Transportation Management System Development: A Detailed Analysis

In a period of five years, the focus of the supply chain has gradually shifted to making transportation – both inbound and outbound – a streamlined, efficient process. As a response, several transportation management software development solutions have entered the market with the intent of smoothening transport operations and offering network optimizations.

Every logistics company comes with its own set of operational specifications that more often than not remain unmet by the existing transportation management system solutions. Recently, we were having a conversation with a logistics company owner who was facing issues around real-time tracking of long-distance cargoes, especially amidst geopolitical tension-led road blockages. He mentioned that there are on-demand transportation management systems in place but even then there’s something lacking in every solution he has tried.

Following this call, we performed internal research on why, even in the lack of functionalities, businesses use third-party TMS. What we found was that they quoted cost as the primary reason. Now, irrespective of what the transportation management system development cost you today when you compare it to a 5-year usage chart, the findings will look something like this.

As you can see, custom transportation management system development costs substantially less in the long-term view when compared to a third-party solution. Moreover, you can also license your software to other logistics companies and get a return on development investment. Thus, transportation management software development offers three core benefits –

• Long-term cost-saving
• Business-specific features
• An additional source of income.

Key Features to Include When Undertaking Transportation Management Software Development

Typically, when you create a transportation management system to enhance your supply chains, you work with three subcategories of features.

1. Planning
2. Execution
3. Administrative

Let us look at them separately.

Transport Planning

One of the first features to be considered in the transportation management system development process is creating the transport request with shipment details and quotes to be shared with the carriers who will plan cargo distribution.

1. Order management

In a web-based transportation management system, the order information gets accessed by every stakeholder – from planners to customers and drivers. To streamline the process, the software should develop solutions around making order entries with commodity details, location, and destination. Additionally, there should be a way to have a high-level view of the order for drivers to see their workload.

1. Tendering

The functionality provides your carriers with shipment details to place a bid on the contract and manage the tender-specific paperwork. You can also build an automated solution enabling you to access the vendor depending on your parameters or even select them automatically.

1. Shipment rate management

The objective of the shipment rate engine when you build a transportation management system is to automatically calculate the parcel, truckload, and intermodal shipping rate according to the rules that you have defined: discounts, base rate, and contract agreements. It can also help to create a system where your software sends the quote to the client when they raise a request.

1. Load planning

This feature helps you plan the load space in trailers, trucks, and containers, along with calculating the vacant loading space. To make this feature more visually efficient, we recommend adding a 3D load plan feature within your transportation management system development where the admin can view and modify the cargo distribution and utilization.

1. Route planning

At the planning phase, the web-based transportation management system should inform you about available routes, taxes and tariffs, and possible delays along the supply chain. At this stage, we suggest adding a business intelligence feature to give you insights into road closures or delays due to geopolitical reasons.

1. Document management

To make travel easy, there should be a functionality where logistics companies can generate, store, and share contacts, terms, and other important documents like the bills of lading and tax receipts.

Transportation Execution

With the agreement between carrier and shipper now laid down, it is time for the load to be transported. To streamline the journey, there are some execution-level transportation management system features you should add.

1. Fleet management

When you develop a transportation management system, the possibilities in terms of fleet management will be endless. You can start with having functionality for assigning drivers and vehicles, managing fuel consumption, and tracking vehicle conditions through in-built sensors. On a more advanced stage, you can even control the vehicle remotely.

1. Dock scheduling

Under normal circumstances, shippers schedule dock appointments, and the truck drivers wait for their turn. We recommend allowing the cloud transportation management system to perform dock scheduling and load sequencing in the transport plan. This way, you will better understand the transport and warehouse limitations and create accurate schedules.

1. Real-time tracking

Adding a real-time track facility, possibly through IoT-powered supply chain, in the transportation management system development process helps logistics companies monitor the warehouse facility, shipment status, and vehicle location efficiently. Customers also get a link from which they can track the order status.

1. Multi-stakeholders communication

During transit, the driver might need to connect with multiple stakeholders – customers, the logistics company, vendors, etc. to simplify the coordination, it will be helpful to add an in-app call or chat support in the transportation management software development efforts.

1. Customer version of the software

In every transportation management application development process, there should be a customer version of the application wherein the customers can track the order details, their tracking status and get invoices.

