TMS or DMS: which is best for your transport operations?
- March 10, 2025
- 5 mins
Effective transportation management is a major challenge for many companies. In this context, TMS (Transportation Management Systems) and DMS (Delivery Management Systems) have become essential tools. However, choosing between a TMS and a DMS is not always straightforward, as these two software solutions have both similar and distinct features and functionalities.
In this article, we explore TMS and DMS in detail, their key features, advantages, and their similarities and differences. We will also address route optimization, a crucial aspect of delivery management.
What is a TMS ?
A Transport Management System (TMS) is software dedicated to managing the transportation of goods.
Key features of a TMS
Strategic analysis and decision support
- Defining optimal logistics schemes (number of platforms, flows, etc.) to meet deadlines and reduce costs
- Building and analyzing transport budgets
- Reporting on transport activity (shipment tracking and delivery time compliance, vehicle fill rates, CO2 emissions, etc.)
Transport planning and execution
- Planning shipments and delivery/collection routes
- Optimizing loads and routes
- Selecting the mode of transport (road, air, sea, etc.)
- Comparing rates and booking transport providers
- Real-time tracking and tracing of shipments
Operational transport management
- Optimizing delivery routes
- Assigning drivers and vehicles
- Managing resources (truck fleets, drivers)
- Issuing transport documents (waybills, invoices, etc.)
- Managing exceptions (delays, damages, disputes, etc.)
TMS systems are involved at all levels (strategic, tactical, and operational) of transport management, offering features for optimization, planning, execution, and reporting.
TMS providers
There are numerous TMS providers on the market, each with specific features for different industries. Among the French providers, we can mention Acteos, Cofisoft, Dashdoc, Everest, Klareo, Transporeon. Globally, EPG (Ehrhardt Partner Group), Körber, Manhattan Associates, Blue Yonder, e2open, and Infor are part of the TMS ecosystem.
What is a DMS?
A Delivery Management System (DMS) is software designed to plan, optimize, and efficiently manage the final delivery operations of goods to recipients.
Key features of a DMS
Fleet and resource management
DMS integrates tools for managing vehicle fleets and delivery personnel. It allows monitoring the condition of vehicles, scheduling maintenance, and efficiently allocating delivery personnel based on their availability.
Route planning and optimization
DMS enables strategic planning of delivery routes and optimization of trips to minimize distances and travel times. This feature is crucial for reducing average costs (number of vehicles used and fuel consumption) and improving delivery punctuality. With advanced algorithms, DMS can also manage delivery time slots, vehicle capacity, driver schedules, and even traffic conditions.
Real-time tracking
Real-time GPS tracking of deliveries is a major asset of DMS. This feature provides full transparency on the status of orders and their precise location. It helps carriers react quickly in case of deviations from the planned route and allows customer support to provide accurate information to recipients about their deliveries.
Proof of delivery
To ensure complete traceability and reduce the risk of disputes, DMS offers various means to collect proof of delivery. Delivery personnel can confirm the successful receipt of parcels by recipients through several options. Electronic signatures directly in the mobile app are one of the most common methods. Additionally, geotagged photos taken at the time of delivery provide extra visual proof.
Finally, barcode scanning of parcels ensures that the correct package is delivered to the correct address. By providing these different methods to collect proof of delivery in a dematerialized manner, DMS enhances end-to-end traceability and facilitates handling in case of disputes.
Communication and notifications
DMS solutions offer the capability to send automated notifications via email, SMS, or push notifications. These channels keep recipients informed about the status of their delivery (order confirmation, estimated delivery times, imminent arrival notices, etc.).
Automated notifications ensure end-to-end transparency for customers. They receive real-time updates on their delivery status without needing to contact customer service, greatly enhancing their experience through increased visibility.
Analytics and reporting
Finally, DMS provides dashboards and detailed reports on key performance indicators (KPIs) such as delay rates, fuel consumption, delivery productivity, and more. These data allow for continuous analysis and optimization of operations.
With these comprehensive features, DMS enables companies to tackle last-mile delivery challenges in terms of speed, reliability, and service quality while managing operational costs effectively.
DMS providers
While the TMS market is quite mature with many established players, the DMS market currently has relatively fewer major solutions. Among the key DMS providers in France, we can mention Hub One, MTS-1, Notico Deliv by ChapsVision, and Woop. Internationally, companies like Getswift, Tookan, and Trakop stand out in this segment.
As DMS solutions are more recent and specialized in the critical last step of the logistics chain, their ecosystem is still expanding compared to the more mature TMS market. Nevertheless, there is growing interest from companies in these tools dedicated to optimizing last-mile delivery operations.
💡 The Hub One DMS offers all the standard DMS features, as well as additional functionalities particularly relevant for refrigerated transport, notably through IoT integration. These features include dock management and sorting assistance (real-time visualizations, light guides), cold chain management (continuous temperature monitoring with connected sensors), and reusable container tracking (precise management of stocks of insulated containers, rolls, and pallets).
TMS and DMS: what do they have in common?
Common users
TMS and DMS are primarily used by companies that need to regularly send, move, and receive goods. Naturally, carriers are the main users of such solutions to manage their various flows daily.
