Compliance, Safety, & Sustainability in Transportation Management Systems

Learn how a transportation management system can help businesses comply with strict regulations. Discover what a TMS is and why logistics companies need one.

Introduction

The transportation industry is strictly regulated, and companies operating in the transportation and logistics space are obligated to take compliance seriously while ensuring safe and sustainable operations. One useful tool for monitoring and maintaining compliance is a transportation management system (TMS). These systems help support the three key pillars of good operations: regulatory compliance, operational safety, and environmental responsibility.

Transportation management systems play a central role in modern logistics. They oversee core areas of the transportation lifecycle, including route optimization and planning, carrier selection and management, load optimization, tracking, auditing, and document management. When properly utilized, a TMS can help a company maintain safe, sustainable operations by effectively managing yard operations and driver utilization. Transportation management systems also offer features that support monitoring and document everything needed to ensure regulatory compliance.

Key Takeaways

A transportation management system helps companies monitor and manage all aspects of their operations.
Logistics companies are bound by strict regulatory requirements and must operate safely and sustainably.
Tracking, auditing, and document management are among the key functions of a TMS.
By providing visibility into the entire transportation lifecycle, a TMS helps managers plan efficient routes and maintain yard and driver safety.

How does a TMS Support Transportation Compliance?

Logistics providers must ensure they meet several regulatory requirements, including:

Hours of Service (HOS) regulations. Truck drivers and others who operate vehicles for a living are required to adhere to strict regulations regarding the maximum amount of time they can drive without a break and the minimum duration of their rest periods. Hours of service regulations also set maximums for the number of hours a driver can work in any given week. A TMS can help drivers and supply chain managers keep accurate records.
Electronic Logging Device (ELD) mandates. Electronic logging devices automatically record driving times, helping truck drivers keep duty records to comply with HOS regulations. While regulations vary between states and countries, in general, operators of large vehicles are required to have an ELD fitted. A TMS can collect data from ELD logs and use it for scheduling and fleet planning.
DOT/FMCSA requirements. The Federal Motor Carrier Safety Administration sets several regulations relating to vehicle and driver safety. These regulations include HOS requirements, drug testing, hazardous materials labeling, and vehicle maintenance rules. Transportation management systems cover vehicles and the workforce and provide visibility into all areas covered by DOT/FMCSA regulations.
Global trade and customs documentation. Companies that operate internationally are required to keep accurate shipping information and complete customs documentation for their loads. A TMS can streamline or automate this process, ensuring all records are complete, accurate, and filled out correctly.

By automating repetitive workflows and providing full visibility into fleet operations, a TMS can help ensure documentation for driver hours and shipment tracking is always up to date. It can also give logistics companies instant access to the information they need to ensure consistent carrier vetting, reducing the likelihood of issues being overlooked.

Customs information, driver logs, and vehicle maintenance logs can be generated automatically, saving time and helping supply chain managers prove compliance. In instances where a company works with a third-party carrier, the TMS can be used to track their driver logs, certifications, and track records, which helps with carrier selection and ensures high safety and compliance standards are maintained.

Similar integration with customs and border control systems helps reduce the complexity of completing customs documentation. It makes it easier to answer questions or respond to issues because all the information needed by customs is available in an easy-to-search dashboard.

The TMS Features That Promote Fleet and Driver Safety

Transportation management systems can help supply chain organizations improve fleet and driver safety by providing monitoring tools and proactive safety features.

Proactive Safety Features

Using historic safety data, a TMS can help optimize routes to avoid accident-prone areas. Some tools also offer real-time monitoring features. For example, a driver performance system can show information about driving habits, such as instances of hard braking or speeding. It's also possible to use IoT and telematics systems to gain real-time visibility into vehicle conditions, providing alerts when they're due for maintenance or show signs of wear and tear.

Incident Monitoring and Data Collection

If an issue is detected (or reported), the TMS can log the incident report for insurance purposes and facilitate reporting to any required regulatory body. This process is made easier thanks to integration with mobile driver apps, fleet monitoring systems, and dash cams, providing a single data source where compliance officers can collect all the information required for their reports.

Predictive Analytics

Identify potential problems, such as risky drivers or fleet vehicles that are in poor condition, and take action before an incident occurs. AI agents can flag hazards that humans might miss, preventing potentially serious accidents.

How to leverage a TMS for sustainability and environmental goals

The transportation part of the supply chain is responsible for a significant portion of its environmental impact. According to the International Energy Agency, transport accounts for one-third of CO2 emissions in end-use sectors. A TMS can help supply chain managers plan shorter, more efficient routes with fewer empty miles. This minimizes fuel consumption, reduces wear and tear on the vehicles, and reduces carbon emissions.

With the right configuration, it's possible to get emissions reports on a carrier, lane, or shipment basis, helping optimize efficiency on a granular level. The information collected by the transportation management system can also be used to generate sustainability and ESG compliance reports and highlight how certain changes, such as switching to electric fleets or intermodal shipping methods, have improved efficiency.

