A Practical Guide to Optimising Freight Operations Through Connected Systems
Transport costs represent one of the largest variable expenses for New Zealand logistics operators—often consuming 8-15% of revenue. Yet many businesses still manage freight through a patchwork of carrier spreadsheets, email exchanges and manual rate comparisons. Meanwhile, their warehouse, order management and financial systems operate independently, creating data silos that make it nearly impossible to optimise transport decisions or understand true freight profitability.
A Transport Management System (TMS) addresses this challenge by providing purpose-built software for planning, executing and settling freight movements. But here's what many operators miss: a standalone TMS, disconnected from your core business systems, solves only part of the problem. The real operational and financial benefits emerge when your TMS integrates seamlessly with your Enterprise Resource Planning (ERP) platform—creating a unified flow from customer order through delivery confirmation to freight invoice.
For NZ transport and logistics operators managing the complexities of inter-island shipping, regional distribution networks and varying lead times, understanding how TMS and ERP work together isn't just technical knowledge—it's foundational to competitive freight operations.
What a Transport Management System Actually Does
At its core, a TMS is software designed specifically for managing the physical movement of goods across road, sea, rail and air. Think of it as the operational brain of your freight operation, handling the complex workflows that begin when an order needs shipping and end when freight charges are reconciled and paid.
Planning & Optimisation Functions
Carrier Selection and Rate Shopping: The TMS evaluates available carriers against customer delivery requirements, comparing rates, transit times and service levels. Rather than manually checking multiple carrier websites or calling for quotes, the system queries integrated rate tables or connects directly to carrier rating engines, presenting optimised options in seconds.
Load Planning and Consolidation: The system analyses pending shipments to identify consolidation opportunities—multiple customer orders travelling to similar destinations that can share transport, reducing per-order freight costs. For LTL (less-than-truckload) shipments, the TMS calculates optimal load sequences. For FTL (full-truckload) movements, it plans multi-stop routes that maximise vehicle utilisation.
Mode Selection: When multiple transport options exist—courier, LTL carrier, FTL truck, rail, coastal shipping—the TMS evaluates cost, transit time and customer service level agreements to recommend the optimal mode. This becomes particularly valuable in New Zealand where inter-island freight involves mode choice between roll-on/roll-off ferries, container ships or air freight for time-sensitive goods.
Route Optimisation: The system plans efficient pickup and delivery sequences, considering vehicle capacity, delivery windows, road restrictions and driver hours. In NZ's regional networks where a single vehicle might serve multiple rural delivery points, intelligent routing directly impacts fuel costs and delivery performance.
Execution Functions
Carrier Tendering and Booking: Once transport plans are confirmed, the TMS electronically tenders shipments to selected carriers, transmitting all necessary details—pickup location, delivery address, commodity information, special handling requirements. The carrier confirms acceptance, and the booking is locked in without phone calls or email chains.
Documentation Generation: The system produces all required shipping documentation—commercial invoices, packing lists, dangerous goods declarations, customs documents for international shipments. Shipping labels with carrier-compliant barcodes print automatically, ensuring accurate scanning throughout the carrier's network.
Shipment Tracking and Visibility: As freight moves through the network, the TMS captures milestone events—pickup confirmed, in transit, out for delivery, delivered—either through carrier integration or manual updates. This visibility allows customer service teams to answer "where's my order?" questions instantly and enables proactive management of exceptions.
Exception Management: When delays occur—missed pickups, weather disruptions, mechanical breakdowns—the TMS alerts relevant staff immediately. Rather than discovering delivery failures after the fact, operations teams can intervene proactively, arranging alternative transport or managing customer expectations.
Settlement and Audit Functions
Freight Invoice Auditing: When carrier invoices arrive, the TMS matches charged amounts against contracted rates, flagging discrepancies automatically. Accessorial charges—fuel surcharges, residential delivery fees, liftgate services—are validated against agreed rate cards. Studies show that manual freight invoice processing typically contains 5-10% errors; automated audit reduces this significantly.
Cost Allocation: Validated freight charges flow to the financial system, allocated to the correct customer orders, cost centres or profit centres. This enables accurate job costing, customer profitability analysis and landed cost calculation—critical data that's often approximated or entirely missing when transport management is manual.
Carrier Performance Measurement: The TMS tracks on-time pickup and delivery performance, damage rates, and invoice accuracy by carrier and lane. This data informs carrier selection, contract negotiations and network optimisation decisions.
