The Impact of Transport Management Systems on Cost Savings and Profitability
Effective and efficient transport management is crucial for achieving cost savings and increasing profitability. With technologies such as Transport Management Systems (TMS) hauliers can optimise a lot of their transport operations, reduce costs, and improve overall profitability. In this article, we will delve into the significant impact of TMS on cost savings and profitability, exploring the key benefits and real-life examples.
What is a Transport Management System?
A Transport Management System (TMS) is a software solution that helps hauliers organise and manage their transport tasks more efficiently. It assists in job creation and allocation, planning efficient routes, tracking vehicles, and providing real-time updates on job progressions and locations. This helps transport businesses save money, work more smoothly, and give customers better service by keeping them informed, with everything organised and easy to see in one place.
Read more: What is a transport management system?
Cost Savings through TMS
One of the primary advantages of implementing a TMS system is the potential for significant cost savings. TMS system helps plan routes efficiently and consolidate loads, reducing fuel consumption and improving resource utilisation. By identifying the most efficient routes and load combinations, businesses can minimise transport expenses and cut down on unnecessary empty mileage.
“With everything under one umbrella in one system we’ve been able to achieve many things we could never have achieved with our paper-based systems. We’re now running the business far more efficiently and able to minimise the operational costs of the business, all without the need to expand our team.”
Jenny Hill, Jentone Freight
Improved Real-Time Operations
A TMS software is essential for any real-time job amendments should an alteration need to be made, or if any disruptions occur. Through the TMS, maintaining constant communication with the drivers allows planners to react as soon as they can with any amendments, and send them to the driver immediately. Not only does this save time from planners calling drivers up, but it also makes sure that deliveries are completed on time, with minimal disruption to upcoming jobs.
“Mandata TMS gives an accurate real time picture of all planned routes including empty legs between loads enabling us to identify and address any vehicles carrying empty trailers over excessive miles. This facility is leading to definite benefits in improved load allocation, operational efficiency as well as helping meet an increasing growth in demand for our services.”
Dave Lindop, Finance Director, AW Jenkinson Transport
Increased invoicing speed and accuracy
TMS invoicing tools can remove the need to duplicate job data on an invoice, saving finance staff considerable time spent on support and administrative tasks. The TMS can also batch-send invoices via email, freeing up time for admin staff and saving on postage costs. Linking up to accountancy software such as Sage, Quickbooks and Xero, a lot of this invoicing process is automated from the system, reducing admin error and helping you to get your invoices out a lot quicker.
“We can’t invoice until a job is complete and we can’t invoice until a job has a clear POD on it. Before, if a driver was out for four nights, we’d have to wait until all the paperwork was back, then match and scan all the paperwork. It would take three to four days to get invoices out after a job was completed. Now with ePODs, we can invoice straight away, and this has increased cashflow by four or five days….easy.”
Ross Edden, Managing Director, TWE Haulage
IT and hardware cost savings
With the right cloud transport management software and support in place, hauliers don’t have to deal with the headache and expense of buying and maintaining hardware, so they can focus on running their businesses.
Minimised lost proof of delivery documents
Electronic proof of delivery (ePOD) not only ensures that lost paper PODs are a thing of the past, but it also allows for faster invoicing and shorter payment cycles while reducing the cost of buying stocks of paper. Plus, it increases the accuracy of details recorded, reduces disputes, and ultimately protects revenue.
Enhanced Customer Service and Profitability
TMS contributes to improved customer service by optimising delivery times and providing accurate order tracking. Through real-time visibility, businesses can monitor deliveries, provide accurate arrival estimates, and proactively communicate with customers. This enhanced customer experience leads to higher customer retention rates and increased profitability.
Transport Management Systems have become indispensable tools for hauliers seeking to optimise their transport operations. Through route planning, load consolidation, driver allocation, and real-time tracking, a TMS significantly impacts cost savings and profitability. The benefits of TMS extend beyond reducing transport costs; they provide improved operational efficiency, enhanced customer service, and assist with data-driven decisions. As companies continue to adapt to the ever-evolving business landscape, implementing a TMS is crucial for achieving sustainable growth and staying competitive in today’s market.