In a world where supply chains are becoming increasingly complex and customer expectations are higher than ever, efficient logistics is no longer a competitive advantage; it is a necessity. Microsoft Dynamics 365’s Transport Management functionality is a powerful yet often overlooked module that helps businesses streamline, automate, and control their transport operations, whether they manage shipments in-house or rely on external carriers.

If you’re in logistics, operations, or ERP management and unfamiliar with this functionality, now is the time to get introduced.

What Transport Management covers

At its core, Transport Management in Dynamics 365 offers a structured and automated approach to handling the entire transportation process. Built as an extension to Advanced Warehouse Management (WMS), it goes beyond standard delivery setups by offering advanced features such as:

• Route planning: Define and optimize transportation routes across hubs, regions, or postal zones to maximize efficiency and minimize costs.
• Load optimization: Maximize vehicle capacity and reduce costs by intelligently grouping shipments to optimize efficiency and minimize costs.
• Shipment tracking: Monitor transportation in real time and maintain complete visibility into goods in transit.
• Carrier management: Manage shipping contracts, performance, rate agreements, and integrations with global carriers like UPS or FedEx via APIs.
• Freight cost control: Automatically calculates freight rates based on mileage, volume, weight, or zones.
• Invoice Reconciliation: Match invoiced freight charges with agreed terms to avoid discrepancies.

As described by AlfaPeople consultants in a recent interview, “You can go deep into defining fuel indexes, assign costs to specific ledger accounts, and even push transport charges directly into customer-facing sales orders.”

Why it´s more than just a logistics tool

One of the biggest misunderstandings about Transport Management is that it’s simply a shipping tool. It serves as a strategic enabler for companies with complex logistics operations, particularly those operating across multiple warehouses and countries.

Extending Warehouse Management

While Advanced WMS handles warehouse layout, picking, and packing, Transport Management takes over from the moment goods are ready to ship. It adds the intelligence needed to coordinate what happens after goods leave the warehouse, including container management, route assignment, carrier selection, and freight cost allocation. This continuity enables businesses to build an efficient end-to-end supply chain, reducing their reliance on spreadsheets and manual follow-ups.

Is it right for your business?

Transport Management is especially relevant for:

• Companies with multiple warehouses, nationally or internationally.
• Organizations handling inbound and outbound shipments, particularly across borders.
• Businesses use external carriers and require robust cost control or integration.
• Operations managing high shipment volumes, requiring automation and transparency.

For example, one AlfaPeople consultant noted that it’s not necessarily industry-specific. Still, logistics-heavy companies benefit the most, especially those seeking to reduce delivery times, automate workflows, and centralize carrier relationships.

On the other hand, companies with simple warehouse setups or low shipping complexity may not realize the full value, as setup and maintenance require strategic planning and organizational ownership.

How does it differ from the landed cost module?

While both modules deal with logistics and cost control, they serve different purposes:

• Transport Management focuses on shipment planning, execution, and cost control, typically for outbound logistics.
• Landed Cost is more granular and is suited for inbound logistics, especially when dealing with international trade and long lead times (e.g., Ex Works (EXW) orders from overseas suppliers).

An interesting feature of the Landed Cost module is the ability to receive goods “in transit,” which allows companies to post invoices before goods physically arrive, thanks to tools such as dummy warehouses and voyage tracking.

Many organizations choose to use both modules in parallel, depending on the directionality (inbound or outbound) and the level of detail required.

The bottom line

Transport Management in Dynamics 365 offers more than just shipping functionality; it helps structure, automate, and scale logistics operations for long-term efficiency. As one expert put it, “It’s a powerful tool that can help manage global operations and create a high-efficiency shipment structure; both inside and outside the ERP.”

Based on our experience with various D365FO implementation projects, we’ve observed that many companies still underestimate the value of Transport Management in Dynamics 365 Supply Chain Management or believe it’s too complex to implement.

This aligns with recent industry insights. According to Gartner, transportation management systems are increasingly seen as mission-critical platforms that help companies reduce freight spend and improve service levels through better planning and visibility [Gartner TMS Market Guide]. Additionally, research from Supply Chain Dive highlights how companies using advanced TMS solutions report up to 8% transportation cost savings and significantly improved carrier performance [Supply Chain Dive – TMS Value].

And with rising freight costs, new demands for last-mile delivery, and increased pressure to optimize supply chains, having the correct transport management setup could be what sets your operations apart in the years to come.

Contact us to schedule an informal meeting and explore how Transport Management in Dynamics 365 can enhance your logistics strategy.