All of these functions reduce manual administrative effort—phone calls, spreadsheet updates, email follow-ups—whilst improving visibility from depot to delivery. But they deliver maximum value when connected to the broader business systems that drive transport demand and consume freight cost data.
Why TMS and ERP Integration Matters
A standalone TMS—operating independently from your order management, inventory and financial systems—creates its own data silo. Integration between TMS and ERP transforms transport from an isolated operational function into a coordinated element of your end-to-end supply chain.
Single Source of Truth Eliminates Duplicate Data Entry
When your ERP and TMS are integrated, order details flow automatically from the order management system into transport planning. Customer addresses, product descriptions, special handling requirements, delivery windows—all the data needed for freight booking exists in your ERP and transfers to the TMS without manual re-keying.
This eliminates transcription errors that plague disconnected systems. Wrong delivery addresses, incorrect product quantities, missing special instructions—these data quality issues cause delivery failures, customer complaints and additional freight costs for redelivery. Automated data flow prevents them entirely.
When a shipment completes, delivery confirmation updates the order status in your ERP automatically, triggering invoice generation, inventory updates and customer notifications without manual intervention.
Real-Time Data Enables Better Transport Decisions
Integration provides the TMS with live context from your ERP that directly improves transport planning:
Inventory Availability: The TMS knows which depot holds available inventory for each order, enabling it to plan shipments from the optimal location based on proximity to customer, current inventory levels and depot capacity. Without ERP integration, transport planners make these decisions based on outdated information or assumptions.
Customer Service Level Agreements: Customer delivery requirements, negotiated rates and service expectations stored in your ERP's customer master flow to the TMS, ensuring that transport plans respect customer commitments. Express delivery customers automatically receive priority carrier selection; bulk customers with flexible timing receive economical transport options.
Order Priority and Urgency: Rush orders, backorders for key customers, or shipments for time-sensitive projects are flagged in the ERP. The TMS prioritises these appropriately during carrier selection and load planning, preventing situations where urgent freight sits in consolidation whilst standard orders ship immediately.
Product Characteristics: Dimensions, weight, handling requirements, dangerous goods classifications—all the product attributes that impact freight planning and rating—flow from your ERP's item master to the TMS. This ensures accurate freight quotes, proper carrier selection and compliance with handling regulations.
Automated Financial Flows Accelerate Billing and Improve Accuracy
When TMS and ERP are integrated, the financial loop closes automatically:
Delivery-Triggered Invoicing: Once the carrier confirms delivery and the TMS validates the delivery event, the ERP automatically generates the customer invoice. For operators billing freight separately or including it in product pricing, this automation eliminates the manual process of compiling proof-of-delivery documents, matching them to orders and creating invoices days or weeks after delivery.
Freight Cost Allocation: Audited and approved freight invoices from carriers post directly to your general ledger, allocated to the correct orders, customers and cost centres. This enables real-time visibility into freight costs by customer, product line, depot or route—data that's essential for profitability analysis and pricing decisions but rarely available in disconnected systems.
Accrual Accuracy: Even before carrier invoices arrive, the TMS can accrue estimated freight costs based on quoted rates and confirmed shipments. This improves financial reporting accuracy, particularly at month-end when accruals matter for P&L reporting. When actual invoices arrive and are audited, any variance between estimate and actual automatically adjusts the accrual.
Customer Freight Billing: For operators who bill freight separately to customers or offer freight collect options, the integrated system ensures that freight charges on customer invoices match actual carrier costs (plus markup), preventing revenue leakage from under-billing or customer disputes from over-billing.
Legacy System Challenges That Integration Solves
Many New Zealand logistics operators are still managing transport on systems cobbled together over years—basic TMS functionality (or even just spreadsheets), separate warehouse management, disconnected accounting software. The pain points are consistent:
Batch Updates and Stale Information
On-premise legacy systems typically update through batch processes—overnight runs that compile data from various sources, update databases and generate reports. By morning, you're looking at yesterday's information trying to make today's transport decisions.
Current inventory levels? Last night's snapshot. Order status? Updated overnight. Carrier tracking events? Synchronized on the previous batch cycle. This latency directly impacts transport efficiency—orders that should consolidate are missed because inventory allocations weren't visible in time, urgent orders aren't prioritised because their rush status hadn't synchronised to the transport system, and carrier delays aren't discovered until after delivery failures occur.
