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7 Ways a TMS Reduces Transportation Costs For Your Business. 

The pandemic has brought many irreversible changes in global lifestyles, from remote work becoming mainstream to online shopping becoming the norm. Even after stores opened and life returned to normal, studies show the demand for online shopping continues to grow. The pressure on shippers and businesses to provide customers with affordable, quick shipping options while maintaining profitability has increased. 

Is it impossible to scale profits with such growth? No, thanks to the many applications, software, and tools that businesses can now leverage to improve their logistics flow. When it comes to transportation costs, a TMS, or Transportation Management System, takes the cake.

What is a TMS? 

In its simplest sense, it is a software application that guides businesses to streamline operations, enhance customer service, and, most importantly, reduce expenses. The real-time data and insights a transportation management system provides enable companies to optimize routes, understand cost-triggering factors, audit shipments for accuracy, and reduce instances of error. 

But does all business require a TMS? Let’s find out. 

Does Your Business Need A Transportation Management System?

Even if your business requires shipping products, having TMS software in place may only sometimes be necessary. Let’s take a look at some instances. 

Very Small Businesses with Minimal Shipping Needs

If your business is just starting and there aren’t many orders at present, it would be possible for you to bookkeep the shipping cost and details manually. If you have a team that manages this, it would be easier.   

However, please note that this would be an extremely time-consuming task that may be prone to errors. If not adequately studied, you can incur higher shipping costs, which is not ideal at your current business stage.

Local or Regional Shipping Businesses

If your business currently does not have complex logistics and serves locally or regionally, a TMS may be optional for your business. As and when the order volumes increase, a TMS can step in to streamline and reduce your transportation costs.

Businesses with Outsourced Logistics

If your business relies on third-party logistics providers (3PLs) or freight forwarders to handle the shipping, a TMS is not required for your business. However, unless a good deal is negotiated with the providers, you may spend a fortune on transportation alone. In such scenarios, you have little control over delivery delays and managing customer dissatisfaction. 

Businesses with Short-Term or Temporary Transportation 

If your business has shipping needs that are not long-term, it may not be necessary to invest in TMS software.

7 Ways A TMS Is A Financial Win-Win For Your Business

Let’s understand how your business can reduce transportation costs using a transportation management system. 

  1. Optimizing Routes & Planning Better

A TMS software analyzes your business’s routes to understand traffic, weather, and other delivery conditions to ensure the most efficient way. This, in turn, helps to reduce transit time, fuel costs, and manual labor by drivers. With faster transit times, your customers receive shipments faster, leading to higher satisfaction, all at lower prices for your business.

  1. Sorting Consignment and Optimizing

TMS software helps you send the right consignments together to save time and costs. At times, it can also help you consolidate goofs, maximizing the capacity of each vehicle. In this manner, you can ship more with fewer transits, saving time and costs. 

  1. Choosing The Right Carriers

If you have multiple carriers operating simultaneously, a transportation management system helps you uncover the costs tied to each carrier and their overall performance. In this manner, you can remove any carrier incurring losses and negotiate better with existing ones.  

  1. Auditing Shipments and Reducing Errors

An audit of shipments is crucial to ensuring your carriers bill you correctly. Manual reconciliation would be effort-intensive and time-consuming. A TMS software can step in to automate the process and audit thoroughly to ensure no false billing is done. 

  1. Providing Real-time Data and Insights

A transport management system allows you to monitor shipments online through the logistics cycle. This helps you prepare and plan for delays, detours, adjustments, or breakdowns that can disturb an otherwise smooth operation. Alerting your team and customers proactively can lead to a better experience. 

  1. Reducing Paperwork and Administrative Efforts

A lot of time is spent on paperwork and manually performing activities that a tool can otherwise automate. TMS software helps you automate administrative tasks and removes the need for human intervention. 

  1. Improving Inventory Management

A transport management system gives you complete visibility of the shipments, goods, and supply chain cycle. This helps to make more accurate inventory forecasts that reduce waste and avoid overstocking. 

Linfa System Solutions: The Right TMS Solution For Your Business

  • Get a tailored TMS solution for your business that solves problems and brings ROI. At Linfa System Solutions, we don’t believe in a one-size-fits-all approach. 
  • Enjoy all the benefits of a TMS without the inherent hassles and associated high costs. 
  • Integrate our transport management system with your ERP for seamless operations. 
  • Leverage our cloud-based architecture that ensures a highly scalable WMS, improving control and increasing efficiency. 
  • Protect your data with Linfa System’s robust security measures, such as data encryption, secure user authentication, and regular system updates.
  • Get a comprehensive audit trail for all operations and organic data using the information from your ERP.

Let’s get in touch and discuss how to reduce costs for your business.

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