How to Reduce Delivery Costs with a TMS: A Complete Guide

If you run a fleet, you know how much delivery costs keep rising. Fuel prices swing up, drivers clock more hours, and failed drop-offs burn time and cash. For many businesses, these costs eat straight into profits.

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A Transportation Management System (TMS) can flip the script. It gives you smarter routes, real-time tracking, and fewer manual mistakes, so you spend less and move faster. In this guide, we’ll show how a TMS helps cut delivery costs step by step and what to look for when picking one.

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What is a transport management system

Trying to juggle lots of deliveries at once? It’s tough. One hiccup, like a driver running late or a route changing—and suddenly your plan’s out the window. Managing all this by hand? That’s asking for trouble. This is why so many companies use a Transportation Management System (TMS).

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A TMS keeps everything organised. You can track shipments, map out better routes and make sure the orders leave warehouses on time.  It’s not about shiny tech. It’s about keeping the chaos under control and helping your team work smarter.

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And here’s the kicker: a solid TMS helps you spot issues before they snowball, saves cash by optimizing routes, and keeps staff sane. Customers? They’ll notice the difference too.

What are the different delivery costs?

When it comes to fleet management, there are delivery costs associated with it. Here are the different delivery costs of running a fleet:

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1. Fuel costs

Fuel costs are one of the highest costs in delivery. Thanks to factors like the oil markets, taxes and local supply issues, the fuel consumption keeps varying. As a result, the cost may go up and down. Poor route choices, heavy stop-and-go driving, and idling engines all burn through fuel.

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Even sending out a half-full truck doesn’t save much, empty space costs nearly as much to move as a full load. These little oversights chew into profits day after day. What’s the fix? Smarter routes. Regular vehicle check-ups.

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Training drivers to ease off the accelerator and cut back on idling. Some companies even upgrade to fuel-sipping vehicles. And don’t overlook the basics, like keeping tires properly inflated. Over time, these small habits stack up to real savings.

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2. Vehicle maintenance and depreciation

It costs a lot to keep delivery trucks running. Oil changes, brake pads, tire replacements, you name it, it adds up. And when a truck breaks down? That’s a double hit. You’re paying for repairs while losing time and missing deliveries. In some cases, you might even lose customers.

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Then there’s depreciation. Every mile shaved off the odometer chips away at a vehicle’s value. Even trucks that don’t break down still wear out. Older ones tend to guzzle more fuel and need more frequent fixes. At some point, keeping them on the road costs more than they’re worth.

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To tackle this cost well, you need to stay ahead with regular maintenance. Small issues have to be watched early before they turn into breakdowns that are expensive. Some companies swap out aging vehicles sooner and bring in newer models that run cleaner and cheaper. 

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3. Carrier and shipping fees

Working with third-party carriers? It’s not cheap. Rates depend on distance, weight, and how fast you need the shipment to get there. And the truth is, rush jobs or odd-sized loads? They’ll cost a lot more. So what’s the move? Start with relationships.

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Negotiating better rates isn’t just about volume; it’s about trust and consistency too. Some firms mix it up, using smaller regional carriers alongside the big names to spread risk. And if you’re moving enough freight, bringing part of it in-house might actually save money long term.

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4. Warehousing and handling charges

Warehousing isn’t just about having space to stash products. There are plenty of hidden costs, rent, electricity, insurance, security, and of course, the people who keep everything moving. Then there’s handling. Every time an item is picked, packed, or shifted around, it costs you. These little actions seem minor, but trust me, they add up.

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There’s also the cost of holding stock for too long. The longer goods sit, the more you pay in storage fees. Worse still, slow movers hog valuable space that could be used for faster-selling items. During peak times? Temporary storage can be even pricier, with vendors charging a premium for short-term solutions.

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5. Insurance and compliance costs

Insurance is one of those costs you can’t avoid. Trucks, cargo, and warehouses all need coverage. Premiums vary, but they tend to creep up year after year. Accidents, theft, or even a single claim can send rates soaring.

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Then there’s compliance. Staying on top of regulations isn’t free. Safety inspections, driver certifications, and record-keeping all take time and money. Skip something, and you’re looking at fines, or worse, downtime while you sort it out. So how do you manage it? Regular reviews of insurance policies help.