Sustainability is important on a global level, with many governments implementing green initiatives. For example, the EU green deal aims to encourage organizations to make changes designed to address climate change. Meanwhile, California's CARB regulations focus on encouraging the adoption of zero-emission vehicles. Organizations working toward either of those goals or their own corporate net-zero goals could benefit from using a TMS to audit their current emissions, find areas for improvement, and assess the results of any changes made to their fleet or shipping methods.

Benefits of Aligning Compliance, Safety, and Sustainability

When compliance efforts, safety initiatives, and sustainable practices are aligned, companies benefit in numerous ways. In the long term, following these best practices can lead to significant cost savings as companies experience fewer fines/penalties for violations and enjoy lower insurance premiums, fewer breakdowns, and reduced fuel usage.

Additionally, there are reputational benefits to being perceived as a responsible, ethical, and safe logistics partner. Once improved compliance, safety, and sustainability standards are implemented, organizations become more resilient and will be better positioned to adapt to future regulatory changes. An effective TMS can also support better real-time decision-making and facilitate improved shipper-carrier collaboration with smoother, faster, and more accurate data interchange.

Implementing new systems requires careful planning, and choosing the right transportation management system is essential. However, once the system is in place, the long-term benefits will quickly become apparent in the form of increased efficiency, cost savings, and an improved reputation with clients and suppliers.

Why you should be choosing a TMS that supports modern logistics standards

Supply chain and logistics companies that are considering implementing a new TMS or upgrading from a legacy system should look for one that's compatible with modern logistics standards and supports their existing tools. Things to consider include:

Built-in compliance dashboards and alerts. Preconfigured compliance dashboards offering alerts and at-a-glance reports that cover critical information can help leaders monitor key compliance areas and leverage the information collected by the software.
Easy integration with fleet, ELD, and IoT systems. Having the option to integrate the TMS with other systems, either by data feeds, APIs, or standard EDI formats, maximizes the usefulness of all systems. The more data that's available to the transportation management system, the more accurate analytics and alerting features are likely to be.
A configurable rules engine. Regulations are constantly evolving. A configurable rules engine helps managers keep it up to date when new laws come into effect or existing regulations are updated, future-proofing the system.
Carbon tracking/ESG reports. Features for monitoring and reporting on carbon emissions or other ESG goals can save fleet managers time and help them provide the evidence required for their compliance and sustainability reporting.

When evaluating a new TMS, talk to multiple vendors and ask about the features their platform offers and the technologies they support. Think carefully about specific organizational challenges, such as region-specific compliance issues for companies operating in the U.S. or the EU. If specific features are required, ask the vendor if they're available on the platform and how they can be implemented.

For example, if the ability to pull data from a specific legacy system to produce automated reports is required, request a demonstration of that feature to confirm the implementation won't require extensive support from developers. A sophisticatedTMS will offer powerful APIs and extensive support for major warehouse management, yard management, and other supply chain tools.

A TMS Offers Far More Than Routing and Scheduling

Transportation management systems offer far more than routing and scheduling features. They provide visibility into all aspects of logistics operations, helping logistics managers monitor their workforce, fleet, third-party carriers, and freight. When these features are utilized to their full effectiveness, they can assist with regulatory compliance, sustainability, and safety. This can improve public perception of the business and support ESG goals.

In the current competitive logistics landscape, businesses are under scrutiny from regulators, clients, and suppliers who want to ensure the companies they're working with uphold high ethical standards. Supply chain leaders should examine their current systems and carefully evaluate their features and performance, considering whether they're up to the task of supporting the increasingly complex demands of modern regulations. Manhattan offers supply chain management solutions, including transportation management software, that can grow and adapt to a company's needs. Contact us to learn how we can help businesses streamline their supply chain operations.

How Does a TMS Help With Transportation Compliance?

A TMS provides a central point for logging information and a single source of truth, giving managers clear visibility into the status of their operations. By unifying information from several sources and providing reliable, efficient information for planning and documentation, a TMS platform helps logistics leaders monitor and document the compliance of their organization.

A TMS can be used to monitor compliance with and provide documentation for DOT/FMCSA requirements, Hours of Service (HOS), Electronic Logging Device (ELD), and customs regulations. It may also be useful for state or local authority-specific traffic regulations.

The workforce tracking, route planning, fleet management, and logging features of modern transportation management systems can help improve driver and vehicle safety. These features give visibility into driver hours, maintenance schedules, and fleet utilization, reducing the risk of driver fatigue or vehicle breakdowns.

The route planning and load management tools of a TMS can help reduce fuel usage and also lower the number of empty miles travelled by vehicles in a fleet. These features can help logistics companies improve the sustainability of their operations.

The core features of modern TMS platforms can aid logistics companies in their compliance efforts. Compliance isn't always explicitly marketed as a feature of a TMS, but the platform's capabilities can be used for tracking regulatory compliance and creating the required documentation.