Existing customer? Login

What is the difference between a Transport Management System (TMS) and a Freight Management System (FMS)

by Jill Quijano,
Mar 15, 2024
transport management systems vs freight management systems
transport management systems vs freight management systems

Table of Contents

We often talk about supply chain software and its role in improving logistics procedures. Two tools that take the spotlight are Freight Management Software (FMS) and Transport Management Systems (TMS).

While certain functions tend to overlap, they each have a distinct purpose and benefits. In this post, we’ll examine the key features of both FMS and TMS, equipping you with the insights needed to choose the right solution for your business.

Comparing Freight Management Systems vs. Transport Management Systems

Let’s start with what they both do: An FMS and TMS can improve transportation efficiency and profitability. When used together, they help businesses fulfill their transportation and logistics needs.

Freight Management Software

A freight management system (or software) is, as the name implies, focuses on the freight shipping process. It offers a centralised platform for carrier management along with invoicing and reporting features.

Key features of an FMS include:

  • Select and compare rates from multiple carriers, helping you choose the most cost-effective solutions
  • Book and schedule pickups or deliveries
  • Real-time freight tracking features
  • Documentation management; generate shipping documents such as invoices or bills of lading
  • Analytics and reporting to help you identify trends and make data-driven decisions

Who needs an FMS?  

When handling multiple carriers or large freight volumes, an FMS—with its integration capabilities—can significantly streamline operations. Businesses that rely heavily on freight shipping to distribute products (wholesalers, ecommerce businesses) would benefit from an FMS as well.

Transportation Management Software

While an FMS focuses on freight shipping, a TMS covers transportation and logistics. This includes your drivers, fleet, and third-party carriers. Oftentimes, this is where an FMS and TMS overlaps as they both have documentation, carrier management, and route optimisation features.

Key features of a TMS include:

  • Route analysis, planning, and optimisation
  • Load planning, giving you the ability to assess goods distribution and vehicle capacity
  • Analytics capabilities, providing insights into fleet performance
  • Real time tracking of goods and trucks
  • Automated billing and invoicing

Who needs a TMS?

A TMS offers a comprehensive view of transportation, freight management, and analytics. Among the most common end users are shippers, transport managers, and manufacturers.

That said, a TMS is better suited for businesses that deal with the entire supply chain process. It’s also a must-have if you’re managing inbound freight.

FMS or TMS: Why Not Both?

Integrating your FMS and TMS allows businesses to leverage the strengths of each system. Your FMS will excel in managing freight-related tasks, such as carrier management and tracking, while your TMS offers broader features such as load planning and route optimisation.

Larger enterprises with more complex transportation networks benefit greatly when these systems work in tandem.

TransVirtual can help you determine which logistics software has the capabilities to meet your needs. We offer a zero-commitment strategy session where we discuss your biggest logistics challenges and propose the best solutions for them.

Schedule a call at your convenient time today!