Cloud-based ERP with integrated TMS operates in real-time. Inventory allocations, order status changes, carrier tracking updates—all visible immediately, enabling proactive management rather than reactive firefighting.
Disconnected Systems Require Manual Reconciliation
When warehouse, transport and finance systems don't communicate, operational staff become human middleware:
- Orders are managed in the warehouse system, then manually entered into transport planning spreadsheets
- Freight bookings are made with carriers, then delivery details are manually updated in the order system
- Carrier invoices arrive in email, are manually matched to shipments, validated against rate cards in spreadsheets, then manually entered into accounting software
Each handoff consumes time and introduces error risk. When discrepancies emerge—invoice amounts that don't match quotes, delivery addresses that don't align across systems, shipment statuses that conflict—resolution requires comparing data across multiple platforms, email archaeology and phone calls to carriers or customers.
Integrated ERP and TMS eliminate these reconciliation points. Data flows automatically, validated once at source, consistent across all systems.
Slow, Risky Upgrades Block Innovation
On-premise systems require significant IT projects for upgrades—new software versions, infrastructure changes, custom integration updates. Many operators defer these upgrades for years because the disruption risk outweighs the perceived benefit. The result: you're operating on increasingly outdated technology, missing new features and functionality that could improve operations.
Cloud ERP platforms update continuously, delivering new capabilities without disruption or IT projects. Transport management integrations benefit from the same continuous improvement—new carrier connections, enhanced rating algorithms, improved tracking visibility—delivered automatically rather than gated behind upgrade projects.
Why This Particularly Matters in New Zealand
New Zealand's geography and logistics network create specific challenges where integrated TMS and ERP capabilities deliver outsized value:
Inter-Island Complexity
Managing freight across Cook Strait involves multiple modes—roll-on/roll-off ferries, container shipping, air freight for urgency—each with different lead times, costs and booking requirements. An integrated system can evaluate these options considering both freight cost and inventory carrying cost, selecting the mode that optimises total cost.
For example: faster but more expensive air freight for high-value, fast-moving inventory might deliver lower total cost than cheaper sea freight for products that will sit in destination warehouses depreciating. Without integration between transport costs (from TMS) and inventory carrying costs (from ERP), operators make these trade-offs based on gut feel rather than data.
Regional Distribution Networks
New Zealand's dispersed population means many logistics operators serve regional centres with lower delivery density. Consolidated freight planning becomes critical—combining multiple customer orders into efficient routes rather than separate deliveries for each order.
This requires visibility into pending orders across all customers, delivery windows, product availability and vehicle capacity—information that spans order management, inventory and transport. Integration provides this holistic view, enabling intelligent consolidation that reduces freight costs per delivery whilst maintaining customer service levels.
Variable Lead Times and Weather Disruption
Weather events—snow on South Island alpine routes, flooding in the upper North Island, Cook Strait ferry cancellations—routinely disrupt NZ freight networks. Integrated systems enable faster response: when a carrier reports weather delays, the TMS flags affected orders immediately, the ERP identifies which customers are impacted and what inventory alternatives exist, and customer service teams proactively communicate revised delivery expectations.
Without integration, discovering which customer orders are affected by a specific carrier delay requires manual cross-referencing between transport bookings and order systems—time-consuming work that delays customer communication and prevents proactive mitigation.
Coastal Shipping Complexity
For bulk movements, heavy equipment or inter-island freight, coastal shipping offers economical transport but with longer lead times and more complex booking requirements. Managing this mixed-mode network—some freight via road carriers, some via coastal shipping, some via air—requires sophisticated planning that considers lead time requirements, cost targets and product characteristics.
Integration allows the TMS to make these mode selection decisions based on actual customer requirements and inventory positions from the ERP, rather than default rules that over-use expensive modes or delay deliveries through inappropriate mode selection.
Frequently Asked Questions
Is a TMS the same as an ERP?
No. They serve complementary but distinct functions. Your ERP is the system of record for your business—managing orders, inventory, customers, finance, HR and all core business processes. It's the single source of truth for "what does the business need to do?" A TMS is a specialist system focused specifically on transportation—planning, executing and settling freight movements. It answers "how do we physically move goods most efficiently?"
The key insight: TMS works best when integrated with ERP. The ERP tells the TMS what needs to ship, from where, to whom and by when. The TMS determines the best way to execute that requirement, then reports back execution status and costs to the ERP for financial processing and customer visibility.
