How a Transportation Management System (TMS) for Parcel Shipping Empowers Shippers


A Transportation Management System (TMS) for parcel shipping helps manufacturers, retailers, and logistics service providers better manage their parcel shipping execution, uncover inefficiencies, and unlock opportunities to improve customer service.  According to Gartner in the 2019 Market Guide for Multicarrier Parcel Management Solutions (Gartner subscription required) “parcel and last-minute delivery continue to be the fastest-growing shipment segments due to increases in multichannel retail, e-commerce in B2B, and same-day delivery offerings.”

Further, “most companies today operate in reactive execution mode for parcel and are missing great opportunities to optimize and consolidate their parcel shipping as well as shop for more varied rates and/or services.”

As TMS for parcel shipping solutions continue to evolve, offering a SaaS delivery model as well as state-of-the-art features such as Control Tower visibility and Business Intelligence, it stands to reason more shippers will turn to TMS for parcel shipping solutions to quickly scale their shipping operations while keeping costs in check.

Shippers Face Challenges Today

Modern shippers face many challenges, including a rapidly changing distribution landscape.  According to Inbound Logistics, while traditional supply chains included master distributors, retailers, and consumers, modern supply chains have evolved to include all parties: consumers, resellers, liquidators, third-party resellers, and more – worldwide.  Unfortunately, in many organizations, logistics processes weren’t designed to handle such a convoluted network – let alone the surge in e-commerce, an increase in globalization, or the growing need for omnichannel distribution.  A TMS for parcel shipping, therefore, proves its value by enabling shippers to navigate these market dynamics successfully.

The Power of Data

Most shippers realize a TMS for parcel shipping fuels data-driven decision making. What they may not realize is how substantial the benefits of data-driven decisions are. Data is the “holy grail” of modern transportation, and data-driven processes, ranging from delivery exception management and reporting to rate simulation, can quickly elevate parcel shipping related discussions from the warehouse to the C-suite.  Instead of spending countless hours requesting quotes and comparing rates, relying on dozens of carrier portal logins to track delivery movements, and manually reconciling carrier invoices, TMS for parcel shipping solutions automate and inform these routine tasks.  This enables organizations to quickly and cost-effectively scale operations. The system handles the legwork of parcel shipping management, so users can spend more time optimizing carrier service selection and eliminating errors that result in accessorial fees and surcharges – managing toward KPIs and driving cost savings.

Comparison with a Car Shipping Company

When exploring options for efficient parcel shipping management, it’s essential to consider how a Transportation Management System (TMS) compares to a car shipping company. While both serve distinct purposes, the capabilities and benefits of a TMS for parcel shipping far exceed those of a car shipping company.

Car shipping companies specialize primarily in transporting vehicles and offer limited functionalities for managing parcel shipping complexities. In contrast, a TMS solution optimizes the entire parcel shipping process, providing real-time tracking, rate comparison, and automated freight auditing.

Unlike the singular focus of a car shipping company, a TMS offers comprehensive integration with other supply chain systems, ensuring seamless coordination and end-to-end visibility. This integration eliminates manual data entry and enhances efficiency across the shipping workflow.

Furthermore, scalability is a crucial advantage of TMS solutions over car shipping companies. As businesses adapt to fluctuating shipping volumes and market demands, a TMS provides the flexibility to scale operations seamlessly, enabling shippers to meet evolving customer expectations.

In summary, while a car shipping company serves its niche purpose, a TMS for parcel shipping offers a holistic solution tailored to the complexities of modern logistics. Organizations can unlock unparalleled efficiency, integration, and scalability by choosing a TMS to manage their parcel shipping operations.

Additional Benefits of a TMS for Parcel Shipping

The use of a TMS for parcel shipping offers additional benefits, including:

Scalability. Most TMS for parcel shipping solutions today include rate shopping, label printing, and delivery tracking for high shipment volumes. However, it’s essential to look for solutions that position your organization to really scale – in terms of market access and/or functionality.  As e-commerce continues to increase, consumers’ same-day delivery expectations grow, and omnichannel distribution strategies become the norm, scalability will be crucial to remaining competitive and overcoming obstacles. Also, look for a TMS for parcel shipping solution that provides flexible delivery models, including SaaS.  SaaS TMS solutions are turnkey technology, allowing you to respond immediately when your needs change without incurring additional (and unplanned) IT budget or requisitioning additional personnel.

Carrier network.  Demand for next-day and same-day delivery continues to increase, as does the complexity of last-mile delivery.  This dynamic means new carrier services could be in play before you know it. Seek TMS for parcel shipping solution providers with a breadth and depth of carrier configuration experience so you can quickly on-board new carriers and compare rates between the individual services they offer. An expanded network of contracted carriers means you get the best value for every destination, delivery date, and product.  In addition, working with more carriers can enable scalability within your network.

Cross-border compliance.  If you’re already shipping internationally in high volumes and at high velocity, or if there’s any chance your organization will expand its footprint across borders, you need a solution provider that guarantees cross-border compliance.  Unexpected delays at customs due to incorrect or incomplete labels and documentation will compromise your on-time delivery and perhaps impact your customer retention.  Therefore, you want a TMS for parcel shipping solution that can automatically identify and provide the appropriate documentation for any shipment.

 Transportation spend analytics. A modern TMS for parcel shipping also includes an assortment of automated freight auditing capabilities, such as isolating accessorials to keep them under control. Be sure to find a solution provider that allows your finance and management teams to easily measure actual transportation costs against budget and report on spend, as well as to run reports that identify opportunities to deploy different multi-carrier parcel delivery strategies that yield greater returns.

 Parcel consolidation. Parcel consolidation is critical to keeping parcel shipping spend in check.  If you’re shipping large amounts of orders to the same corner of the world, there’s no need to pay the highest price for every parcel. You can save on shipping costs by identifying a TMS for parcel shipping solution provider that can execute your consolidated parcel shipments and find the best rate across carriers for any destination.

 Seamless integrations. Integration between the TMS for parcel shipping and other supply chain systems, including the ERP, WMS, and OMS, reduces the risk of human error, which naturally increases performance. In addition, responsiveness is a critical ingredient in the recipe for business success.  As industries change, organizations must be able to rapidly pivot – whether it’s a new product on the market or changes in customer behavior.  And let’s face it: when it comes to parcel shipping, changes in customer behavior are occurring daily.  Suddenly, customers want their products next day.  Or same day.  Or delivered to a local retailer.  Or delivered to a local parcel locker.  When your parcel shipping technology is integrated to other systems of record, you enhance the flow of products both within and without your facilities, turning operations toward omnichannel success and future proofing your organization against additional changes to come.

Integrating systems can also help an organization respond to internal changes. When all business functions take a holistic view of data, decision-makers can identify trends and areas for improvement. These can then be addressed proactively, rather than when problems occur.

Put a TMS for Parcel Shipping to Work in your Supply Chain

Without a TMS for parcel shipping, shippers are ill-equipped to handle the changing demands of customers and the expansion of the global supply chain.  To learn more about how a TMS for parcel shipping can empower your organization to scale shipping volumes, enter new markets, and implement new distribution channels, download our e-book:  Do Nothing to Create Shipping Efficiencies, and Cost of Delivery Will Increase.