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If you work in transport, logistics, or distribution, you’ve probably come across the terms Transport Management System (TMS) and Freight Management System (FMS). Though similar in name, they address different challenges in transport operations, making it important to know which one—or both—your business needs.
But once you understand the difference, the answer becomes much clearer. Let’s walk through what each system does, how it helps your business, and how to decide which one fits your operation best.
What Is a Transport Management System?
A Transport Management System is a software designed to help you plan, manage, and optimise the physical movement of goods. Think of it as the digital backbone of your delivery or transport operation. It’s the system that keeps your fleet, drivers, and jobs running smoothly each day.
A TMS typically covers the full delivery lifecycle, including:
- Driver and vehicle dispatch
- Real-time tracking and delivery visibility
- Customer notifications and delivery updates
- KPI reporting and analytics
- Transport cost management
If you run vehicles, manage drivers, or handle large delivery volumes, a TMS is what helps you keep everything organised and on time.
Key benefits of a TMS
Better route efficiency
A TMS helps you build smarter routes, reduce unnecessary kilometres, and make better use of your vehicles.
Real-time visibility
Know where drivers are, what’s been delivered, and whether you’re on schedule — all from one platform.
Better customer service
With live tracking and automated delivery notifications, customers always know the status of their order.
Faster dispatch and fewer manual tasks
Instead of juggling calls, texts, and paperwork, everything gets assigned and managed through your TMS.
Strong reporting
Identify trends, track performance, and make data-driven decisions that improve your bottom line.
Lower operational costs
By removing inefficiencies across routes, drivers, and admin, a TMS helps you save money daily.
Who uses a TMS?
A Transport Management System is commonly used by:
- Transport companies and fleet operators
- 3PLs
- Retailers with their own delivery vehicles
- Wholesalers and distributors
- Logistics teams with complex delivery networks
- Any business that manages drivers, vehicles, and deliveries internally
If you run vehicles, manage drivers, or handle large delivery volumes, a TMS is what helps you keep everything organised and on time.
What Is a Freight Management System?
A Freight Management System, on the other hand, is designed to help businesses manage their freight bookings and freight workflows, usually with external carriers. It focuses on the administrative and financial aspects of freight movements rather than managing a fleet.
An FMS often includes tools for:
- Booking freight with multiple carriers
- Comparing freight rates
- Generating consignments and shipping labels
- Freight invoice auditing and reconciliation
- Tracking freight movements and exceptions
- Storing freight documentation in one place
If your business relies on outside couriers or transport providers instead of managing your own vehicles, and seeks more control and insight over carrier costs, an FMS is tailored for your needs.
Key benefits of an FMS
Centralised freight booking
Book with multiple carriers from one place. No more switching between portals.
Accurate cost control
Compare freight rates instantly and choose the most cost-effective option.
Less manual data entry
Create consignments faster with automated details and templates.
Fewer billing errors
Freight invoice reconciliation ensures you’re paying the correct amounts.
Better freight visibility
Track freight movements, see bottlenecks, and identify issues earlier.
Reliable reporting
See your freight spend clearly and uncover opportunities to save.
Who uses an FMS?
A Freight Management System is commonly used by:
- Retailers and eCommerce businesses
- Warehouses shipping daily orders
- Freight brokers
- Importers/exporters
- Manufacturers sending goods via carriers
- Any business relying on couriers or transport providers to move goods
TMS vs. FMS: A Quick Comparison
| Focus | Transport Management System | Freight Management System |
|---|---|---|
| Main function | Manage and optimise transport operations | Manage freight bookings and workflows |
| Best for | Fleet operators, 3PLs, delivery businesses | Businesses shipping via third-party carriers |
| Key features | Routing, dispatch, driver management, tracking, PODs | Carrier booking, rate comparison, consignment creation, invoicing |
| Ideal use case | You manage drivers and vehicles | You rely on carriers to move freight |
Why Our Clients Trust Our Logistics Solutions
"Transvirtual helps us by providing a platform with real-time data and information that we can pass on to our customers and exceed their expectations. I would absolutely recommend Transvirtual to every other freight company because of their customer support. Their platform is user-friendly and they offer a complete end-to-end solution."
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Frequently Asked Questions
- What is the main difference between a TMS and an FMS?
A TMS is designed to manage and optimise transport operations, especially when you run your own fleet. An FMS helps you manage freight bookings and carrier relationships when shipping through external couriers or transport providers.
- Can a business use both a TMS and an FMS?
Absolutely. Many high-volume shippers use both systems: a TMS for internal fleet operations and an FMS to manage freight handled by external carriers. This is common for 3PLs, retailers, and large distributors.
- Which system is better for reducing transport costs?
Both can help, but in different ways:
A TMS helps reduce costs by optimising routes, increasing efficiency, and improving fleet performance.
An FMS helps reduce freight spend by comparing carrier rates, managing invoices, and reducing billing errors.
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