You can use execution costs as a basis for settling with your customers or internal organization by transferring distributed costs from the freight side to the forwarding side. You can charge the customer for the total or partial execution charges and the additional charges using the cost pull calculation method. The cost pull calculation method is used in the cost distribution and charge calculation processes.
The cost pull methodology allows costs that occurred on execution documents like freight orders or freight bookings to be used by a forwarding order. In order to do so, the cost distribution must be enabled. If several forwarding orders are consolidated into one freight order, the cost distribution profile distributes the costs. If an agreement is made with the customer that some of the charges incurred by the subcontractor are charged to the customer, the cost pull methodology is used.
You use an instruction type of Cost at item level in the charge calculation sheet. In this case the system automatically includes an internal charge calculation method type. For a cost charge line, you can specify a cost pull strategy based on which the system transfers the results of cost distribution to the forwarding side. Of course, you can insert a markup charge line for a percentage value with reference to the cost charge line or add any other charges in the calculation sheet.
The cost pull methodology offers three different strategies, which you specify in the calculation sheet. Based on the cost pull strategy you specify, the cost charge line appears in the forwarding order with or without standard charge lines. Based on the cost pull strategy, the system can either add the costs and aggregate it in a standard charge line or just copy the costs under the cost charge line or the standard charge line.
You can choose between these strategies:
- Aggregation
The system adds the charges in all the distributed charge lines in the freight order and displays the totals in a standard charge line in the forwarding order.
To configure the aggregated cost pull strategy, a charge line with the instruction type Cost is maintained in the calculation sheet of the forwarding agreement. Since several charge lines of the execution document are consolidated into one charge line on the forwarding order, you must define an informative charge line in the calculation sheet. This charge line is one level lower than the charge line with the instruction type Cost. The lower charge line has the instruction type Standard and defines the charge type that the charge line on the forwarding order must have.
The aggregated charge line is shown on the forwarding order and is transferred by the forwarding settlement document to SD.
- Active Copy
The system copies the individual distributed charge lines in the freight order to the forwarding order under a cost charge line as active charge lines.
The active copy strategy individually copies the costs of the execution document. If several charge lines are used in the freight order, several lines also appear on the forwarding order. You can edit the copied lines on the Charges tab of the forwarding order and the system also uses them by the forwarding settlement document.
The charges of each charge line are distributed according to the cost distribution profile. Each individual charge line is also transferred as individual charge lines from the forwarding settlement document to SD.
- Inactive Copy
The system copies the individual distributed charge lines in the freight order to the forwarding order under a cost charge line as inactive charge lines.
The inactive copy strategy works similarly to the active copy strategy. Again, the charge lines of the execution document are used by the forwarding order. The difference for the inactive copy strategy is that the pulled lines cannot be edited on the Charges tab of the forwarding order. Furthermore, even though they are visible on the forwarding order as individual charge lines, the system transfers only one aggregated charge line for the pulled cost to SD.
Therefore, the charge type for the aggregated, transferred charge line needs to be defined again in the calculation sheet of the forwarding agreement. This is done in the same way as for the aggregated cost pull strategy.
You define which charge lines in the freight order are considered relevant for any of the strategies on the Cost Pull tab page in the calculation sheet.
Furthermore, you can specify the source of the charges to be pulled into the forwarding order. You can select between the following sources:
- From the settlement charge item of the freight order or freight booking
- From the air waybill charge item
- From the Internal Charges tab page of the freight order
- From the Charges tab page and the Internal Charges tab page of the freight order
- From the Internal Charges tab page of the forwarding order to the Charges tab page of the forwarding order
If charges are changed in a freight order or freight booking in a cost pull scenario, the system recalculates the cost pull charges automatically in the relevant forwarding orders.
If the forwarding order is set to In Process, the system recalculates the cost pull charges automatically and updates the invoicing status accordingly. If the forwarding order is Complete, the system reopens the forwarding order before recalculating the cost pull charges and updating the invoicing status. The system then updates the status of the forwarding order in alignment with the invoicing status. That is, if the forwarding order is Completely Invoiced, the status is set to Complete. However, if the forwarding order isn’t completely invoiced, the status is set to In Process.
If the forwarding settlement document already exists, the system can create a new forwarding settlement document to settle the updated charges in the business document.