TMS ERP integration connects your transportation management system with your enterprise resource planning platform so that freight data, financial records, and order information flow automatically between them. Instead of rekeying shipment details into your ERP or reconciling carrier invoices against purchase orders by hand, the two systems share data in real time. The result: fewer errors, faster billing cycles, and a single source of truth for logistics and finance teams alike.

That sounds straightforward, and conceptually it is. But in practice, most mid-market and enterprise shippers run into friction because their TMS and ERP were never designed to talk to each other out of the box. Understanding where that friction comes from, and how to resolve it, is what separates a productive integration from one that creates more work than it saves.

What Is TMS ERP Integration?

A transportation management system (TMS) handles the operational side of freight: rating and quoting shipments, tendering loads to carriers, tracking deliveries, and auditing freight invoices. An enterprise resource planning (ERP) system manages broader business functions like finance, procurement, inventory, and order management.

TMS ERP integration is the data bridge between these two systems. When a sales order is created in your ERP, the integration passes that order to the TMS for shipping execution. When the TMS completes a shipment and processes the carrier invoice, it sends the freight cost and proof of delivery data back to the ERP for accounts payable and general ledger coding.

Without this bridge, logistics teams end up manually exporting spreadsheets, copying tracking numbers between tabs, and chasing down cost discrepancies that could have been caught automatically.

Why Do Supply Chain Teams Need TMS and ERP Connected?

The short answer: disconnected systems create duplicate work, stale data, and costly mistakes. Here is what that looks like in practice.

Manual Data Entry Multiplies Errors

When your TMS and ERP are not integrated, someone on your team is manually entering shipment data into both systems. Every manual keystroke is a chance for a transposed digit, a mismatched PO number, or a freight charge posted to the wrong GL code. At scale (hundreds or thousands of shipments per month), even a small error rate compounds into significant financial exposure. Freight invoice discrepancies of 1 to 5% are common in operations that rely on manual reconciliation [VERIFY].

Decisions Lag Behind Reality

Finance needs freight accruals to close the books. Operations needs to know whether a shipment picked up on time. Customer service needs delivery confirmation to resolve a claim. If each team has to wait for someone to pull a report from one system and email it to another, decisions are always based on yesterday's data, or last week's.

An integrated TMS and ERP gives each stakeholder access to the same shipment and cost data as it happens, not after someone gets around to updating a spreadsheet.

Freight Costs Hide in the Gaps

One of the most expensive consequences of disconnected systems is poor cost visibility. When freight spend lives in the TMS but budget tracking lives in the ERP, it is difficult to answer basic questions: Are we over budget on a particular lane? Did that carrier rate increase actually flow through to our invoices? Is our cost per unit trending up or down?

Without integration, these questions require ad hoc analysis. With integration, they can be answered from a dashboard in minutes.

How Does TMS ERP Integration Actually Work?

The mechanics vary depending on the systems involved, but most integrations follow a common pattern.

Data Flows and Trigger Points

The integration maps specific events in one system to actions in the other. Common trigger points include:

• Order creation (ERP to TMS): A new sales order or purchase order in the ERP triggers a shipment request in the TMS, pre-populated with item details, ship-to address, and required delivery date.
• Shipment execution (TMS to ERP): Once a carrier is selected and a load is tendered, the TMS sends shipment confirmation, carrier details, and tracking information back to the ERP.
• Invoice and payment (TMS to ERP): After the freight invoice is audited in the TMS, the approved amount and GL coding are posted to the ERP's accounts payable module.
• Proof of delivery (TMS to ERP): Delivery confirmation and any exception data (shortages, damages, late delivery) flow back to the ERP for customer service and claims processing.

Integration Methods

Most TMS ERP integrations use one of three approaches:

API-based integration is the most flexible and real-time option. Both systems expose APIs, and a middleware layer (or direct connection) maps data fields between them. This is the standard for modern cloud-based TMS platforms.

EDI (Electronic Data Interchange) uses standardized document formats (like 204, 210, and 214 transaction sets) to exchange shipment and billing data. EDI is well established in freight but can be slower and less flexible than API connections.

