No Business is Too Small for the Big Benefits of a TMS

No Business is Too Small for the Big Benefits of a TMS

Is your business missing out on growth opportunities because managing shipments feels like navigating a maze? If you’re still handling logistics manually, you’re not alone—but you might be holding your business back.

Imagine if, instead of wrestling with spreadsheets and endless email chains, you had a streamlined system that turned your shipping process into a well-oiled machine. The truth is, no matter how small your business, a Transportation Management System (TMS) can unlock new levels of efficiency and profitability. Let’s explore how even modest operations can reap big rewards with the right TMS.

What is a Transportation Management System (TMS)?

A Transportation Management System (TMS) is a software solution designed to help businesses efficiently manage their shipment deliveries. While many TMS solutions integrate with larger Enterprise Resource Planning (ERP) systems, their role is distinct and crucial to the logistics process.

The Role of TMS in the Shipping Process

When discussing TMS with customers, we often explain it in the context of how a sales order moves through a business. Typically, an order begins with a salesperson making a sale, followed by production, and finally, the order is ready to ship. This shipping stage is usually where the ERP system’s role ends and where confusion often arises about how a TMS fits in. While an ERP may allow you to enter carrier details and estimate delivery costs, it doesn’t handle the complexities of transportation management. A TMS steps in at this point, working alongside the ERP to manage the shipping process from start to finish. We’ll explore this in more detail later in the article.

Debunking the Myth: TMS is Only for Large Enterprises

There’s a common misconception that TMS solutions are only for large enterprises. Many businesses associate TMS with large, cumbersome software that takes months to implement, costs a fortune, and may never deliver a meaningful return on investment (ROI). However, in today’s world of cloud-based software, TMS solutions are far more accessible, affordable, and user-friendly than the outdated systems of the past, like those old sales CRMs from the early 2000s.

Benefits for All Business Sizes

In this article, we’ll explore how a TMS can benefit businesses of all sizes, including small and medium enterprises (SMEs). We’ll use an example company, Acme Widget Corporation, which ships between 5 and 50 orders per month and works with five different freight brokers and carriers. Without a TMS, their process is entirely manual. We’ll illustrate a before-and-after scenario, showing how adopting a TMS can transform their operations, generate ROI, and even boost profitability.

The Myth of "Too Small"

Many businesses mistakenly believe that a Transportation Management System (TMS) is unnecessary due to its relatively low shipping volume. At Pulse, we often hear, “Our business is pretty small; we only do 10-50 shipments per month.” While this volume might seem manageable without a TMS, the reality is that these shipments require significant manual effort, which fails to add value and offers no return on investment (ROI).

Illustrating the Inefficiencies: A Case Study

Let’s explore a fictitious example to illustrate this. Meet Acme Widget Corporation, a small business that feels it’s too small to benefit from a TMS. We’ll examine their current process to uncover inefficiencies, potential cost overruns, and missed profit opportunities.

The Manual Process: A Day in the Life of Joe

It’s Monday morning, and Joe, the transportation planner, arrives at work with five orders that need to be shipped to different customers. While Joe can use the company’s ERP system to track costs, it doesn’t assist with obtaining transportation quotes, managing carrier selection, or tracking shipments.

Joe begins his day by drafting an email and adding five carriers and brokers to the BCC field. This process takes about 3 minutes per email. After detailing the first shipment, he sends out the request for quotes. Joe optimistically awaits the quotes to start arriving in his inbox.

Time-Consuming and Inefficient

However, this process is highly inefficient. Joe must wait for responses, and when they arrive, he needs to open each email, extract the quotes, and compare them—taking about 5 minutes per shipment.

Here’s how the time adds up:

• 1 Quote Request:
  • 3 minutes to draft and send the email
  • 5 minutes to analyze the responses
  • Total: ~8 minutes per quote request

Assuming everything goes smoothly, Joe spends 8 minutes per request. However since carriers don’t always respond promptly, Joe needs to repeat this process for the remaining four shipments.

• 5 Quote Requests:
  • 15 minutes to draft and send emails
  • 25 minutes to analyze responses
  • Total: 40 minutes

Even with a small number of shipments, the manual effort required to obtain initial transportation quotes is significant. Joe’s process is not only time-consuming but also prone to errors and inefficiencies, leading to increased costs and missed growth opportunities.