Some ERP platforms include basic transport functionality, whilst others integrate with specialised TMS platforms. For operators with complex transport networks—multiple modes, numerous carriers, sophisticated freight rating—a dedicated TMS integrated with ERP typically delivers better functionality than basic ERP transport modules.
Do we need warehouse management capabilities before implementing TMS?
Not necessarily. You can implement ERP with integrated TMS and gain significant freight management benefits immediately—better carrier selection, improved rate shopping, automated freight audit, delivery tracking visibility. These improvements reduce freight costs and enhance customer service regardless of your warehouse sophistication.
That said, warehouse management system (WMS) capabilities enhance TMS effectiveness significantly. WMS provides accurate, real-time inventory positions that enable better transport planning—the TMS knows precisely what inventory is available at each depot for order allocation and shipment consolidation. WMS-driven picking efficiency ensures orders are ready when carriers arrive for pickup, improving on-time dispatch performance.
Many operators implement in phases: ERP and TMS first to gain transport efficiency, then add WMS capabilities later to optimise warehouse operations and further improve end-to-end delivery performance. The integrated platform makes this phased approach straightforward—WMS modules connect to the same ERP and TMS foundation.
Can NetSuite integrate with our preferred carriers and TMS platforms?
Yes. NetSuite is designed with integration capabilities that connect to third-party logistics providers and TMS platforms commonly used in the NZ market. The platform includes pre-built integrations for major carriers and supports custom integration via APIs for specialised carrier relationships or proprietary TMS systems.
This flexibility means you can implement NetSuite ERP whilst preserving transport management tools that work well for your operation. The integration ensures that order data, inventory positions and customer requirements flow from NetSuite to your TMS, whilst shipment tracking, delivery confirmations and freight costs flow back to NetSuite for financial processing and customer visibility.
For operators without an existing TMS, NetSuite includes native transportation management functionality that handles carrier selection, rate shopping, shipment tracking and freight audit for many operations without requiring separate TMS software.
How long does TMS and ERP integration typically take?
Implementation timelines vary based on complexity—number of carriers, rating sophistication, custom workflows—but most operators complete TMS and ERP integration within 2-4 months. The process includes:
- Carrier connection setup and rate table loading (2-4 weeks)
- Order-to-shipment workflow configuration (2-3 weeks)
- Freight audit and cost allocation setup (1-2 weeks)
- User training and parallel testing (2-3 weeks)
- Go-live and stabilisation (1-2 weeks)
Phased implementation is common: start with primary carriers and main freight lanes, prove the workflows, then extend to additional carriers and specialised services. This minimises risk whilst delivering early freight management benefits.
The Integrated Advantage
Transport management shouldn't be an island of data and processes disconnected from the rest of your operation. When freight planning happens without visibility to inventory positions, customer requirements and real-time order status, you're making sub-optimal decisions that cost money and disappoint customers.
When freight costs take weeks to flow from carrier invoices through manual audit and reconciliation into financial systems, you're managing the business on incomplete data, unable to understand true customer profitability or landed costs.
When shipment tracking lives in carrier portals and email updates rather than integrated with your order management system, customer service teams waste time gathering information and customers lack the self-service visibility they expect.
Integration between TMS and ERP solves all of this—creating a unified flow from customer order through transport execution to delivery confirmation and freight settlement. The operational benefits (better carrier selection, improved consolidation, faster exception management) combine with financial benefits (accelerated billing, accurate cost allocation, reduced audit effort) to deliver measurable improvements in both cost efficiency and customer service.
For New Zealand logistics operators managing the complexity of inter-island networks, regional distribution and variable lead times, integrated systems aren't a luxury—they're becoming table stakes for competitive operations.
Connect Your Transport to Your Business
Project Salsa specialises in helping New Zealand transport and logistics operators implement NetSuite with integrated transport management—designed around NZ carriers, regional networks and the specific requirements of operating in our market.
Our team understands both the transport planning challenges you face daily and the technical integration requirements to connect TMS and ERP effectively. We'll work with you to blueprint an implementation that preserves carrier relationships and transport workflows that work well whilst eliminating the manual processes, data silos and system fragmentation that constrain efficiency.
Whether you're implementing NetSuite's native transport functionality or integrating with specialised TMS platforms, our approach is phased and practical—delivering early freight management wins whilst building toward comprehensive integration.
Ready to connect transport planning to the rest of your business? Contact Project Salsa to discuss TMS and ERP integration tailored to your NZ network and carrier relationships.
