A TMS (Transport Management System) is the software that runs freight movement: it takes in the orders to be shipped, assigns them to the company’s own vehicles or to carriers, plans the routes, tracks deliveries and keeps track of what transport costs.
What a TMS does
Feature sets vary widely between products, but the typical scope covers:
- capturing transport orders, usually from the ERP;
- carrier selection and rate calculation;
- route planning, which in the more complete systems runs on a route optimization engine;
- delivery tracking and proof of delivery;
- freight cost control and invoice preparation.
Where it sits among other systems
The TMS sits between the ERP, which owns sales orders, master data and invoicing, and the WMS, which runs the warehouse. It learns from one what to ship and from the other what’s ready to leave, and reports the outcome back to both. Data usually moves between them through APIs or exported files.
Plenty of distribution companies don’t run a full TMS. They keep orders in the ERP and plan routes separately, in spreadsheets or in dedicated software. That’s a sound choice when the hard problem is the daily delivery run rather than carrier management. To work out which path fits, see how to choose route optimization software.
FAQ
Is a TMS the same as route optimization software?
No. Route optimization solves one specific problem: which stops go to which vehicle, and in what order. A TMS has a broader scope (orders, carriers, rates, costs) and may include an optimization engine or connect to an external one.
Can Optivo connect to an existing TMS?
Optivo exposes documented REST APIs, so a direct connection is possible when the TMS can call them or expose its own data. Often the starting point is an Excel or CSV export the TMS already produces. What makes sense is decided case by case, by looking at what the system in place can do.