TMS (Transportation Management System) is specialized software for planning, executing and optimizing the shipment of goods. Users perform three main tasks on a TMS: 1) find and compare the rates (prices) and services of carriers available to ship a customer's order, 2) book the shipment, then - 3) track its movement to delivery. The broader goals of using a TMS are to improve shipping efficiency, reduce costs, gain real-time supply chain visibility and ensure customer satisfaction.

TMSes are one of the core technologies used in supply chain management (SCM), a discipline sometimes divided into supply chain execution (SCE) and supply chain planning (SCP). They are available as stand-alone software or as modules within enterprise resource planning (ERP) and SCM suites. Typically, a transportation management solutions serves both shippers, carriers and other logistics providers. Manufacturers, distributors, e-commerce organizations, wholesalers, retailers and third-party logistics providers (3PLs) are major users of TMS software.

While some TMS, transport management solutions, focus on a single mode of transportation, most support multimodal (where at least two of the various modes of transportation -- truck, rail, air and sea -- are used in a single contract) and intermodal (in which a cargo container is carried by at least two modes of transportation).

Like most enterprise software systems, TMSes started as on-premises systems but have increasingly been deployed in the cloud either hosted or as SaaS. There are also TMS managed services. Cloud transportation management system has obvious advantages in easing connectivity between TMS users, carriers, customers and supply chain partners. Some TMS vendors try to differentiate themselves by offering single-instance multi-tenant SaaS, which they say has cost and integration advantages over single-tenant SaaS and private-cloud options.

In fact, according to Gartner, most of the growth in the TMS market comes from cloud offerings that companies bought to replace on-premises TMS, a trend that is likely to persist. Meanwhile, TMS vendors continue to migrate their products to SaaS, in large part to fend off competition from fast-growing "cloud native" vendors who started with SaaS transportation management system.

Vendors of TMS software fall into four categories: ERP suites, SCM suites, niche TMS and TMS services. Microsoft, Oracle and SAP are prominent TMS ERP system vendors. Most other ERP vendors rely on TMS vendors with which they have integration. Smaller ERP vendors also have distribution modules that handle some TMS tasks but aren't true TMSes.