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Sometimes you’re overpaying for coverage you don’t even need. For compliance, many firms invest in software to track requirements and avoid mistakes. Training staff on safety and regulations also pays off, as preventing accidents is always cheaper than cleaning up after one.

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6. Last-mile delivery expenses

The last mile is where things get really expensive. Getting a package from a hub to someone’s doorstep might sound easy, but truth be told, it’s not. Traffic jams, missed deliveries, and tight time windows all push costs up. And with people expecting same-day or even two-hour delivery now?

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The pressure to go faster is huge, and so is the price tag. It’s even tougher in rural areas. Drivers often travel miles for just one or two stops. That burns more fuel and wastes time. Plus, stop-and-go driving means more wear and tear on vehicles.

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What’s the fix? Some companies group deliveries together or set up small fulfillment centers closer to customers. Others tap into gig workers or crowd-sourced drivers to cover last-mile runs. And yeah, route planning software is a lifesaver here. Every little bit of efficiency counts.

How a TMS helps reduce the different delivery costs

Step 1: Optimize Your Delivery Routes with TMS

So first up? Smarter routing. A TMS isn’t just there to spit out directions. It’s like your logistics brain on steroids. It looks at live traffic, weather hiccups, delivery windows, you name it, and then figures out the fastest, cleanest way to get it all done.

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Here’s what you need to do:

• Get your data in – Customer addresses, drop-off times, truck capacity, driver shifts. All of it. Garbage in, garbage out, right?
• Switch on live updates – Traffic jams? Storm rolling in? Your TMS will reroute drivers mid-trip so they’re not wasting time or gas.
• Cluster your stops smartly – Stop zig-zagging across town like a pizza guy. Group deliveries in the same area to save miles.
• Keep tweaking – Run reports weekly. If you see delays or weird detours, adjust and test again.

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Do this, and over time you’ll see fuel bills shrink, overtime hours drop, and way fewer customer complaints about late deliveries. Small changes, big ripple effects.

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Step 2: Compare Carriers and Manage Rates Smartly

Now that your routes are tight, let’s talk about shipping partners. Picking the right carrier isn’t about grabbing the first quote you get. A TMS gives you visibility into all your options, so use it to shop around and squeeze every penny.

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Here’s how to handle it:

• Pull up carrier rates side by side – Your TMS can compare multiple providers in seconds. No more jumping between websites or endless emails.
• Watch for hidden fees – Fuel surcharges, residential delivery fees, weekend rates… they creep in. Spot them early so you’re not surprised later.
• Negotiate wisely – You must have prices from various carriers, use this to your advantage, and push for better terms with your preferred carriers. 
• Keep the options open – It is wise not to stick to one provider. You can use national carriers for deliveries across the country and regional ones for local deliveries. 

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Getting this right saves you from overpaying and gives your team flexibility when things get busy. Plus, less time spent chasing quotes means more time fixing other leaks in your delivery process.

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Step 3: Automate Scheduling and Dispatch

Throw out the spreadsheets. Stop calling drivers one by one. Let the TMS handle it. Automation means fewer screw-ups, faster turnarounds, and zero overtime surprises.

• Set it and forget it – Enter jobs, and the system schedules drivers, routes, and loading slots for you.
• No more bottlenecks – Trucks aren’t waiting around for paperwork or loading instructions.
• Slash overtime costs – Smarter plans keep shifts inside regular hours.
• Instant reshuffles – Sick calls or breakdowns? The TMS reassigns tasks without skipping a beat.

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Do this right, and your dispatch runs itself. Smooth, fast, and way cheaper than manual planning.

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Step 4: Boost Visibility and Tracking

If you can’t see where your trucks are, you’re guessing. And guessing costs money. Delays pile up. Customers get frustrated.

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A TMS stops all that by showing you what’s happening in real time.

• Live map view – Know exactly where each driver is. See which deliveries are done, which are late, and who’s stuck in traffic.
• Jump on problems fast – If a driver falls behind, reroute or send a heads-up to the customer before it’s too late.
• Fewer missed stops – Customers get live ETAs. They’re more likely to be home, so your driver doesn’t waste a trip.
• Protect goods in transit – Alerts flag odd route changes or long stops, helping prevent theft or spoilage.

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This step alone saves money on fuel, repeat deliveries, and lost goods. It also means fewer angry calls asking, “Where’s my order?”, because everyone already knows.