File-based integration (flat files, CSV, or XML exports) is the simplest approach but also the most fragile. It works for low-volume operations but introduces lag and requires someone to monitor for failed transfers.

The right method depends on your systems, data volume, and how close to real time you need the data. Many shippers use a combination: APIs for high-priority, time-sensitive data and EDI or file transfers for batch processes like weekly freight accruals.

What Should You Look for in a TMS That Integrates With Your ERP?

Not all TMS platforms treat ERP integration the same way. Some charge significant fees for each connector. Others offer only basic, one-directional data feeds. When evaluating a TMS for integration capability, focus on these areas.

Pre-Built Connectors vs. Custom Development

A TMS with pre-built connectors for major ERPs (SAP, Oracle NetSuite, Microsoft Dynamics 365, Sage, and others) will get you to production faster and with less risk than a custom-built integration. Ask how many live integrations the vendor has with your specific ERP, not just whether they "support" it.

Bidirectional Data Flow

One-way integrations (ERP pushes orders to TMS, full stop) only solve half the problem. You need freight costs, delivery status, and exception data flowing back to the ERP automatically. Confirm that the integration supports bidirectional data exchange across the full shipment lifecycle.

Configurability Without Heavy IT Involvement

Your business rules will change: new GL codes, new carrier payment terms, different approval workflows. The integration should allow your logistics or finance team to update mapping rules and field configurations without filing an IT ticket every time.

Onboarding and Ongoing Support

Integration is not a "set it and forget it" project. Data formats change, ERP upgrades can break field mappings, and new business requirements emerge. Look for a TMS provider that assigns dedicated support for integration issues, not just a help desk queue.

Owlery, for example, provides pre-built integrations with ERPs like SAP, Oracle NetSuite, Microsoft D365, and Sage, along with WMS and OMS connections, and pairs them with a dedicated onboarding team to configure the integration to each shipper's specific workflows.

Common Pitfalls When Integrating TMS and ERP Systems

Even with the right tools, integration projects can go sideways. Here are the most frequent issues and how to avoid them.

Treating Integration as a One-Time IT Project

The initial setup is just the beginning. You need ongoing monitoring to catch sync failures, data mapping changes when either system updates, and periodic reviews to ensure the integration still reflects your current processes. Assign clear ownership (a person or team, not "IT in general") for the health of the integration.

Ignoring Data Governance

If your ERP has inconsistent item codes, duplicate customer records, or mismatched unit-of-measure fields, those problems will flow straight into your TMS. Clean your master data before you integrate, or you will spend months troubleshooting issues that have nothing to do with the integration itself.

Overcomplicating the Initial Scope

Start with the core data flows (orders in, freight costs out, shipment status updates) and add complexity once those are stable. Trying to integrate every edge case and exception handling rule from day one is a reliable way to delay go-live by months.

FAQ

What is TMS ERP integration?

TMS ERP integration is the automated data connection between a transportation management system and an enterprise resource planning platform. It allows shipment, cost, and order data to flow between the two systems without manual entry, reducing errors and improving visibility for logistics and finance teams.

How long does it take to integrate a TMS with an ERP?

Timeline depends on the systems involved and integration method. Pre-built API connectors can go live in days to weeks. Custom integrations or EDI-based setups may take several weeks to a few months. The biggest variable is usually data cleanup and business rule configuration, not the technical connection itself.

Do I need middleware to connect my TMS and ERP?

Not always. Many modern TMS platforms offer direct API integrations with major ERPs. Middleware (like an integration platform as a service, or iPaaS) is helpful when you need to connect multiple systems or when your ERP has limited API capabilities.

What data should flow between a TMS and ERP?

At minimum: sales/purchase orders from ERP to TMS, and freight costs, shipment status, tracking information, and proof of delivery from TMS to ERP. More mature integrations also sync inventory levels, GL codes, carrier performance data, and freight accruals.

Can a cloud TMS integrate with an on-premise ERP?

Yes. Most cloud TMS platforms support integration with on-premise ERPs through APIs, EDI, or secure file transfers. The approach may require a middleware layer or VPN connection to bridge the cloud and on-premise environments.