in the market, “transportation management system” sometimes refers to a specific category, TMS, and sometimes serves as an umbrella term for any software involved in operations. Because the categories solve different problems, a fair comparison starts by naming what each one does.

Explore the following:

• Which system is used in transportation management?
• How does a transportation management system work?
• Benefits of a transportation management system
• What other technologies can be used in transportation operations?

Which system is used in transportation management?

One of the main systems used is TMS, the Transportation Management System. It can serve various purposes, such as controlling operations, recording transportation fees and rates, tracking cargo and viewing revenue, among others.

However, when identifying which system is used in transportation management at each company, the answer varies according to the specific needs and complexity of each fleet operation.

In practice, an operation commonly combines several software systems, and each category usually answers a different question:

• TMS: how the trip is planned, contracted, executed and costed.
• WMS: how goods arrive, are stored and leave the warehouse.
• ERP: how operations become tax, accounting and financial records.
• Specialized fleet systems: how the asset — vehicle, tire or component — is kept fit for the road.

Before looking at feature lists, it helps to answer three questions about your own operation: which decisions are currently made without reliable data; who will enter data into the system daily; and which systems it needs to communicate with. A tool that nobody updates does not produce information — it produces outdated records.

How does a transportation management system work?

A transportation management system (TMS) coordinates and optimizes transportation activities within a company.

Its main function is to simplify and automate processes, making transportation management more efficient and less prone to human error.

This type of transportation control system can include various features, each designed to address different aspects of the logistics chain. Read the list below as a range of possibilities in the category, rather than a fixed package: what each supplier delivers varies by product and purchased modules.

• Route planning and optimization: the system helps select the most efficient routes, saving time and fuel.
• Cargo and order management: TMS enables cargo monitoring and order management.
• Real-time tracking: one possibility offered by this type of system is visibility into vehicle status and location. This is common in the category, but not universal: it usually depends on onboard equipment and a specific agreement with the service supplier.
• Transportation cost control: one of the main advantages of a TMS is monitoring and analyzing operating costs, helping reduce expenses.
• Reports and analysis: the system generates analytical data that supports strategic decisions.
• Integration with other systems: even if the TMS does not fully meet the fleet's needs, it enables communication with other business management systems for a unified view of operations.

There is another layer that often weighs on the choice and rarely appears in feature lists: the operation's electronic tax documentation. In Brazil, the Manifesto Eletrônico de Documentos Fiscais (MDF-e), the electronic manifest of tax documents, model 58, was introduced by Confaz's Ajuste SINIEF 21/10, which requires ICMS taxpayers to use it instead of the Manifesto de Carga, model 25. That same act has accumulated dozens of subsequent amendments, so the rule applicable to each operation needs to be checked in the current text — and the practical question when choosing software is how it integrates with issuing and storing these documents.

Benefits of a transportation management system

Lower operating costs

TMS, like other fleet management technologies, can generate savings in different areas, depending on what is used in your operations.

One possibility is route optimization, which lowers fuel consumption and reduces vehicle wear.

For maintenance, the important thing is to avoid confusing categories: identifying repairs and controlling interventions are better suited to specialized fleet management systems, or integrated modules for that purpose, rather than TMS as a general category.

In addition, efficient cargo management and fewer operating errors help reduce unnecessary spending, resulting in a more economical and profitable operation.

A caveat helps avoid frustration in the project: none of these gains is automatic or uniform. They depend on how organized the operation was beforehand, correct data entry and someone responsible for acting on what the system identifies. That is why it is worth measuring the current cost per route, vehicle and delivery before implementation — without that baseline, there is no way to know afterward what changed.

Greater efficiency and productivity

By automating tasks such as route planning, delivery scheduling and, when the supplier offers this feature, checking the operating status of cargo and trips, TMS allows managers to focus on strategic aspects of the business.

The expected effects are faster delivery times, better fleet utilization and optimized human resources.

With a more efficient workflow, employees can perform tasks more accurately and in less time, increasing company productivity.

Increased customer satisfaction

With faster, more accurate deliveries, shorter response times and improved communication, customers benefit from a more reliable, high-quality service.

In addition, being able to provide delivery status information increases transparency and tends to strengthen customer trust in the company, provided the information promised matches the features actually purchased.

A condition applies here too: information provided to customers sustains trust only as long as it is reliable. Promising a level of detail the operation cannot maintain usually costs more than making no promise.

What other technologies can be used in transportation operations?

Warehouse management system

A Warehouse Management System (WMS) is a technology focused on efficient storage and handling of goods.

This solution optimizes processes such as receiving, storing, picking and dispatching products, ensuring the right items are stored properly and dispatched efficiently.

WMS offers real-time inventory visibility, minimizes errors, improves order accuracy and optimizes warehouse space utilization. Integrated with the transportation system, it ensures a more cohesive and efficient supply chain.

The boundary between the two categories is useful when deciding: WMS handles what happens inside the warehouse, and TMS handles what happens from the moment cargo leaves. Operations that only provide transportation, without their own storage, rarely need both.

ERP or integrated management systems

ERP (Enterprise Resource Planning) systems, or integrated management systems, are essential for managing various business operations, including transportation.

They integrate several business functions, such as finance, human resources, sales and logistics, into a single system, providing a unified view and facilitating decisions.

The issue to consider is depth, rather than quality: ERP usually treats transportation as one more business process, whereas TMS and fleet systems are built around operational detail. A hybrid final design is not uncommon, with ERP as the backbone and specialized systems in the areas where detail matters.

Specialized fleet management systems

Specialized fleet management systems can serve various purposes, such as maintenance management, tire management or routing, among other options.

This type of tool is becoming increasingly common in operations because it provides a more complete view of specific fleet areas and greater efficiency in transportation activities.

In addition, integration with other technologies and transportation and logistics management software also enables more comprehensive and strategic management.

Fleet systems and TMS tend to complement rather than replace each other. The former handles asset condition — what has already been inspected, what needs repair, how much each intervention cost. The latter handles the trip: who carried the cargo, which route they took, how much the freight cost. Substituting one for the other when purchasing usually proves costly later, when precisely the data left outside the scope is missing.

Ready to transform your company's transportation management with efficient, innovative solutions? Find out how Prolog solutions can contribute to your goals. Explore them now and schedule your free demonstration.