Managing Freight Units from Different Base Processes

Objective

After completing this lesson, you will be able to manage freight units originating from different base processes

Management of Freight Units

Managing Freight Units

When you have created freight units, they can be managed in the Manage Freight Units app. As a transportation manager, you might need to track freight units daily and be aware of any issues, such as planning backlogs and delays. The app contains all the information that you must keep up-to-date on incoming transportation demands (freight units) and to identify any potential problems. The freight units are displayed in a list and, if you select one freight unit, detailed information is shown. Most of the information in a freight unit is display-only, that is, if you must change freight units, you have to change the predecessor document, for example, sales order, from which the freight unit originated.

You can use the Manage Freight Units app to do the following:

  • Search, filter, sort, and group the list of freight units by relevant criteria such as execution block, requested start date, source and destination locations, and planning status.
  • Select freight units and view more detailed information such as the products to be transported and review the dangerous goods status.
  • Create note texts and include attachments.

Selecting a freight unit takes you to a more detailed view. Underneath, you can view details from the freight unit, with links to General Information, Items, Stages, and Block Information taking you directly to that data. For example, under Items, you can view information such as product to be transported, number of pieces, gross weight and volume, and transportation group. The paying company code, which is derived from the sales order, is displayed on the Stages view. Freight units can only be assigned to a freight order if their paying company code matches the procuring company code on the header level of the freight order. In the Document Flow view, you can view the predecessor document of the freight unit, that means the sales order or purchase order on which the freight unit is based, and the successor documents such as the freight order to which the freight unit has been assigned during external planning or planning using the transportation cockpit.

This detailed information enables you to take swift action to remedy any possible issues. For example, if you notice on the header that in the next five days there are several new freight units that were not planned, you can view further details of each unit underneath.

Freight Units from Different Base Processes

How Different Base Processes Impact Transportation processes?

Freight units are not created for their own sake, but always relate to an underlying base process (sales, purchasing, …). This base process to some extent impacts the transportation process.

The base processes can be grouped into outbound, inbound, and stock transfer (outbound and inbound) processes. From a transportation perspective, this defines what part of the transportation process your organization controls. While the planning process is not impacted by this grouping, the execution is impacted.

In an outbound process, for example, transporting materials from your plant or warehouse to your customer, you control the execution at the source location of your transport, because this is your own location in this scenario. You can register events like arrival of the truck, loading begin and end, and departure of the truck. You typically do not know when the transport will arrive at its destination. Likewise, in an inbound process, for example, transporting materials from your supplier to your plant or warehouse, you control the execution at the destination location of your transport, because in this case the destination location represents your own location. In a stock transport process, the transport is between two locations of your organization and therefore, you can exercise control on both source and destination location of the transport.

This level of control influences the status that allows you to confirm freight costs for accrual postings in the freight order or freight booking. In an outbound or stock transfer process, you can confirm freight costs for accrual postings, when the resource of the main carriage has departed. In road transportation, this is the time that the truck has left your premises (and this is reflected in the status of your freight order). In air or sea transports, the corresponding trigger is the departure of the plane from the airport or the departure of the vessel from the port. Thus, for these modes of transport, not the departure from the source location, but only the departure from the source location of the main stage is relevant to confirm freight costs for accrual postings.

In a similar way, this is managed for inbound processes. In inbound processes not the status at the source location of the transport is relevant to confirm freight costs for accrual postings, but the status at the destination location of the transport. For road transportation this is the arrival at the destination, whereas for an air or sea transport this is the arrival at the port of discharge or airport of destination.

Shipping Types

In the predecessor document of a freight unit, for example, in a sales order or purchaser order, you typically define the shipping type. In SAP S/4HANA Cloud Public Edition you can choose between shipping types:

  • 01 - Road
  • 03 - Rail
  • 04 - Sea
  • 05 - Air

The shipping type of the predecessor document is propagated into the freight unit and defines a transportation constraint. This transportation constraint defines the mode of transport for the main carriage of the corresponding freight unit. That means a freight unit with shipping type 05 - Air must be transported by air transport. Obviously, the air transport does not cover the complete transportation chain, because you typically need a road stage from the source location to the airport of departure and another road stage from the airport of arrival to the destination. However, the main-carriage must be by air and not by rail or sea transport in this case.

Thus, the planning and subcontracting process are mode of transport specific based on the shipping type of the predecessor document in the underlying base process.

Advanced Intercompany Processes

In the advanced intercompany processes (Advanced Intercompany Sales (5D2) and Advanced Intercompany Stock Transfer (5HP)) only one freight unit is created across the various predecessor business documents. The following duties have to be differentiated in planning, cost, and risk responsibility:

  • Planning responsibility means that the respective party (shipper, consignee) organizes the transport.

  • Cost responsibility means that the respective party has the obligation to pay the costs of the transport.

  • Risk responsibility describes the duty of taking the risk for the respective transport section.

Therefore, you must define incoterm locations at which these responsibilities are transferred from the shipper to the consignee. Therefore, incoterm handling is harmonized between sales, sourcing and procurement, logistics execution and transportation management.

In transportation management, the incoterm location is first used to create two stages in the freight unit:

  • Source location to incoterm location - responsibility of the selling/procuring organization.
  • Incoterm location to destination location - responsibility of the buying/receiving organization.

The transfer of risk responsibility is known as transfer of control. In the advanced intercompany sales process, internal transfer of control occurs when goods are delivered from the delivering company to the selling company within the same group. External transfer of control occurs when the goods are delivered from the group to the customer. For internal and external transfer of control, there is planned and actual transfer of control. The transfer of control dates and times in the LE delivery are set by TM, based on transportation planning and actual events. You can find the planned and actual internal and external transfer of control dates and times in the Shipment tab in the LE delivery.

The company that's responsible for the freight cost depends on the Incoterms agreed between the respective companies. The procuring company code in the freight order or freight booking is either the delivering, selling, or receiving company according to the logistics stage that is the responsibility of the delivering or selling company, or the receiving company. The posting of allocated freight costs refers to the different documents in the context of the delivering or selling company, or receiving company, and the posting to expenses or material valuation in Financial Accounting based on whether you work in an advanced intercompany sales process or an advanced intercompany stock transfer process.

Log in to track your progress & complete quizzes