What is a TMS? And How to Choose One

While transportation management systems (TMS) are commonly used by large carriers, only 33% of trucking companies operating fewer than 10 trucks use one, according to InMotion Global, Inc.. And only 17% of carriers operating fewer than five trucks use a TMS.

George Thellman, Director at TrueTMS, told us that when he talks to business owners of small fleets and owner/operators, he hears the same lines over and over:

• “My company is too small for a TMS.”
• “I’m doing just fine with my spreadsheets and email.”
• “I’ve always done things this way, why should I change?”

But what those carriers don’t know, says Thellman, is that small trucking businesses are leaving money on the table by not implementing this technology. 

Transportation management systems are not just for the big players in the trucking industry. So let’s talk about what a TMS is, how it works, and how to choose the right one for your business. 

What is a TMS?

A transportation management system can go by many names: a back office, trucking software, or dispatcher platform. To put it plainly, a TMS runs the operations of a transportation company. 

A carrier-focused TMS helps you organize the information for delivering loads and invoicing customers: shippers, receivers, pickup and drop-off locations, type of freight, trucks and trailers, availability of drivers and schedules, customer information, payments, etc. 

“Basically, a carrier’s TMS should track the loads from quote to cash,” says Thellman.

How does a TMS work?

Having too many platforms to get the right information to the right people is a challenge any small business owner can relate to. All the information that goes into running a small fleet is often spread out over load boards, ELDs, and countless emails and spreadsheets.  

A TMS can take in all the information about each load so there’s a single source of truth for your business.

We sat down with George Thellman to look at TrueTMS and see exactly how it helps small trucking companies and owners/operators manage their operations.

“At TrueTMS, we’re creating an ecosystem where everything is built in,” says Thellman, “If you’re running a trucking operation, you need to know where each load came from, where it’s going, and what truck, trailer, and driver are taking it there.”

Once you have all that data in one place, then you can start to answer bigger questions about your business as a whole, like:

• Am I using my trucks and trailers at full capacity?
• What are my biggest sources of revenue?
• Where are my biggest opportunities for reducing expenses?

How to choose a TMS

So you’re sold on getting a TMS for your trucking business. Awesome! Now…how do you choose one?

Here are some questions you can ask yourself when comparing platforms:

1. How easy is it to use?

Few TMSs are built for small businesses. If you’re running a small operation, you probably don’t have IT staff to help you manage complicated software. What you need is something you can learn to use yourself.

Watching the demo of TrueTMS, it’s clear it was designed with smaller fleets and owner-operators in mind. It’s simple to navigate between features and easy to enter in the details for each load. 

2. Does it integrate with the tools you already use?

A TMS should be able to “talk” to the other platforms you use to manage your business: load boards, bookkeeping software, ELDs, telematics, etc. Check the TMS’s integrations before making a purchase and make sure those integrations do what you need them to.

3. Can it complement the processes you already have in place?

Basically, if you implement a TMS, you need to find out what percentage of your business operation would be handled by the technology.

Thellman recommends following the 80/20 rule: if you can automate at least 80% of your operation, even if the other 20% will still be done manually, it’s worth the investment. A TMS shouldn’t add processes to your work; it should help you make the existing processes faster, better, and more efficient.

How to implement a TMS

The decision to implement a TMS depends on the options offered by the specific TMS company you select.

Some have documentation you can review to implement the system yourself, while others have dedicated customer support teams that can help with implementation. Still others, like TrueTMS, offer both options.

Regardless of how you go about learning how to use the platform, you’ll need to have all the information about your business at the ready, including:

• Customers, shippers and receivers
• Driver information, including CDLs, medical cards, and other information in their DQ files (read here for more information on DQ files)
• Equipment information for your trucks and trailers
• Contracts and rates

A TMS gives you a competitive edge.

If you’re running a small trucking business and you’re not using a TMS, soon enough, you will be in the minority. While the adoption of these platforms has been slow among small carriers, their use is growing. 

In fact, some shippers are now requiring carriers to have a TMS to haul loads for them. So, the cost of not implementing a TMS will become far greater over time. It will only get more difficult the longer you put it off.

In short, a TMS can organize operations and make informed business decisions. If you’re looking for ways to improve your company’s efficiency and profitability, it’s a great place to start.