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InfoSun
Supply chain technology 3 min read

What Is a Transportation Management System (TMS)?

Also known as: TMS

Definition

A transportation management system (TMS) is software that plans, executes, and optimizes the movement of freight: rating, routing, carrier selection, tendering, tracking, and freight settlement. It lowers transportation cost and improves service by choosing the right mode, lane, and carrier.

Key takeaways

  • A TMS runs freight planning, execution, and settlement.
  • It optimizes mode, lane, and carrier selection against cost and service.
  • It works best integrated with the WMS and ERP.
  • Underused configuration, not the software, usually limits results.

How does a TMS work?

A TMS takes orders that need to ship and plans the moves: it rates options across carriers and modes, builds routes and loads, tenders shipments to carriers, and tracks them to delivery. After the move, it audits and settles the freight invoice against the contracted rate. The result is lower cost per shipment and better on-time performance.

The TMS meets the WMS at shipping, the warehouse builds and loads what the TMS has planned, and meets the ERP for orders and settlement. As with a WMS, much of the value lives in configuration: rating rules, routing logic, carrier scorecards. InfoSun implements, configures, and operates TMS platforms on the systems already in place.

Why a TMS matters

  • Lower freight cost through better mode, lane, and carrier choices.
  • Higher on-time performance and visibility to delivery.
  • Clean freight settlement and cost data by lane and carrier.
  • A foundation for control-tower visibility across transportation.

A TMS in a 3PL and logistics operation

A 3PL running a TMS tunes its rating and routing rules to current lane costs and adds carrier scorecards, so tendering favors the carriers that actually hit windows. Freight cost per shipment falls and OTIF rises, without replacing the platform, and the settlement data flows into lane-level cost-to-serve analytics.

Frequently asked questions

What is the difference between a WMS and a TMS?+

A WMS runs operations inside the warehouse: receiving, storage, picking, and shipping. A TMS runs transportation between facilities and to customers: rating, routing, carrier selection, and freight settlement. They integrate at the shipping step, where the warehouse loads what the TMS has planned.

Do we need a new TMS to cut freight cost?+

Usually not. Most freight savings come from better use of the TMS you have: current rating rules, smarter routing and consolidation, carrier scorecards, and disciplined freight audit. Optimizing the existing platform delivers results without migration risk.

Written and reviewed by the InfoSun operations team. Last updated July 13, 2026.

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