At its core, a transportation management system (TMS) helps companies plan, execute and optimize outbound and inbound shipments. While most shippers have a TMS, market research firm Grand View Research expects the international TMS solutions market to increase by 17.4% from 2024 to 2030 due to technology advancements such as artificial intelligence (AI) and evolving trends in global trade.

As trade risks increasingly disrupt global supply chains, the need for an international TMS becomes more evident to maneuver alternative transportation modes, compare rates, improve speed of delivery, and analyze trade lane options — all while ensuring customs documentation and the filing of such paperwork are compliant based on the origin and destination of every shipment.

If you think any TMS will help cover all of that, it’s time for a reality check: The fact is, most TMS solutions are designed to handle only domestic trade, meaning you’ve been set up to fail for far too long. Managing international shipments with a domestic TMS is like trying to navigate the world using a bus pass. It might get you started, but you will soon be lost in a sea of customs complexities and intermodal roadblocks.

This article covers why domestic TMS solutions cannot possibly serve international shippers and BCOs adequately and why an international TMS is your ticket to control. Read on for the details, or contact us to start a deeper discussion.

The Limitations of Domestic TMS

Domestic TMS are just that, domestic, typically focused on a single country and usually on a single mode of transportation.

These systems offer basic solutions such as local route optimization, scheduling, tracking and compliance with national regulations.

But domestic TMS often lack capabilities that international shippers and BCOs need for global trade, such as risk management, trade compliance, currency differences, language barriers, and multi-modal transportation management.

Domestic shipments are also usually single-leg journeys involving trucking or rail transport, whereas international shipments require multiple legs and various modes of transportation, including ocean and air.

Shippers that operate around the world need technology that enables them to work compliantly and seamlessly across various languages, cultures, and time zones.

Adhering to country-specific customs compliance is also not easy. Shippers and BCOs are ultimately responsible for:

• Understanding the regulations and rulings.
• Ensuring the appropriate classification of products.
• Ensuring the capture of appropriate information.
• Ensuring that required and supportive documentation is complete, on file, easily. accessible, and shareable.
• Overseeing the holistic customs process (including their brokers, too).

As such, any breakdown in communication and/or lack of, or incorrect documentation can be costly.

Instead of operating various domestic TMS in different parts of the world, a single international TMS makes more sense.

The Advantages of an International TMS Solution

A single international TMS provides a host of advantages, among which are:

• Comprehensive trade compliance – Ensures shipments comply with country-specific regulations and manages all documentation and compliance requirements.
• Integrated multi-modal transportation – Coordinates across all transportation modes including ocean, air, rail and road.
• Product (SKU) management – Provides SKU-level visibility and ensures accurate documentation and compliance with local regulations. Most TMS only provide shipment-level data — and there’s a good chance that data is incomplete.
• Enhanced visibility and control – Offers real-time visibility and proactive alerts and enables management by exception and addresses issues before they escalate.
• Centralized data and document management – Centralizes all data and documents related to international trade and provides a “single source of truth” for all stakeholders.
• Management of multi-leg, multi-modal shipments – Combines multiple legs of a shipment across different transportation modes and can build complex routes, when needed, and transitions.

The Role of the Warehouse

The warehouse is often forgotten in terms of domestic and global transportation strategy. However, the warehouse actually acts as a central hub connecting domestic and international logistics.

Through advanced automation and enhanced supply chain visibility, for example, a TMS solution can increase warehouse efficiency and smooth processes like inventory management, order fulfillment, and route selection.

A TMS can also provide real-time visibility into inventory levels through one centralized platform. It can also integrate with many warehouse management systems (WMSs), enterprise resource planning (ERP) software, and order management software for seamless inventory and order oversight.

By understanding inventory type and level by warehouse, domestic TMS can manage local deliveries to and from a designated warehouse.

However, taking it a step further, an international TMS can manage global shipments, also based on inventory type and level by warehouse, along with multi-modal transportation options based on speed and/or rate and compliant customs filing and management.

3rdwave: Finally, a TMS Solution for International Shippers

Domestic TMS are fine for companies operating only in a single country. However, global trade is expected to recover from a much slower 2023 and double, if not more, this year.

The OECD, for example, expects global trade in goods and services to grow by 2.3% this year and 3.3% in 2025 – more than double the 1% growth seen in 2023. Meanwhile, the IMF’s latest World Economic Outlook puts world trade growth at 3% and 3.3% for 2024 and 2025 and even the WTO expects trade volumes to grow 2.6% and 3.3% in 2024 and 2025, respectively, after a slowdown last year.

As such, for a company to continue to grow, it should consider global trade opportunities.

3rdwave can help by providing a transportation platform designed explicitly for international shipments. It fully integrates customs compliance and transportation management in a single platform that provides all stakeholders with product-level visibility. This level of integration is indispensable to ensuring everyone can access the information they need in their preferred system, to make informed decisions that keep products moving, or to get them back on track in the event of a disruption.

With real-time data, seamless integration, and expert support, businesses can confidently navigate the ever-changing international shipping landscape and succeed in even the most challenging environments.

Visit our website to learn more or schedule a demo to see 3rdwave’s proprietary Shipment Execution Platform™ in action.

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