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Technology

What Is a Transportation Management System?

By D. Nelson
Updated Feb 24, 2024
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Transportation management is the practice of organizing and optimizing all aspects related to moving goods and services. Professionals who practice transportation management are usually concerned with planning routes, estimating packing and delivery times, and budgeting for cost. A transportation management system is any kind of computer software that helps transportation managers to optimize supply chain processes related to transportation. Most of these programs are designed to assist managers in planning transportation, completing paperwork or data entry related to transportation, and taking accurate measurements related to transportation.

The managers who need transportation management systems normally are responsible for orchestrating several projects at once. A system can allow a manager to analyze important dates and costs related to each project. This information can enable a manager to prioritize transportation processes. Software can also assist a manager in deploying labor and developing the most cost effective routes.

It also is common for a transportation management system to assist in administrative duties. For example, a program might have the capability to record and store invoices and bills of materials. Times drivers leave and arrive at locations can also be recorded by a transportation management system. Notifications regarding bad weather and closed roads can be sent to drivers through some management systems.

One of the most useful benefits of a transportation management system is that it allows managers to track and record measurements related to transportation, often in real time. A manager has the ability to track how long it takes certain drivers to complete routes. Weights and capacities of vehicles are notated and recorded by managers. This software can also generate calculations for cost per unit of distance or weight.

While basic management systems are designed for managers responsible for tracking road and air transportation, some systems serve more specific purposes. For example, a manager who is more concerned with international transportation can benefit from a program that is able to work with multiple currencies. Likewise, an organization that specializes in leasing vehicles to clients can benefit from systems that make calculations based on weight, time, and distance.

Larger businesses with complex transportation management needs often purchase management software that managers can install in individual computers and networks. Smaller businesses may prefer software on demand that can be accessed on the Internet. This kind of software normally requires users to pay usage fees. Some open source software can be download for free or for minimal prices.

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Discussion Comments

By irontoenail — On Jul 24, 2011

@KoiwiGal - To be honest I find the idea of a GPS tracking my every move on the job kind of creepy. I don't even like them being on my phone, because you know they are giving that information to all kinds of businesses.

On the other hand, my local bus route finally installed a GPS tracking system with a sign at the stop saying how far away each bus is. It's so much better than it used to be.

So, I guess I can see how it could make a business more efficient, but I still wouldn't like it myself.

By bythewell — On Jul 23, 2011

@KoiwiGal - In my experience truck drivers are pretty diligent about keeping good records. Many of them find it to be a matter of pride to try and get from A to B as fast as possible.

And on top of that, they sometimes ride in convoys as well.

Still, people can be fallible so I'm sure the GPS systems come in handy. I think there are even transportation management systems software that receive the information directly from the GPS which makes it all a lot simpler.

By KoiwiGal — On Jul 23, 2011

People who compile this kind of data must be in seventh heaven since GPS systems became so cheap and easily available. I would imagine back in the day it was much harder to ensure that you were getting the right figures. You could get the distance from the cab, but the time might be easier to fudge on the records.

After all, people tend to exaggerate, particularly when it means they get an extra 20 minutes for lunch or whatever.

Now there's no way of doing that.

Or maybe not. I guess they could turn off the GPS and claim there was a really long tunnel!

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