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What features are best in a global transportation management system?

Global functionality is available in the TMS market, but you should look beyond marketing materials and scrutinize your options carefully.

The TMS market is fragmented, but it's moving quickly to provide full transportation management system (TMS) products...

for global manufacturers. Let's take a deeper look.

Buy-side and sell-side carriers

To understand the TMS market, it helps to look at things as either buy-side or sell-side carriers. Simply stated, the buy-side's challenges are to procure freight services that are safe, expeditious and low cost; the sell side's challenges are to serve customers and their freight and to manage fleets and labor.

Diving a little deeper there is a major fork in the road in applications: a consideration of whether you're shipping domestically or internationally. Many TMS applications focus on domestic shipping -- for North America that would be truck, rail or barge. An international focus would be on ocean or air shipping. International TMS software should address planning and execution, as well as customs and security filings. Buyers should seek software that includes automation of customs and security filings, because nothing moves internationally without the customs filing.

TMS software for the buy side should have an established network or community of service providers: carriers, third-party logistics providers, freight brokers, freight forwarders and customs brokers relevant to the geography, mode and commodity of the goods to ship. In this way, the manufacturer can manage selecting and procuring services, execution and visibility of freight in motion to payment on a single platform. The software also should integrate to the content providers for carrier credentials (up to date and proper insurance and safety records of carriers), customs information and rates.

The TMS market and freight

TMS software should be your single window or platform into the freight world. This is an aspiration that major providers in the TMS market are racing toward. TMS providers have added missing modules either through acquisitions, organic development or integration of existing applications. Development has happened so quickly in the past four years that software firms that were not considered in the same TMS market segment now find themselves competing.

Users should scrutinize applications carefully, though, because what the marketing literature says -- "we do ocean" or "we do intermodal-truck to rail" -- may not be precise. Buyers should ask: Just exactly how do you do that? 

Some TMS applications are integrated with their competitors to find rates and then do bookings. They then have to rely on these partners to provide visibility through the execution process. Other TMS providers have developed the connected community of carriers and can perform the booking functions directly with the carriers of the mode.

The international TMS market

The TMS providers who really do international transportation are few. It takes many years to build out the functions and network. The network is important because it allows the system to build a multimode, multileg journey and manage it more effectively. Key players in international ocean or air shipping are Descartes, CargoSmart, and GT-Nexus; players who get honorable mention include Amber Road, INTTRA and WiseTech Global.

Global manufacturers may buy a variety of services from different specialized freight forwarders across the world that have integrated products or work directly with their preferred carriers and are specialist in the region, type of shipping mode (ocean or air) or commodity (high tech, apparel, food and so on). Users are adding a layer on top to provide visibility across the world and their disparate systems and create a worldwide view of goods in motion and total transportation spend. This is quite a common occurrence which then relies on the visibility platform provider to do the back-end integration with other TMS providers. Again the network is key, because the visibility function is most expeditiously performed by those providers with powerful relevant networks.

So, yes, there are suites today that provide almost a total multimode transportation technology. But look beyond the marketing literature and perform due diligence during the selection process. An uneducated buyer will wind up spending a lot of extra money building out functions and integrations and probably still have an ill-fitting setup.

Many ERP users went down that road of trying to integrate a distribution module in the ERP app and came to the conclusion that supply chain and TMS is really a different architecture than an enterprise view of the world. Thus many now standardize on a major TMS or supply chain platform for their inter-enterprise and international processes.

Next Steps

Boosting shipping visibility with Oracle Transportation Management

SAP transport management fundamentals

Integrating warehouse management and TMS for improved efficiency

Two approaches to outsourcing TMS

This was last published in August 2015

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What are the most important global features of your company’s transportation management system?
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