Transportation cost recharge - billing vendor

[jason_lecky]

Hi Guys,

This is more a design question, however, I would be keen to know if anyone has come across similar requirements or knows of a possible solution. I am not familar with the TM functionality and am unaware if this would meet our exact needs.

Current Setup

We have LE-Transportation configured but do not have Transport management (TM). The business captures all transport planning via shipments and records costs via shipment cost document against the inbound deliveries. All transportation is completed via 3rd party haulage firms, therefore, shipment cost are transferred to MM as a service entry against the forwarding agent and paid by invoice receipt against this PO.

Scenario

The business acts as a transport broker, i.e. plans transport on behalf of 3rd party vendors (material owners), and uses a forwarding agent (haulier) to complete the delivery. The Haulier is paid via service PO from the transfer for the shipping cost, however, currrently the recharge of this cost (plus commission) is manually completed through SD.

Issues

As well as the manual effort in recharging the cost, the business are struggling to track if everything has been recharged correctly and accurately reporting the margin.

Q. Has anyone come across similar requirements? or does anyone know of any functionality that would meet this requirement? or is there functionality within the TM solution?

All thoughts or ideas would be beneficial

Thanks

Jason

[jason_lecky · Accepted solution]

Thanks for your feedback Appa,

Strangely was not aware of the LSP scenario in TM. I have now been able to find some more information regarding TM for LSP (see link below), however, i am still unclear from a technical point of view how the system would charge our vendor.

http://www.sdn.sap.com/irj/scn/go/portal/prtroot/docs/library/uuid/f0c3bf43-5dcf-2f10-fd87-d69ae7df2...

I will possible use this information to question SAP directly on the capibilities of TM in this area.

Thanks

Jason

[Former Member · Accepted solution]

Hi Jason,

If you are looking for a solution to handle "charge to 3P vendor for freight payment" in SAP R/3, there is no standard process to handle that. It appears that you are already handlingit using SD debit memo process. That's probably it. I can't see a better option. I am not sure if it is practically feasible to offset the transportation  costs & commission charges to your vendor on purchase order to vendor instead of doing a separate debit memo in SD. It Ddepends on your company and your vendors overall business process.

If your company is planning to implement TM, I think you can use LSP scenario as explained below. You can refer to SAP documentation on forwarding and freight orders.

1. Your vendor will be your "ordering party (customer) for freight services. So, you have to set up vendor as customer too for handling freight service for your vendor. You can set up forwarding agreement with ordering party for freight & commission.

2. As your internal department is handling the freight, A sales organization & company code which is representing this department should handle the forwarding order. This organization/company code has to use forwarding order to calculate freight & commission and then do forwarding settlement to your ordering party. Your purchase order/inbound delivery could be the driver to initiate forwarding order.

3.Use freight order for the above forwarding order  to execute inbound shipment, calculate and pay freight to carrier (Haulier)

Please note that for a normal inbound scenario, where your company is responsible for inbound transporttaion and freight payment , for example EXW incoterms, you would use a freight order to handle transporttaion and freight payments to Haulier.

But, in this case as your company is actually acting like a freight service provider and collecting freight + commission from vendor, LSP scenario makes sense to me to handle the complate freight process.

Thanks!

Appa

[jason_lecky]

Hi Appa,

Thanks for your update.

This is alot clearer to me now and I have done further search into the FWSD and FSD. I do believe this would meet the business requirements and allow for delivery triggered transportation requests as well. Further reading leads me to believe that this will also cover profitability/ margin in some way as well and the FWSD & FSD will be connected via the forwarding order.

Thanks for your help.

Jason

[jason_lecky]

Hi Murugesh,

Thanks for your response.

When I say recharging I mean recharging the original vendor of the material.

When we order stock from a vendor we can receive it consignment or at a price, however, it is the vendors responsibility to deliver this stock to our warehouse. Part of our internal business acts as a transport broker and thus arranges for the stock to be delivered from the vendor to our warehouse. It is this vendor to who the cost must be recharged.

The trouble we have is in automating this recharge and the link to the original cost required ensure everything has been recharged and to show the internal margin generated from the brokage.

Thanks

Jason

[Former Member]

Hi Jason,

Looks like your scenario is similar to LSP/Carrier scenario. You probably need to set up TM to handle this using a Forwarding order--> freight order process. Use FWO to charge your vendor and use Freight order to pay your carrier. obviously, your internal business unit , who acts as transport broker, is like an LSP.  I am not aware of a process in TM/shipper scenario where you can charge a partner for freight and pay freight to carrier using one freight order. So, LSP scenario is a potential option.

[Former Member]

when you say recharging the cost, do you mean to pass the shipment cost to the customer ?

SAP Library - Transportation (LE-TRA)   - i am sure you might have seen this already, just in case posting the link.

or

Getting a commission from the Haulier since the planning is done by the Broker(business).

This could be modeled something like a discount/credit ( in SAP TM we use the returns field at the purchase order item to get back commission from the carrier, this called as due agent)

regards

Murugesh