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Freight cost management in SAP

Reduce logistics costs with process transparency

M.ShippingRates

M.ShippingRates is Mercoline's freight cost management solution. Connectors and price inquiry templates are combined with standard SAP functionalities.

Typical processes in freight cost management

The solution at a glance

Freight cost calculation

How much does the 600 lbs pallet to ZIP Code 94117 cost? How much more expensive is an 8:00 a.m. delivery?

  • Determine shipping costs early in the business process and make them available to the customer as a decision-making basis for selecting shipping options
  • Order data is automatically collected and the prices are returned to the webshop.
  • Manual request in SAP system is also possible
  • Depending on the transport service provider, list prices can also be determined which can be quoted to the consignee as the freight rate.

Freight settlement

How much will this parcel cost? Is my freight invoice correct?

  • Import of the price structure of transport service providers
  • The freight rates of the transport service providers can be transferred to the system using templates.
  • Use of data from transport service providers to determine freight costs
  • Data is stored in SAP freight cost documents.
  • Convenient comparison between expected and invoiced freight cost
  • Use of credit memo or ERS procedure possible

Freight cost analysis

Will my parcel service provider comply with the agreed-upon delivery times? How high are my transport volumes to different regions or transport service providers?

Freight cost analysis focuses on two areas: creating a basis for freight cost tendering and LSP valuation.

  • The determination of the actual freight cost volume and the freight costs incurred is often only possible by combining data from several sources, such as the applications and websites of transport service providers with different structures. This results in high costs for the aggregation of data for new freight tenders.  Since all data is available in one system with the use of M.ShippingRates, it is much easier to analyze this data. For example, freight volumes can be broken down by country, region, or appointment service to be used as a basis for tender packages.
  • M.ShippingRates in conjunction with M.TransportCommunicator provides a solid foundation to assess the quality of the LSP by various criteria, for example:
    • Was the delivery on time?
    • Were declared transit time met?
    • Average price (per category or weight)
    • Shipment volumes
    • Weights
    • Reporting depending on the plant, LSP, account numbers, date, country, etc.

Functional basis

  • Utilisation of connectors to directly query the pricing information from the LSP or
  • Import of freight rate tables of the LSP. An import template that can be tailored your needs is part of the solution.
  • LSP-specific connectors to import standard pricing tables of various LSPs

Fully integrated in SAP

Determine the your negotiated freight costs directly within your SAP system. Subsequently, the standard SAP functionality is used for the freight cost billing. Relieve your department by eliminating the time-consuming and error-prone manual control of freight cost line items. The solution is used in dedicated versions for SAP ERP and SAP S/4HANA.

Fully integrated in SAP ERP and SAP S/4HANA

6 tips to reduce freight spending

Benchmark your current freight rates

Determine your cargo volume across all LSPs, for instance regarding Continents / Countries / ZIP codes and service combinations. Determine your major trade lanes. Use the data for your freight tenders. Group the data relevant to your main trade lanes. M.TC provides the data base for these RFQs.
Examples of tender segments are:

  • Parcels Germany
  • Parcels EU
  • Parcels Rest of Europe
  • Parcels North America
  • Express items
  • Total volume of all segments
2

Reduce costs for the LSP

Create LSP-compliant loading lists and routed labels to avoid a relabeling by the carrier. Communicate in the LSP EDI-format and avoid the transmission of xls files, which are also expensive to handle for the LSP.

Example:

M.TC provides a routed label for TNT in addition to the standard label. Avoid relabeling fees and lower your TNT freight rates.

3

Check your minimum order quantities

Check your minimum order quantities and / or minimum order charges to entice customer to increase order sizes.

4

Check how your existing transport insurance covers your parcel shipments

When renegotiating freight rates, exclude insurance terms from the LSP. Alternatively, you change the terms of transport insurance and exclude the parcels from the insurance, using the LSPs insurance.

5

Switch your LSP

M.TransportCommunicator allows an easy change of LSP with minimal training and without new investment in hardware.

Check your packaging materials

Adjust the dimensions to have a better fit to your actual shipments.

Selected project references

Freight cost optimisation at Winkler+Dünnebier

"We save six man-days a month. This means that the investment in the add-on pays for itself within just eight months. We are very satisfied with it, and I don't know of anything comparable at the moment."

Uwe Peine, logistics manager, Winkler+Dünnebier GmbH

Lower costs for shipping at Deutsche Steinzeug

"In the past, IT maintenance was very time-consuming and there was no connection to our SAP system at all. When our customers asked us questions, we had to look in the various programs and search for the associated track & trace data.“
Mario Hoffmann, project manager, Deutsche Steinzeug Cremer & Breuer AG

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