Execution-Based Settlement 
Features
As a logistics service provider (LSP) or carrier, you need flexibility in how you settle for the transportation activities you carry out on behalf of your customer. SAP Transportation Management (SAP TM) enables you to settle on the basis of individual forwarding orders as standard. You can also settle on the basis of an execution criteria, such as buyer’s consolidation, route, or trailer unit.
Buyer’s Consolidation
In a buyer’s consolidation scenario, you are an LSP and to keep the transportation costs low for your customer, you consolidate and load the goods from different suppliers with whom your customer has an established business relationship, into one container before the main carriage. This means you pass the full container load (FCL) rate for the main carriage and on-carriage to the customer.
For more information, see Buyer's Consolidation Settlement.
Execution-Based Criteria
You may also need to settle with your customer based on an execution unit such as a trailer unit, or on execution attributes such as the type of vehicle used to provide the service, or on the distance a truck traveled to fulfill the service.
For example, in a route-based settlement business scenario, your customer needs you to pickup goods from multiple locations such as warehouses and distribution centers and deliver the goods to a series of customer locations or retail outlets. Your customer wants to settle with you on the basis of an agreed rate for the full journey your truck makes as it performs the pickup and delivery activities, and not on the basis of the individual forwarding orders that you execute during the journey. You need to use an execution-based settlement criteria to enable this type of settlement.
Settlement Basis in SAP TM
You can specify a settlement basis for route-based and trailer-unit-based scenarios in the Settlement Basis field of an agreement item.
By default, SAP TM uses the information in an individual forwarding order to create forwarding settlement documents. For example, you create a particular forwarding settlement document for a particular forwarding order. Using the settlement basis gives you the flexibility to use different execution criteria to settle with your customers. You can settle based on how you executed the order and not by individual forwarding orders.
The table explains some of the main differences between execution-based settlement and settlement based on individual forwarding orders:
Execution-Based Settlement | Forwarding-Order-Based Settlement | |
|---|---|---|
Settlement item | Execution document such as trailer unit or container | Forwarding order |
Resolution base grouping rule |
| In forwarding order |
Data source (stage and logistics quantities) | Execution document such as freight booking item or trailer unit | As specified in settlement profile |
In execution-based settlement, the system uses the stages from the freight order or trailer unit and not the constituent forwarding orders to calculate the settlement amount. You can settle on the basis of route-based or trailer-unit-based settlement criteria. For more information, see Route-Based Settlement and Trailer-Unit-Based Settlement.
When you specify a resolution base grouping rule in the basic data of a calculation sheet, the grouping rule applies to items in a forwarding order. However, in the execution-based settlement scenario the item is a forwarding order. Therefore, the grouping logic applies across forwarding orders. For more information on the resolution base grouping rule, see Calculation Sheet.
Constraints
You have specified the settings required for forwarding settlements. For more information, see Forwarding Settlement.
You have specified the appropriate settlement basis in the forwarding agreement item.
Example
You have 7 different forwarding orders that you deliver to a customer location on one trailer unit.
If you do not specify Trailer Unit in the Settlement Basis field, by default the system rates and settles each of the 7 forwarding orders individually. If you create a collective settlement for the 7 forwarding orders, the system still bases the settlement on each individual forwarding order. It performs the following tasks:
Rates each of the forwarding orders individually
Creates one forwarding settlement document with each of the 7 forwarding orders specified as a line item in the settlement
In contrast, if you specify Trailer Unit in the Settlement Basis field of the relevant forwarding agreement, you execute the 7 forwarding orders in one trailer unit and you settle with your customer based on a rate for the trailer unit. This rate covers all 7 forwarding orders in the trailer unit.