TMS

What is a TMS?

A TMS (Transport Management System) is software that shippers, logistics service providers and carriers use to plan freight transport, assign it to carriers, execute, track, settle and analyse it. It is used for both inbound and outbound logistics, from the factory gate to the end customer. Together with the WMS, the TMS forms the execution layer of supply chain management: the ERP decides what needs to be delivered, the WMS prepares the goods and the TMS arranges how, when and with whom they travel.

TMS = control over transport costs, routes, carriers and delivery reliability.

🧠 What does a TMS do?

With a TMS you can:

• Plan and assign transport to carriers, based on rates, capacity and service levels
• Consolidate shipments and build loads - combine orders into trips and maximise the fill rate of trailers or containers
• Optimise routes based on cost, distance, delivery windows, driving times and load
• Generate shipping labels and documents, including SSCC labels, tracking codes and consignment notes
• Send EDI messages such as IFTMIN (transport instruction) and receive messages such as IFTSTA (status report)
• Integrate Tracking and Tracing with carriers, so you can see the status of every shipment
• Audit and settle freight costs by automatically matching carrier invoices against the agreed rate
• Analyse transport costs, performance and emissions

🧱 What are the key features of a TMS?

🔄 How does a TMS differ from a WMS, ERP and MES?

A TMS is often confused with other business systems. The difference lies in the focus: a TMS looks at goods on the move, while the other systems look at orders, stock or production.

In practice, TMS functionality is sometimes part of an ERP module or a WMS extension. A standalone TMS becomes worthwhile once you work with many carriers, transport modes or countries.

🔗 How does a TMS integrate with other systems?

A TMS rarely stands alone. Its value lies in the integrations:

The SSCC (Serial Shipping Container Code) is a unique 18-digit number that identifies each pallet or carton. It is printed as a barcode on the GS1-128 label and sometimes stored in an RFID tag, so every link in the chain recognises the same shipment. Alongside EDI, modern TMS platforms increasingly use REST APIs and real-time status updates from carriers.

🚚 How does a transport order flow through a TMS?

1. The order arrives from the ERP or WMS, with address, weight, volume and requested delivery date.
2. Planning and consolidation - the TMS combines orders into shipments and trips and chooses the mode (full truckload, groupage, parcel, sea or rail).
3. Carrier selection - the TMS selects the best carrier on rate and performance and sends an IFTMIN or API booking.
4. Documents - SSCC labels, the CMR consignment note and any customs or ADR documents are generated.
5. Execution and monitoring - the shipment is loaded and dispatched; status messages (IFTSTA, GPS) show progress live.
6. Delivery - delivery is confirmed with a (digital) proof of delivery.
7. Settlement - the carrier invoice is checked automatically and costs are allocated to the order or customer.

📋 Which rules and standards apply in the Netherlands and the EU?

A TMS has to fit the legal and administrative side of freight transport:

• CMR Convention (1956) - governs international road haulage and the CMR consignment note; a consignment note is also common in Dutch domestic transport.
• e-CMR - the Additional Protocol to the CMR Convention (Geneva, 20 February 2008) makes an electronic consignment note legally possible. The Netherlands approved the protocol, and in 2017 the Benelux countries agreed on a joint pilot with the electronic consignment note.
• eFTI Regulation (EU) 2020/1056 - from 9 July 2027, authorities in every Member State must accept freight information shared electronically through certified eFTI platforms, for road, rail, inland waterway and air freight. For businesses, sharing digitally remains a choice, but TMS vendors are already building connectors for it.
• ISO 14083:2023 - the international standard (March 2023) for quantifying and reporting greenhouse gas emissions from transport chains. Smart Freight Centre’s GLEC Framework is aligned with it. More and more customers ask shippers for CO2 figures per shipment, and the TMS holds the distances, weights and modes needed to calculate them.

🔐 How do you secure a TMS?

A TMS is business-critical: if it goes down, trucks stop leaving with the right loads. That makes it an attractive target for ransomware.

