Transport management systems (TMS) tend to fall into one of two categories – cloud-based or on-premises. And this distinction boils down to how the software is hosted, paid for, and maintained.
More freight and logistics teams are re-evaluating whether their legacy TMS can keep pace with the industry, and increasingly, the answer points to the cloud. In this blog, we’ll break down the key differences between on-premises and cloud-based TMS, and where the balance of benefits now sits.
What is an on-premises TMS?
A lot of legacy TMS would be classified as on-premises, meaning that it is installed and run on your own servers. As the TMS software sits inside your own data centre, you are responsible for managing security, updates, and the hardware itself. As a result, updates are less frequent as they must be scheduled and tested so you may not have the latest features that some of your competitors have already installed.
Pricing for on-premises TMS can come with a hefty price tag upfront, packaged with ongoing maintenance and support contracts.
Companies opt for on-premises TMS if they want full control over their infrastructure and are prepared to take greater ownership of compliance and maintenance in-house.
What is a cloud-based TMS?
A cloud-based TMS is hosted on the TMS provider’s server, so they handle infrastructure, updates, security, patching and backups. A cloud-based TMS is typically accessed through a web browser with updates being rolled out automatically and continuously.
Pricing is usually a rolling subscription that is billed monthly or annually and typically comes with lower upfront costs.
Companies who want a system that keeps up with their pace of change and rolls out new features automatically choose a cloud-based TMS. More and more transport companies are looking to futureproof – with 68% of new TMS deployments being for cloud-based systems.
What are the benefits of a cloud-based TMS?
Cloud-based TMS are suited to a modern, agile way of working – scaling with your business not holding you back. Below, we list some of the key benefits of a cloud-based TMS.
No waiting for IT for updates
With a cloud-based TMS, you don’t have to rely on your IT team to make the updates – they are done automatically. In the background whilst you are working, no disruption. You don’t have to schedule maintenance windows or submit a ticket to IT to install a patch.
But the most powerful thing is there won’t be version gaps between users. All product updates will be accessible within the software for everyone so you’re not waiting to access a feature that will change the game for you and your team.
Access from anywhere, any device
As a cloud-based TMS is accessed via the internet, it means it can be accessed by your team anywhere. And data is synced live across the system, so you’re always working from the same information.
Previously, on-premises systems stopped at the office door, but planners, drivers, and operation managers can now access everything they need whether they’re on-site, or on the road.
Scale without adding infrastructure
Software is easier to scale than hardware. If you want to add locations, depots, or users to your on-premises TMS, you’d need to request time with the IT team to issue new hardware and licences (usually at a cost).
A cloud-based TMS makes it simple to add new users and assets yourself, so you can get new starters onboarded a lot more efficiently.
Security and backup handled
With a cloud-based TMS, the day-to-day security burden shifts to the vendor. They manage infrastructure security, patching, and monitoring, so you’re not relying on your own IT team to stay ahead of every threat. Cloud-based TMS are often backed by enterprise-grade infrastructure and security standards, with SLAs that commit to uptime targets, plus automated backups if anything does go wrong.
It’s worth noting that your company typically remains responsible for data compliance obligations (like GDPR, CCPA or similar data protection laws) even with a cloud vendor in place — the vendor becomes a processor, but you’re still the data controller.
Make the switch with Qargo
On-premises TMS may still suit a small number of businesses with very specific infrastructure or compliance needs, but for most transport and logistics companies, the balance has tipped firmly toward cloud. Faster implementation, automatic updates, lower upfront cost, and the flexibility to scale without new hardware make cloud-based systems the more practical choice for teams that need to move as fast as the industry does.
“Qargo’s Transport Management System allows us to scale seamlessly as we grow our business.” – Jacobs Transport
Qargo is built cloud-first, so you get all of this by default: continuous updates with no maintenance windows, access from anywhere for planners, drivers, and operations teams, and the ability to scale up as your fleet, depots, or user base grow without waiting on IT or new hardware. If you’re weighing up your next TMS, the question isn’t just cloud vs on-premises — it’s how much time and cost you’re willing to spend maintaining infrastructure instead of running your operation.
Want to find out how to cloud-proof your business with Qargo? Speak to a member of our team.
