In a buyer’s consolidation scenario, you are a logistics service provider (LSP) or carrier and your customer regularly buys goods from a number of suppliers in a particular country or region, and needs to transport them to a single location. Your customer needs to keep transportation costs as low as possible and therefore requests you to do a buyer’s consolidation. To enable this, you can consolidate and load the goods from the different suppliers into one container before the main carriage and deliver the consolidated container to the customer’s location. This means you do not charge a less than container load (LCL) rate, and you pass the full container load (FCL) rate for the main carriage and on-carriage to the customer.
You specify the following settings to enable the system to settle for the charges in a buyer’s consolidation:
BCO (buyer’s consolidation) in the Buyer's or Shipper's Consolidation field of the forwarding order on the export side.
An agreement item for buyer’s consolidated transportation for main carriage and on-carriage. The agreement item includes the following settings:
A separate calculation sheet for the buyer’s consolidation
BCO (buyer’s consolidation) in the Buyer's or Shipper's Consolidation field
On the export side, the system bases the settlement charges for main carriage on the information from the freight booking. The freight booking is the execution document and therefore the system settles for a buyer’s consolidation as a variant of an execution-based settlement.
The system tries to find an agreement line item with a BCO (buyer’s consolidation) setting. If it does not find one, it tries to find an agreement line with a shipping type of FCL (full container load). For more information, see Buyer's Consolidation.
The system determines if the Buyer's or Shipper's Consolidation field in the freight booking for the container items has the BCO (buyer’s consolidation) setting. If the setting exists, the system then creates one consolidated settlement for all the forwarding orders in the container item for the main carriage.
In a buyer’s consolidation with an Incoterm of ExWorks (EXW), the consignee pays for all the transportation costs, including pre-carriage, main carriage, and on-carriage.
The concept is illustrated in the following figure, and is followed by an explanation:
For an Incoterm of EXW, on the export side there are multiple forwarding orders with one for each pickup location. The export business unit creates a settlement document that bills the import business unit, for each of the following activities:
Pickup for forwarding order 1
Pickup for forwarding order 2
Pickup for forwarding order 3
Main carriage
The system determines that the container item in the export freight booking has a buyer’s or shipper’s consolidation specification of BCO for all three forwarding orders. The system uses the container information from the export freight booking to create a single forwarding settlement document for the main carriage.
On the import side, the system automatically creates a copy of the forwarding order. This forwarding order contains a reference to the container item for the buyer’s consolidation. The container item contains all the cargo information for the three forwarding orders, including the pickup locations. The import business unit creates a settlement document on the consignee, for each of the following activities:
Pickup for forwarding order sub-items, using the cargo items in the container
Main carriage, using the cargo information for the container item
Delivery to the consignee, using the cargo information for the container item