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Step 5: Use Analytics and Reporting to Uncover Hidden Costs

You can’t fix what you don’t see. A TMS gives you reports that show exactly where your money is leaking. It’s like having a flashlight in a dark warehouse, you suddenly spot all the waste.

• Track key metrics – Fuel usage, driver hours, delivery times, failed drops, these numbers tell the truth. 
• Find patterns fast – Ask yourself Are certain routes always late? Are some vehicles guzzling more fuel? 
• Act on the insights – By using insights from reports you can fix problems. This can be anything like swapping old trucks, changing delivery windows and rerouting for fewer delays. 
• Benchmark performance – Compare your fleet over time or against industry averages to see how you’re doing.

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This step isn’t just about saving money now. It’s about building a system that keeps improving month after month. The smarter your decisions, the leaner your operations get.

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Step 6: Automate Freight Auditing and Payments

Going line by line on freight bills? It’s a slow grind. Hidden charges and double billing can easily slip past. A TMS keeps an eye on these for you and stops the leaks. 

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Step 7: Improve Driver Performance with Training

You can have the best TMS in the world, but here’s the thing, if your drivers aren’t using it properly, you’ll still bleed money. Think about it. All that tech won’t stop them from idling too long, burning through fuel, or skipping safety steps unless they’re trained right.

How Fynd TMS helps reduce delivery costs

Managing delivery expenses isn’t just about saving on fuel or finding cheaper drivers. It’s about fixing the little leaks across your operation, the routes that waste miles, the carriers that overcharge, the deliveries that fail and double your costs. Fynd TMS brings all of this under control with smart, practical tools designed to make logistics leaner and more predictable.

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Fynd TMS makes route planning simple. Drivers don’t waste hours in traffic or take long, winding roads. Instead, the system uses live traffic updates, delivery time preferences, vehicle size, and even local road rules to map out the fastest and most efficient routes.

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Keeping track of carrier costs can be exhausting. If you’re still making calls or managing endless spreadsheets, it’s even harder. Fynd TMS changes that by pulling live rates from multiple carriers into one clean dashboard. You see all your options at a glance and can pick the best deal in minutes, not hours.

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There’s more. Missed drop-offs aren’t just a customer headache; they pile up costs fast. Fynd TMS gives you real-time updates on every truck and stop, so you can jump on issues before they snowball into something bigger.

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 With this, you can say goodbye to all the headaches of manual data entry and confusing handoffs between teams. Information moves automatically and accurately from the warehouse floor onto trucks, keeping your inventory and delivery details perfectly aligned every step of the way.

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All these capabilities work together to cut down on fuel expenses, reduce overtime, prevent delivery failures, and secure better deals with carriers. Over time, these improvements build on each other, making your logistics operation leaner, more efficient, and more profitable.

What to look for in a TMS provider

Here is what to look for in a TMS provider:

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1. Ease of integration with existing systems

You don’t want a TMS that messes up your current setup. It should work nicely with your ERP, warehouse software, and order tools. Go for one that already has built-in APIs or connectors. That way, you skip months of custom coding. If the integration is smooth, your team can dive in fast without extra stress or annoying data errors.

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2. User-friendly interface and workflow automation

A clunky, hard-to-navigate interface can drag your entire operation down. If your TMS isn’t easy for your team to use, you’re looking at hours of extra work and probably weeks of training just to get everyone up to speed. A good system should feel almost second nature, so intuitive that even new staff can pick it up quickly without needing thick manuals or endless demos.

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3. Real-time analytics and customizable reporting

A TMS shouldn’t stop with just tracking shipments. That’s useful, sure, but what you really need is a way to see the bigger picture across your whole operation. Real-time analytics give you that visibility, what’s happening right now, not just yesterday’s data. And then there are the reports. When you can customize them around your KPIs, it’s so much easier to focus on what actually matters instead of getting lost in noise.

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4. Responsive customer support and training

Even if you buy the best system out there, it will hit roadblocks. In times like these, a responsive customer support team helps the most. This is why you should check that the TMS you are choosing provides 24/7 help and has account managers that can be assigned to you. 

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5. Proven track record in your industry

A TMS should have experience with your industry. A TMS provider with a history in your sector understands your pain points and likely already has solutions built for them. Look for testimonials, case studies, and success stories from businesses like yours to gauge their expertise.