Transport planning & TMS

Every day a distribution centre faces a pile of orders, each with a destination, a size and a due date. Transport planning turns that pile into trucks on the road at the lowest cost that still meets every delivery promise. It answers, in order:

1. What ships together? Group orders into shipments by destination and due date.
2. How? Choose the mode and vehicle size: full truck, part load, parcel.
3. With whom? Pick the carrier for each load from contracted rates, capacity and performance.
4. How is it packed and routed? Build loads that fit weight and volume limits; sequence stops on multi-drop routes.
5. When? Book pickup slots at the dock and delivery windows at customers.

Then execution: tendering the load to the carrier (who accepts or rejects), tracking it on the road, confirming delivery, and finally freight audit and payment, checking each invoice against the agreed rate.

A TMS (transportation management system) supports all of this: it holds carrier contracts and rates, optimizes loads and routes, sends tenders, collects tracking updates and audits invoices. The biggest savings usually come from planning across many orders at once, combining shipments and choosing modes, rather than from squeezing carrier rates.

The objective is roughly:

minimize freight + accessorial charges (waiting, extra stops) + penalties for late delivery

subject to vehicle capacities, delivery windows, driver hours and carrier capacity.

Planning a day’s orders

A TMS makes these decisions across hundreds of orders at once: grouping, choosing vehicle sizes, building multi-stop routes and comparing carriers.

The tendering waterfall

Each planned load is offered to carriers in a set order, the routing guide:

1. The primary contracted carrier for the lane, who has a set time to accept.
2. If they decline or don’t respond, the backup carrier.
3. Then other approved carriers.
4. Finally the spot market, at whatever the market charges.

Every step down usually costs more, which is why tender acceptance matters as much as the contract rate.

Freight audit

Every carrier invoice is checked against the agreed rate, the actual weight or volume, and any extra charges (waiting time, extra stops, loading). Charges that weren’t agreed or can’t be proved are disputed automatically. Even small error rates add up over thousands of invoices.

Measures

Freight cost per kg or per unit shipped (not per trip), vehicle fill by weight and volume, on-time pickup and delivery, tender acceptance by carrier and lane, empty kilometres, and the share of loads that fell to the spot market.

The optimization inside

A TMS combines several classic problems: bin packing (fitting orders into vehicles by weight, volume and pallet positions), vehicle routing (sequencing stops within time windows) and assignment (choosing carriers within their capacity and contract commitments). Real systems solve them together, with rules such as cut-off times, customer delivery windows and driver hours, and re-plan as new orders arrive through the day.

Waiting time costs everyone

Trucks that wait hours to load or unload cost carriers money, so carriers charge detention or raise rates for that shipper. Dock appointment scheduling, preparing loads before the truck arrives and fast unloading at customers cut waiting time. Shippers known for short waits and quick payment get better acceptance and rates: being a shipper of choice is a commercial advantage.

Integration and compliance

A TMS needs orders from the ERP, shipment readiness from the warehouse system, rates and capacity from carriers, and tracking data back from the road. In India, consignments above ₹50,000 in value generally need an e-way bill generated before movement, so transport planning and tax compliance are linked; many companies generate e-way bills directly from their TMS or ERP.

Collaboration between shippers

Two companies sending part loads to the same region can share trucks (horizontal collaboration), filling vehicles neither could fill alone. It needs trust, shared planning and agreed rules for splitting costs, but it can cut cost and emissions significantly on thin lanes. Logistics providers that run shared networks offer the same benefit without direct collaboration.

Planning cadence

Strategic decisions (which carriers, which lanes, which modes) are set in annual or seasonal tenders. Tactical decisions (shipping days per region, fleet plans) are reviewed monthly or quarterly. Operational planning happens daily or in waves through the day. Mixing these up, for example renegotiating rates during daily planning, makes all of them worse.