Beyond Quoting: Load Tendering and Tracking

Once Joe receives quotes and selects the lowest-priced carriers, he moves to the next phase: Load Tendering and Load Tracking. Joe goes back to his email inbox, searches for carrier quotes, and sends emails to the selected carriers, tendering the shipments and attaching necessary documents like the Bill of Lading (BOL). He repeats this for all five shipments, waiting for carriers to confirm by email, which often involves additional back-and-forth communication about pickup and delivery details.

By lunchtime, Joe had successfully quoted and tendered his five shipments. The next morning, three of the five carriers arrive for pickup, but Joe is left wondering about the other two. He scrambles through his inbox to find the previous day’s emails and sends follow-ups to track down the missing trucks. After waiting 10-30 minutes, he finally receives a response: “The carrier is running late; can we pick this up tomorrow?” Now Joe faces the challenge of deciding whether to re-quote, find a new carrier, or convince internal stakeholders to accept the delay.

The True Cost of Inefficiency

In just two days, Joe’s workflow becomes highly inefficient. Relying solely on email for quoting, tracking, and tendering means constantly reacting to issues rather than proactively managing one of the most critical components of the business. This example highlights the risks and inefficiencies of operating without a TMS, even for small businesses.

Overcoming Budget Concerns

Small and medium-sized enterprises (SMEs) often recognize the inefficiencies in Joe’s process but feel that the budget doesn’t allow for a TMS solution. The thought of investing in a TMS may seem out of reach, especially when every dollar counts. However, the cost of implementing a new-age TMS is often much lower than anticipated, and the ROI can quickly justify the expense.

In the next section, we’ll break down the costs associated with implementing a TMS and demonstrate how it can not only resolve inefficiencies in Joe’s process but also deliver substantial ROI. By understanding the true value of a TMS, your team can transition from merely acknowledging the problem to actively solving it, unlocking new levels of efficiency and profitability.

Cost-Effective Solutions for All Sizes

As we've discussed, managing shipments can be a time-consuming and manual process for businesses of any size. Transportation Management Systems (TMS) offer a solution, but the question is: Can your business afford one? Let's explore the costs.

Subscription-Based vs. Annual Contract Pricing

Subscription-Based Pricing

Most modern TMS platforms, including Pulse, use a subscription-based pricing model. This approach is typically transparent, with pricing details readily available on the provider’s website. For example, Pulse offers a base subscription fee along with a usage-based component, where the main cost is determined by the number of tendered shipments which you can look at on our pricing page here.

Annual Contract Pricing

Alternatively, some TMS platforms require an upfront annual contract payment. This model involves a large one-time payment to access the platform for a year. While this approach can be straightforward, it may present budget constraints for your business due to the significant initial cost.

Both models have their merits, so it’s important to choose the one that best aligns with your financial and operational needs.

Flexibility for Fluctuating Shipping Schedules

Take Acme Widget Corporation, for example. Their shipping volume varies throughout the year, with some months seeing increased activity and others with minimal shipments. Pulse’s pricing structure is designed with this in mind. Our pure usage-based model means you only pay when you’re actively using the platform, allowing costs to scale up or down based on your shipment volume.

Balancing Cost and ROI

No matter which TMS you choose, there will likely be a monthly or yearly fee, possibly based on your annual transportation spend or a subscription model. The key is ensuring that the TMS cost is justified by the ROI it delivers. High upfront or annual costs can make achieving ROI challenging, whereas a lower initial cost that scales with your business offers a more sustainable approach.

Practical Example: Cost Comparison

Let’s return to Acme Widget Corporation, which has decided to explore a TMS to streamline Joe’s process. They’re evaluating two platforms that offer similar features. Here’s a breakdown:

Platform 1: Pulse - Pay-As-You-Tender Model

• Base Plan: $299/month, covering the first 20 shipments.
• Overage: $11.96 per shipment beyond the first 20.

For 45 Shipments/Month:

• First 20 shipments: $299 (or $14.95 per tender).
• Next 25 shipments: $299 (or $11.96 per tender).
• Total Monthly Cost: $598
• Total Annual Cost: $7,176

Platform 2: Large Incumbent TMS - Annual Contract

• Annual Cost: $40,000/year
• For 45 Shipments/Month:
  • Approx. $74 per shipment.