Administrative Features

After the shipment gets delivered, there are activities that the logistics company has to perform. It is important to accommodate them in your transportation management system development efforts.

1. Invoice

After the shipment gets delivered and the full and final payment is made, logistics companies will need to keep invoices and bill receipts for their recordkeeping. The software should provide a provision where the administrators can view, download, and share the invoice of every order.

1. Claims management

When you build a transportation management system, there should be a functionality where documents, proof around in-transit cargo damage, item loss, and vehicle damage can be recorded and then shared with the insurance company for claim processing.

1. Reports management

The transportation management system development process should also account for a report generation mechanism. Typically designed in a dashboard view, this function helps with the automatic generation of operating expenses, key performance metrics, inventory status, and invoices.

Now that we have looked at the features to consider when you develop a transportation management system let us look at another one of the critical transportation management system development cost factors – integrations.

Integrations that Power transportation management application development

When opting for transportation management software development, connecting it with your on-premise software and cloud solutions is important. Additionally, it should establish an integration with multiple software that play a crucial role in the overall logistics space, such as –

• Supply chain management systems
• Enterprise resource planning solutions
• Warehouse management systems
• Accounting software
• Business Intelligence tools
• Logistics service provider marketplace
• Freight marketplace
• Order management platform

Besides the feature sets and integrations, there are two other factors that impact the transportation management application development cost – the system design and team structure

Now, on the design front, there is very little scope for creativity since the platform is fairly data and graphics-intensive. However, you can implement a minimal design structure on the platform to simplify user movements. Additionally, it would help on the learnability curve front to have prompts telling users where to click for which action.

The last cost-impacting factor to consider when you create a transportation management system is the design and development team structure plus location. Typically, transportation management application development costs around $60-80 per hour, while the same would increase to $100-$120 when looking for an agency in the USA or Australia. On the team structure front, you will need a team consisting of –

• Project manager
• Android and iOS developer
• Backend developer
• Web developer
• UI/UX designer
• QA expert

Noting all these factors, the overall cost of transportation management application development can range from anywhere between $300k to $800k, depending on how deep you wish to go regarding features and technology integrations.

Appinventiv recommended considerations for building TMS

Having worked with multiple logistics companies and four transport management systems, we have gathered an understanding that the future of a business in this domain usually lies in building a SaaS solution that other companies can also use. Harnessing our logistics software development services we have transformed the way goods are shipped and transported throughout the world.

Assuming that your aim is also this, here are some elements we recommend you consider in the on-demand transportation management system development journey right from the early stages.

• Deployment type – The on-premise deployment model is deemed best for companies that need tight security and controls. However, when built right, a cloud transportation management system can also offer the same level of security standards and be easy to configure and highly scalable.
• Modular ecosystem – A loosely based architecture would make allocating the system resources and integrating third-party services easy. It will also be a lot more fault-tolerant compared to monolith systems.
• Language support – Since your software will be used by multiple stakeholders – warehouse team, drivers, customers, support team, etc. It would help to have a multi-language support that makes it easy for the users to use your solution on the go.

A transport management system can address the majority of logistical issues – plan shipments, improve efficiency through automation, optimize processes, and establish a collaborative environment between all the logistics stakeholders. What is necessary is to partner with the right development agency that has prior experience in building TMS. We can help.

Frequently Asked Questions

Q. What is a transportation management system?

A. A transport management system, also known as TMS, helps companies manage – plan, execute, and optimize – the logistical system associated with the movement of goods. It carries functionalities that impact the overall logistical ecosystem. Transportation management system development enables logistic companies to better manage, track, and optimize their operations.

Q. What are the key benefits of implementing a TMS?

A. Transportation management system benefits can be seen in –

• Better customer service
• Improved productivity in the warehouse
• Inventory management
• Lowered shipping costs
• Transparency in the supply chain
• Streamlined dock scheduling

Q. How much does it cost to build a  transportation management system?

A. There is no fixed answer to this question. The cost can vary based on feature sets, integrations, and the development team’s location you choose to partner with. Typically, the more complex or tech-heavy the functionalities, the higher would be the development cost since more features will have to be developed from scratch.

THE AUTHOR

Sudeep Srivastava

Co-Founder and Director