• SaaS concentration risk - in November 2024 the Termite ransomware group hit the hosted environment of supply chain software vendor Blue Yonder. Customers such as Starbucks, Morrisons and Sainsbury’s suffered disruption to staff scheduling and warehouse systems. A single vendor can affect many supply chains at once.
• Logistics as a target - the NotPetya attack in 2017 brought the systems of shipping line Maersk to a halt worldwide, including container terminals in Rotterdam.
• Supply chain risk - assess TMS and EDI vendors through third-party risk management and include supply chain risk in your risk assessment.
• Access - carriers, customers and planners log in through portals; use MFA and restrict rights per role.
• Secure integrations - use encrypted channels such as SFTP or AS2 for EDI and secured APIs with tokens instead of shared passwords.
• Continuity - set out in a business continuity plan how you will replan manually and print labels during an outage.

The Dutch Cybersecurity Act, which implements NIS2, covers transport sectors including aviation, rail and shipping, while for road transport it only covers road authorities and operators of intelligent transport systems. Postal and courier services are also in scope. Ordinary road hauliers are usually not in scope themselves, but their customers in critical sectors increasingly impose security requirements on their logistics partners.

📊 Which KPIs do you measure with a TMS?

🧭 How do you select and implement a TMS?

1. Map your transport flows - shipment volumes, modes, countries, carriers and current costs.
2. Choose the type - an ERP module, a standalone TMS (often SaaS) or the TMS of your logistics service provider.
3. Design the integrations - ERP, WMS, EDI messages, carrier APIs and GS1 labels; test with real shipments.
4. Bring the carriers along - not every carrier supports EDI or APIs; a web portal is often the interim solution.
5. Get the master data right - rates, delivery windows, addresses and load carriers determine the quality of the plan.
6. Arrange security and continuity - contractual requirements for the vendor, MFA, backups and a fallback procedure.
7. Measure and improve - start with a few KPIs and expand to CO2 reporting and automated tendering.

✅ What are the benefits of a TMS?

• Lower transport costs through optimisation, consolidation and carrier comparison
• Better grip on deliveries via real-time monitoring
• Automation of documentation and communication with carriers and customers
• Better insight into carrier performance, cost and emissions
• Faster processing of orders and shipments, with less manual work

❓ Frequently asked questions

What does TMS stand for?

TMS stands for Transport Management System. A TMS is software that companies use to plan freight transport, assign it to carriers, track it and settle the costs. It is used by shippers, logistics service providers and carriers.

What is the difference between a TMS and a WMS?

A WMS manages what happens inside the warehouse: storage locations, stock and order picking. A TMS handles the transport that follows, such as carrier selection, trip planning and track and trace. The two systems are closely linked, because the TMS needs parcels and weights from the WMS.

Which EDI messages does a TMS use?

A TMS often uses EDIFACT messages such as IFTMIN for the transport instruction, IFTMBF for a booking request and IFTSTA for status updates from the carrier. DESADV tells the consignee which goods are on their way. More and more carriers also offer REST APIs.

Does a small company need a TMS?

A small company with a few regular carriers often manages with the shipping module of its ERP or webshop system. A standalone TMS pays off with high shipment volumes, multiple carriers, international flows or demanding track-and-trace and CO2 reporting requirements. SaaS TMS solutions have lowered the entry barrier, however.

What does the eFTI Regulation change for a TMS?

The eFTI Regulation (EU) 2020/1056 requires authorities in the EU to accept, from 9 July 2027, freight information shared digitally through certified eFTI platforms. A TMS that already holds the freight data digitally can make it available through such a platform during inspections. This reduces the need for paper freight documents.

How does a TMS calculate transport emissions?

A TMS combines the distance, weight, mode and vehicle type of each shipment with emission factors. The international standard ISO 14083:2023 and the GLEC Framework aligned with it describe how to calculate and report those emissions. This gives you CO2e per shipment or per tonne-kilometre.

📌 In summary

A TMS is the software that plans, assigns, tracks and settles freight transport, forming the bridge between ERP, warehouse, carrier and customer. With integrations via EDI, APIs and GS1 standards, attention to eFTI and ISO 14083, and solid protection against ransomware and supply chain risk, a TMS delivers lower costs, better delivery reliability and insight into emissions.