A SOLUTION TO RISING TRANSPORTATION COSTS
“TMS solutions provide a freight cost-saving antidote to turbulent and seemingly systemic commercial freight transportation challenges.”
The TMS sector has been growing at a double-digit clip over the last couple of years—and isn’t showing signs of letting up any time soon as a means to improve transportation performance and reduce supply chain expenditures. A TMS may “sit” between an ERP or legacy order processing system and a warehouse distribution module. A typical scenario would include both inbound (procurement) and outbound (shipping) orders to be evaluated by the TMS planning module, offering the user various suggested routing solutions. These solutions are evaluated by the user and passed along to the transportation provider analysis module to select the best mode and the least-cost shipping provider. Other TMS applications have the TMS being fed order information from either the ERP or Warehouse Management Systems (WMS) for execution. Once the best provider is selected, the TMS generates electronic freight consolidation, load tendering, and track and trace to execute the optimized shipment with the selected carrier. The TMS also supports the freight audit and payment settlement process and links back to the ERP system after orders are turned into optimal shipments. WMS programs are common TMS features, as are analytics and an analysis of the shipping operations. While fuel costs have recently stabilized and reports posit that oil prices will remain at or near 80 dollars a barrel for the foreseeable future, nagging challenges in the transportation supply chain continue to nudge shipping costs upward. The combination of persistent driver shortages, the negative bottom-line impact of federal government regulations such as driver hours of service (HOS) rules, and an ever-tightening truckload capacity crunch are playing, and will continue to play, havoc with transportation costs.