While the incumbent TMS might justify its higher cost with promises of ROI through time savings and efficiency, it’s crucial for your business to realistically achieve that ROI. With Pulse, the lower initial cost and scalable pricing model make it easier to see immediate benefits without a heavy financial commitment.

Bonus Section: Paying for and Profiting from Your TMS Investment

Imagine Acme Widget Corp has decided to move forward with Pulse and opts for the Pay-as-You-Tender subscription model. With an average tender cost of $13.28 per shipment and a monthly volume of 45 shipments, it's time to calculate the Return on Investment (ROI) for this new system.

Acme can achieve both a return and a profit from this investment. By utilizing Pulse’s streamlined quoting and tendering process, Joe can now obtain real-time transportation costs with just a click. This efficiency allows him to incorporate the TMS cost directly into each shipment.

Joe can adjust his quotes to include an additional $13.28 per shipment, effectively covering the cost of the TMS. This means that every sale Acme Widget Corporation makes contributes to offsetting the TMS expense, ensuring that the investment is not only covered but also generates a profit.

Streamlining Operations for Growth

We’ve debunked the myth that a business can be too small for a TMS, and we’ve shown how the investment can quickly translate into significant ROI. Now, let’s dive into how Acme Widget Corporation’s new transportation process is helping Joe operate more efficiently, without spending his days lost in his email inbox.

Quoting:

Joe now ships 45 shipments per month and can obtain quotes from all his trusted partners in seconds with a single click. Every quote is automatically stored in his TMS, making it easy to review later—no more hunting through emails for the right quote.

Tendering:

With all his shipments organized in the TMS and instant, structured quotes from carriers, tendering has become a breeze. Joe can create a Bill of Lading (BOL), tender a shipment, and generate a signed rate confirmation between Acme Widget Corp and the carrier with just one click. This streamlined process simplifies freight payment and auditing.

Load Tracking:

Joe’s TMS now serves as an automated tracking co-pilot, providing real-time updates on truck locations and shipment statuses. This allows Joe to focus on other tasks. We advise potential customers to ensure that any TMS they select includes built-in tracking—otherwise, they might end up needing to purchase additional third-party software.

Scalability:

One of the most critical aspects of choosing a TMS is ensuring it can grow with your business. Pulse is designed with scalability at its core, meaning it adapts seamlessly as your business expands. Whether Joe’s company ships 45 or 450 shipments per month, Pulse can handle the increased volume without missing a beat. As demand rises, Pulse scales effortlessly, providing the same level of efficiency and automation, regardless of the workload.

We’ve explored how a fictional company can benefit from a TMS, but now let’s take a look at a real-life case study of a customer who has experienced these benefits firsthand: Boom & Bucket Accelerate Sales with Pulse

Unlock the Full Potential of Your Business with Pulse: The TMS for All Sizes

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As we’ve explored throughout this article, the notion that a Transportation Management System (TMS) is only for large enterprises is a myth. Small and medium-sized businesses, like Acme Widget Corporation, can significantly benefit from implementing a TMS. From streamlining operations and improving efficiency to enhancing customer satisfaction and supporting business growth, a TMS offers tangible advantages that are crucial for success in today’s competitive marketplace.

With Pulse, businesses of all sizes can leverage the power of a TMS without the high costs and complexities traditionally associated with these systems. The scalability of Pulse ensures that as your business grows, the TMS grows with you, adapting to your evolving needs and providing consistent value. By automating key logistics processes, improving delivery accuracy, and enabling quick responses to customer demands, Pulse empowers businesses to operate more efficiently and deliver superior customer experiences.

In conclusion, no matter the size of your business, the benefits of a TMS like Pulse are within reach. Investing in a TMS is not just about managing your current shipping needs—it’s about laying the foundation for future growth and profitability. By adopting Pulse, you’re not just keeping pace with your competitors; you’re setting the stage for long-term success in the ever-evolving world of logistics.

Ready to take your business to the next level? Don’t let outdated processes hold you back any longer. Pulse is designed to grow with your business, offering you the tools you need to streamline operations, improve customer satisfaction, and drive profitability—no matter your size. Schedule a free demo today and see how Pulse can transform your logistics into a competitive advantage. Your business is ready for the big benefits of a TMS—are you?

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