However, in recent years, these solutions have also targeted other users: shippers (companies that send goods). They have turned to these solutions to better control their transportation costs. E-commerce players, facing complex logistics with numerous back-and-forth movements (return management or “reverse logistics”), are also among the new users of TMS and DMS.
Connectivity and integration with existing information systems
A TMS and a DMS do not operate in isolation but integrate into a broader supply chain management system. Most TMS and DMS solutions offer connectivity to other key software solutions such as Warehouse Management Systems (WMS) and Enterprise Resource Planning (ERP).
This interconnection supports the entire end-to-end process:
- The ERP manages transactional aspects like accounting, order management, and invoicing.
- The WMS handles warehouse operations (palletization, order processing, shipping/receiving, inventory management, etc.).
- The TMS and DMS are responsible for managing the transportation of goods, route optimization, and carrier selection.
Integrating these systems allows for seamless data exchange and real-time visibility across the entire supply chain.
A growing trend towards SaaS models
Traditionally, carriers or shippers would acquire a TMS or DMS through a license. However, the SaaS (Software as a Service) model, based on cloud computing, is now the most common. In this model, the TMS and DMS provider owns the solution and hosts client data on its cloud servers. Clients access the TMS and DMS and their data via a secure connection by subscribing to a service.
Significant benefits
TMS and DMS offer substantial advantages for optimizing logistics operations:
- Cost reduction: TMS and DMS help reduce transportation costs by providing improved visibility and route optimization. These systems enable users to compare carrier rates, allowing them to choose the most cost-effective options. Additionally, optimizing routes reduces fuel consumption and associated costs.
- Increased operational efficiency: Through optimized loading and routing, these systems increase productivity and reduce operation times. They also maximize vehicle fill rates, improving overall delivery efficiency.
- Reduced carbon footprint: By optimizing routes, TMS and DMS reduce fuel consumption and CO2 emissions, promoting more sustainable and environmentally friendly transportation.
- Improved customer satisfaction: These systems offer better transparency and real-time delivery tracking, allowing customers to monitor their orders and enhancing their experience. More reliable and punctual deliveries boost customer satisfaction and loyalty.
- Risk reduction: TMS and DMS incorporate management of regulatory and contractual requirements, limiting legal risks and non-compliance penalties. They also enable quick responses to issues through real-time tracking.
TMS and DMS: what are the differences?
The difference between a Transport Management System (TMS) and a Delivery Management System (DMS) mainly lies in their functions and the segment of the logistics chain they manage.
A TMS primarily handles the transport plan, which involves the bulk transportation of goods to delivery centers. This step accounts for approximately 60% of total transport costs but only 10% of the challenges.
In contrast, the final delivery to the recipient encompasses 90% of the challenges. This requires effective communication between the shipper, the delivery driver, and the recipient, as well as managing uncertainties related to traffic, accessibility, the nature of the goods, and other specific constraints. Therefore, a DMS is dedicated to optimizing last-mile operations to address these numerous challenges.
Another distinction between the two systems is their ability to manage different modes of transport: a TMS can handle various modes, including maritime, rail, river, air, and road transport, while a DMS primarily focuses on managing local deliveries by road transport.
Though their functions are similar, TMS and DMS are not necessarily competitors but can be complementary. Together, they enable integrated and optimized management of the entire logistics chain, from the warehouse to the final recipient. A company can thus use a TMS for upstream transport optimization and a DMS for precise last-mile management, enhancing overall efficiency and customer satisfaction.
In conclusion, choosing between a TMS and a DMS, or using them together, depends on the specific needs of the company in terms of transport and delivery management. When well integrated, these systems offer a robust solution to overcome modern logistical challenges.
Focus on route optimization
In both TMS and, more so, in DMS, planning and route optimization are essential for the efficient management of transport operations. These tasks maximize resource efficiency, reduce costs, and ensure timely deliveries.
While some TMS and DMS providers develop their own route optimization tools, these internal solutions are often static and relatively limited, as route optimization is not always their core business. Therefore, many players in this field choose to partner with specialized route optimization providers like Kardinal, which has developed a continuously operating solution.
This dynamic approach allows real-time route adjustments based on on-the-field variables, such as traffic and new orders, offering increased efficiency over static solutions.
Moreover, Kardinal has the capability to integrate specific constraints of various industries into its algorithms (loading/unloading site capacities for waste transport, specific technician skills, etc.), enabling the creation of truly relevant routes.
By collaborating with specialists like Kardinal, TMS and DMS can offer more advanced and responsive route optimization, enhancing overall transport operation management and better meeting the needs of companies and their customers.
Continuous route optimization solution
Third-party route optimization solutions, such as the one offered by Kardinal, can be seamlessly integrated into the existing information systems and TMS or DMS already in place in companies. This streamlined integration is made possible through open API interfaces that allow for smooth data connection and exchange between different systems.
Kardinal is already partnered with many TMS and DMS providers such as Acteos, Dashdoc, Everest, Hub One, Klareo, and MTS-1. Learn more about our technology partners.
