Transportation Management Software (TMS)

What is Transportation Management Software (TMS)?

Transportation Management Software (TMS) is a digital platform that plans, executes, and optimizes the movement of goods, providing visibility and control over road transportation from order to delivery. In practice, a TMS centralizes tasks like carrier selection, route planning, dispatching, real-time tracking, proof of delivery, and freight invoicing, helping shippers, carriers, and logistics service providers reduce costs and improve service levels. For a product overview and feature details, see Dashdoc TMS.

A modern TMS connects people, processes, and data across the transport chain. It automates routine decisions (such as rating and tendering), orchestrates workflows (like load building and dock scheduling (Dashdoc Flow)), and consolidates operational data for actionable insights. For road freight, Transportation Management Software (TMS) often integrates with telematics/ELD systems, eCMR/ePOD tools, and ERP/WMS platforms to create a seamless flow of information.

How TMS Works in Road Transportation

In road transport, a TMS begins by importing orders from an ERP or via manual entry. It then groups orders into optimized loads based on constraints like vehicle capacity, delivery windows, driver hours, and road restrictions. Planners use the TMS to select carriers or assign company fleet resources, considering transit times, costs, and service performance.

Once dispatched, the TMS communicates jobs to drivers through a mobile app or in-cab device. GPS and telematics enable live track-and-trace, estimated time of arrival (ETA) updates, and exception alerts for delays, missed time slots, or temperature excursions for sensitive goods. Upon delivery, drivers capture electronic proof of delivery (ePOD)—signatures, photos, and timestamps—which flows back to the TMS for instant confirmation and billing readiness. Finally, the TMS reconciles carrier invoices, audits surcharges, and generates KPIs for continuous improvement.

Key Benefits and Core Components

• Planning and optimization: Load building, multi-stop routing, mileage calculation, and route optimization reduce empty miles and fuel costs.

• Carrier and rate management: Centralized tariffs, contract rates, spot quotes, and automatic carrier selection based on price and service.

• Tendering and dispatch: Digital tendering to carriers, allocation rules, and one-click dispatch to fleet drivers.

• Real-time visibility: Live tracking, ETA predictions, geofencing, and exception management to proactively handle delays.

• Proof of delivery and documentation: ePOD, eCMR, CMR printing, dangerous goods documents, and customs references where applicable.

• Compliance and safety: Driver hours, vehicle restrictions, and temperature control monitoring via telematics integrations.

• Freight audit and payment: Automated invoice matching, discrepancy detection, and cost allocation per shipment or customer.

• Analytics and reporting: On-time performance, cost-per-stop, utilization, CO₂ emissions estimates, and customer service metrics.

• Integrations: ERP/WMS/TMS APIs, EDI, telematics/ELD, dock scheduling, yard management, and accounting systems.

Real-World Example

A mid-size food distributor runs daily multi-stop deliveries to supermarkets across a region. Using Transportation Management Software (TMS), the planner imports orders from the ERP each morning. The TMS suggests optimized routes that respect delivery windows and vehicle capacities, pairing refrigerated loads with compliant vehicles. Dispatch sends routes to drivers’ mobile apps, showing stop sequences and special handling notes.

Throughout the day, store managers and customer service teams track trucks on a live map with ETAs. When traffic delays arise, the TMS flags at-risk stops and proposes resequencing to protect critical time windows. At each store, the driver captures ePOD with photos for any discrepancies. By day’s end, the TMS consolidates costs per route, audits fuel surcharges, and updates performance dashboards—revealing a 12% reduction in miles driven and a measurable improvement in on-time delivery.

Industry Context and Use Cases

• Shippers: Orchestrate contract and spot transportation, ensure service-level adherence, and streamline freight settlement.

• Carriers: Optimize dispatch and driver assignments, reduce empty runs, and enhance customer visibility with live tracking.

• 3PLs and freight brokers: Manage multi-customer portfolios, automate tendering, and provide white-labeled portals for status updates.

Transportation Management Software (TMS) is especially impactful in time-sensitive road freight such as retail replenishment, parcel and pallet distribution, automotive parts, and temperature-controlled logistics. Explore a practical shippers directory use case to see how a TMS supports industry workflows.

Conclusion

Transportation Management Software (TMS) gives road transportation teams end-to-end control—from planning and dispatch to tracking, proof of delivery, and invoicing. By integrating data, automating routine tasks, and providing real-time visibility, a TMS reduces cost-to-serve, improves on-time performance, and delivers the operational agility required in today’s fast-moving logistics networks. Want to see a TMS in action? Request a demo.