How to Enhance a TMS Transportation System with AI Without Reinventing the Wheel

The logistics industry is experiencing unprecedented change, forcing companies to rethink their operations in pursuit of greater flexibility, predictability, efficiency and resilience. Technology is undoubtedly the key; yet, a recent McKinsey report described that while the implementation of advanced TMS transportation management systems is accelerating, change management remains a significant barrier to adoption.

The technology landscape has become increasingly intricate for logistics service providers (LSPs). Companies must grapple with questions about the value they expect from technology, its integration into their existing systems and processes, and its impact on their daily operations. However, AI adoption needn’t be complex. In fact, leading-edge developers are creating solutions that address this critical pain point. 

In the following sections, we will explore AI's transformative power in TMS transportation management systems and how Ontruck AI Tech offers straightforward solutions for AI integration.

What is a Transportation Management System (TMS)?

A transportation management system is a software platform designed to streamline and optimise the complex process of moving goods. It acts as a central hub for planning, executing and analysing all aspects of transportation logistics. A TMS transportation system centralises order management, automates workflows and integrates with e-commerce platforms. It also maintains a database of carriers and contracts and optimises carrier selection based on cost, performance and capacity. 

Additionally, it provides visibility into shipment status, location and estimated arrival time. This data is then leveraged to streamline freight audit and payment processes, verify invoices and resolve discrepancies. Finally, a TMS can generate reports on key performance indicators for transport and logistics, such as on-time delivery, cost per shipment and carrier performance, enabling data-driven decision-making.

From basic tools to advanced solutions with AI and machine learning

TMS (transportation management systems are widely) used across the logistics industry. Indeed, companies that have yet to adopt them risk losing their competitive edge. The next wave of productivity gains is already on the horizon, likely coming from cutting-edge solutions like AI and real-time analytics.

In the same report, McKinsey observes that the adoption rate of advanced TMS transportation management systems is increasing exponentially due to their remarkable value. AI is reshaping TMS transportation management systems, unlocking new levels of efficiency and cost-effectiveness for businesses. It is particularly evident in the following areas:

1. Dynamic pricing that drives competitiveness

The influence of AI on TMS is most notable in its ability to streamline and enhance pricing strategies. Sophisticated algorithms can analyse vast amounts of data so shippers can set dynamic rates that respond in real-time to market conditions. With these tools, they can leave behind limited cost-plus pricing strategies, ensuring companies remain competitive and maximise profitability.

2. Intelligent costing for optimal fleet management

On the carrier side, AI-powered tools streamline cost management and freight procurement, offering real-time visibility into pricing trends and enabling data-driven negotiations. Load and capacity planning is also transformed, with optimal fleet management minimising empty miles and reducing waste. 

AI also takes route optimisation to the next level by analysing a multitude of variables, including real-time traffic, weather patterns, and fuel costs. This results in the most efficient routes, ensuring faster deliveries, reduced fuel consumption, lower emissions and, most crucially, more satisfied customers.

3. Greater visibility and faster interventions

Moreover, AI-powered visibility provides a comprehensive, real-time view of the entire supply chain, enabling proactive identification of potential disruptions. This early warning system allows for swift intervention and minimises the impact of unforeseen events, ensuring smoother operations and improved customer experience.

How AI enhances TMS capabilities

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By embracing AI in TMS, businesses can achieve a more agile, responsive and intelligent logistics network. This comprehensive approach not only streamlines operations and reduces costs but also enables companies to make data-driven decisions, ultimately driving growth and success in today's competitive landscape.

But, while AI's transformative potential is clear, successfully implementing these technologies requires careful planning and change management. Companies must be prepared to adapt their processes and train employees to fully integrate AI solutions into their existing systems.

The challenges of integration and change management

Implementing AI tools and adapting to new ways of working can be a complex undertaking. Although the McKinsey report acknowledges that the most significant barrier to adoption remains the cost—with 80% of shippers reporting it as their primary concern—change management and training come in a solid second and third.

