Merchant & Carrier Haulage in SAP TM 

Hello Dear Readers, 

Welcome to another blog !

Today we will discuss on Merchant & Carrier Haulage in SAP Transportation Management. In a standard Transportation scenario, we have generally three main legs, which are Pre-Carriage, Main Carriage & On Carriage. In most of the cases shipper will organize Pre & Main Carriage and Customer/Consignee will organize for On Carriage.  

Let us take an example, where Customer in Germany sends an order to Consigner/Shipper from India for some raw materials. So, we have three legs here, two legs for road transportation, Shipper’s plant to Nearest Port, & another Destination port to Customer’s place. & Third main leg will be ocean transport from Port in India to Port in Germany. 

Please refer below Figure 1 for more detail. 

As a Shippers perspective we will focus on Pre & Main Carriage, where Main carriage is always performed by the Shipping line and Pre-Carriage transport is flexible. That means either Shipper or Shipping Line can organize this pre carriage transport. If Shipping line contractor also organizes for the pre-carriage along with main carriage, then this scenario is called as Carrier Haulage, & if the pre-carriage is organized by the shipper or shipper further subcontracts it to another carrier then this scenario is called as Merchant Haulage.

 

Let us discuss more about each scenario.

 

Figure 2

  • In Carriage Haulage move both legs are organized by Shipping line.
  • Shipping line contractor will come to Shipper’s door to pick up goods & will deliver to Source port for next move which is Main Carriage.
  • Carrier should also accept any damages or claims raised during this move, if anything goes wrong.
  • Only if it is proved that damage was due to improper packing of materials, then carrier can deny.
  • As both legs are planned by same carrier, there will be ease in communication between Carrier & Shipper throughout the transportation till destination port.
  • Shipper can not negotiate further if this carrier is fixed for pre leg.

Merchant Haulage

Figure 3

  • In Merchant Haulage move shipper organizes Pre-Carriage move.
  • Shipper has a choice to arrange own trucks or negotiate the transport rates with their nominated carrier for pre leg.
  • In this case shipping line does not hold responsible for any damages during the move.
  • Merchant is held responsible if any damage happened during move.
  • Shipper has to communicate with two different party during each move.

 

Thanks for reading this blog.

 

Regards

Vaibhav Suryawanshi

SAP TM Consultant

 

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