Shipper's Consolidation Settlement
In a shipper’s consolidation scenario, you are a logistics service provider (LSP) or carrier and you have a single customer who needs you to ship goods from a single location and deliver them to a number of different locations in a particular country or region.
Your customer needs to consolidate the goods over the pre-carriage and main carriage to optimize the freight cost. As an LSP, you need to settle for the freight cost, including the main carriage cost, with your customer. You transport the goods in one container for the pre-carriage and main carriage, and only separate the goods from the container for on-carriage delivery to the customer’s location. You charge your customer a full container load (FCL) charge for the pre-carriage and main carriage.
Prerequisites
You must specify the following settings to enable the system to settle for charges in a shipper’s consolidation:
SCO
(shipper’s consolidation) in theBuyer's or Shipper's Consolidation
field of the forwarding order on the export sideAn agreement item for shipper’s consolidated transportation for pre-carriage and main carriage. The agreement item includes the following settings:
A calculation sheet for the shipper’s consolidation
SCO
(shipper’s consolidation) in theBuyer's or Shipper's Consolidation
field
Example
In a shipper’s consolidation with an Incoterm of Delivered Duty Paid (DDP)
, the seller (the shipper, your customer) pays for all the transportation costs, including pre-carriage, main carriage, and on-carriage. To enable this, the system makes the shipper, consignee, source location, and destination location information available for each item in the forwarding order.
The concept is illustrated in the following figure and is followed by an explanation:
For an Incoterm of DDP, on the export side, you create one forwarding order with one container item. In the container item, you enter the cargo you collected from the single location that you deliver to different consignees. The system uses the container as the basis for creating the forwarding settlement. The export business unit creates a settlement document on the shipper, for each of the following activities:
Pre-carriage
Main carriage
On-carriage 1 in forwarding order 1 for item 1 in the container
On-carriage 2 in forwarding order 1 for item 2 in the container
On-carriage 3 in forwarding order 1 for item 3 in the container
In the settlement document, the system includes each of the on-carriage stages for the individual cargo items from the forwarding order.
On the import side, the system automatically creates a copy of the forwarding order for each of the on-carriages to the delivery locations. The import business unit creates a forwarding settlement document on the export business unit, for each of the on-carriages as follows:
On-carriage 1 in forwarding order 2
On-carriage 2 in forwarding order 3
On-carriage 3 in forwarding order 4
The system includes each of the individual on-carriage forwarding orders in the settlement document.