Indeed, these anxieties aren’t unfounded. Introducing new technology can disrupt established workflows and require employees to learn new skills. Effective change management strategies, including clear communication, training programs and stakeholder engagement, are essential for a smooth transition. 

Involving employees in the process from the outset is crucial; their feedback can help identify potential challenges and tailor training programmes to meet their specific needs. By fostering a sense of ownership and collaboration, companies can increase the likelihood of successful AI adoption and maximise the return on their technology investment.

Comprehensive training programs and ongoing support can help employees fully embrace the technology and maximise its benefits. However, some solutions can streamline the path to adoption by integrating into established workflows, namely, a well-designed API.

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Why wait for your TMS provider? Implement AI capabilities now

Ontruck AI Tech develops a suite of AI-powered products designed to optimise various aspects of TMS transportation management. Recognising that many TMS software providers are slow to develop and integrate sophisticated AI capabilities, we've designed our modules to seamlessly and securely integrate with your existing TMS system. This means you don't have to wait for your provider to catch up; you can start benefiting from advanced AI features straight away. 

We leverage our hands-on experience in the logistics industry to develop these products with the customer in mind. We also acknowledge that change management and training are vital concerns, which is why integrating Ontruck AI Tech’s modules is a straightforward process, allowing you to quickly harness the power of AI for your transportation operations.

1. TMS connection through APIs (Application Programming Interfaces)

This is the most efficient method for integrating Ontruck into your system. APIs act as messengers between software applications, allowing them to communicate and share data seamlessly. In the context of TMS integration, an API enables Ontruck's modules to exchange information with your existing TMS in real time, such as order details, shipment status and tracking information. 

There are two ways to integrate an API into your workflow. The first is integrating Ontruck’s API into your systems. This offers a fast, easy and secure connection. This highly adaptable solution provides an intuitive user interface where every call contains a definition of the problem that needs to be solved, whether it be routing definition, vehicle availability, or order assignment.

The second option is that we integrate into your existing systems with pre-built connectors. Ontruck's solutions streamline the integration process, eliminating the need for complex custom integrations and saving valuable time and resources. With pre-built connectors for popular logistics software like Shippeo and Blume, the integration process is accelerated, ensuring a swift and efficient connection. To facilitate rapid onboarding and seamless execution of new integrations, we also provides comprehensive documentation and developer resources.

2. Easy-to-use front-end solutions 

Ontruck AI Tech can create front-ends that add extra functionality on top of the baseline product. Our developers work closely with ops teams to understand their daily tasks and challenges to develop easy-to-use custom front ends that directly address their pain points. These solutions streamline the process of accessing real-time data, shipment statuses, and tracking with intuitive ease. In either integration paradigm, Ontruck's AI-powered capabilities are seamlessly integrated into your operations, unlocking new levels of efficiency and economy.

Secure the strategic advantage

In the face of unprecedented change, the logistics industry is turning to technology to navigate a path toward greater flexibility, predictability, efficiency and resilience. However, logistics companies must carefully consider each solution's value proposition, integration requirements and operational impact.

Ontruck AI Tech recognises these challenges and has developed a suite of AI-powered products to optimise various aspects of TMS transportation management systems. Our commitment to customer-centric design is evident in the consideration of change management and training, which ensures a smooth transition and maximises the benefits of AI adoption.

Whether through our intuitive API-driven integrations or our user-friendly front-end interface, Ontruck AI Tech enables businesses to harness the power of AI without the need for complex overhauls. Our solutions are designed to seamlessly integrate with your existing TMS transportation system, enhancing its capabilities and unlocking new levels of efficiency and cost savings.

Take the opportunity to transform your logistics management. Book a free demo today and unlock the future of transportation with Ontruck AI Tech.

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References:‍

McKinsey & Company (2023, November). Digital logistics: Technology race gathers momentum - McKinsey & Company. https://mckinsey.com/capabilities/operations/our-insights/digital-logistics-technology-race-gathers-momentum