Optimizing Rail Logistics with SAP Transportation Management (TM) Solutions

SAP TM and Rail Logistics: Streamlining Equipment and Processes

Introduction to LSP Rail Logistics

The transportation of goods via rail poses unique challenges for logistics service providers (LSPs). Unlike shippers, LSPs must handle the complexities of rating, billing, executing, and tracking orders, as well as equipment provisioning, interline settlement, long haul and work train planning, and event management. SAP TM offers a range of features and functions designed to support these processes throughout their lifecycle.

Equipment Considerations

Equipment selection is critical in the rail and intermodal industry. Customers typically order entire railcars or containers, with the option to select specific types of equipment that carry associated costs. Accurate equipment details, such as railcar and container numbers, seal numbers, commodity information, hazardous indicators, piece count, and weight/volume should be stored for internal tracking purposes and to ensure correct billing.

Railcar Unit in SAP TM

The Railcar Unit is a key object in SAP TM that enables the logistics processing of railcar transportation. It describes the assignment of cargo to a railcar, which can either contain one or many railcars. Railcar Units can be generated automatically, assigned manually, or created via consolidation-type scenarios. Depending on the situation, stages of the Railcar Unit can be planned for one or many Freight Orders. This object provides another level of data to help model rail processes in SAP TM.

Charges and Settlement

Interline settlement can be complex, but SAP TM provides standardized and regulated processes for tendering and settlement with other railroads. Charges can be calculated accurately based on equipment details and assessorials added to an order. Event tracking and traceability are also essential for monitoring progress and addressing any issues during transportation.

Network and Optimizer

SAP TM’s network and optimizer features can handle intricate routing requirements based on zone, location, and equipment type. For instance, on the carload side of the rail business, the source and destination stations are more crucial than the actual pickup and delivery location. On the intermodal side, the shipper and consignee locations determine which ramps the shipment should be routed through. SAP TM’s network and optimizer can satisfy these intricacies and streamline processes accordingly.

Rail Charge Management with SAP TM: A Comprehensive Guide

Rail charge management is a complex task that can be fulfilled efficiently with SAP TM. This article will discuss the different requirements of rail charge management and how SAP TM can help fulfill them.

Charge Management for Rail

Station-to-station rating is one of the major requirements of charge management for rail, and SAP TM is capable of fulfilling this requirement. Using different zones and including the locations serviced by each station in the zone can aid this process. Equipment considerations must also be taken into account, and SAP TM can handle the difference in price between equipment using different types or categories. Charges can be calculated on each individual railcar or container on the order, resulting in an accurate rating for each piece of equipment.

Assessorials and Additional Services

Additional services and assessorials can be charged as needed by adding them to an order. If there is already a known assessorial or service at the time of order entry, charges can be calculated based on the service details, including storage, planned switching, or a tank/container wash. In case of an unplanned assessment, event-based charges can be added automatically, such as demurrage, detention, or re-delivery due to a locked gate.

Interline Settlement

Interline settlement can be paralleled to sub-contracting in SAP TM. The invoices are sent electronically to Railinc using a process call REN (Rate EDI Network) rather than directly to the carrier. Depending on the type of shipment, this can either be based on a Tariff rate or a quoted rate from the carrier. SAP TM’s freight quotation request can be used to gather the estimated charges for the interchange, and a Forwarding Quotation could be generated to provide a rate to another Railroad if they want to interchange with you.

Empty Equipment Provisioning/Return and Triangulation

Transporting empty equipment to and from customers can be challenging, but SAP TM can effectively streamline this process. With its optimization features, SAP TM can help efficiently deliver empty equipment to your customers for loading purposes. Additionally, SAP TM utilizes triangulation to select equipment that is either nearby or will soon be available due to other orders. In doing so, it minimizes unnecessary equipment movement, resulting in a more efficient system.

Rail Schedules

Using schedules can facilitate the planning of which trains should carry a particular order. The schedules within SAP TM help determine the cutoff times for both hazardous and non-hazardous materials, providing a clear picture of when items need to be available at the station to board a train or whether they should wait and board the following day. Additionally, schedules can be utilized to identify which orders should be picked up first from a customer to ensure that they make the cutoff for a train headed towards the intended consignee’s destination. This results in a smoother and more efficient transportation process

Event Tracking

SAP Event Management’s event tracking offers several advantages to customers and internal employees. One benefit is that events can be used to charge customers for assessorials. With order information shared between SAP Transportation Management System and SAP EM, it becomes much easier to compare the requested information provided by the customer to the actual results. This feature helps determine whether an assessorial should be charged or not. Furthermore, the event tracking feature proves helpful in tracking and tracing orders, making it easier to monitor shipments throughout their journey.

Conclusion

“From an LSP’s viewpoint, rail logistics can present various complexities. However, SCM Champs, a leading SAP consulting company, recognizes the importance of streamlining transportation processes and making them more efficient through SAP TM. With its extensive functionality, SAP TM seamlessly handles the added complexity of rail logistics. What sets SAP TM apart from other systems is its rapid response time to changes, allowing it to swiftly re-plan and optimize transportation processes as new information or orders become available.

Additionally, SAP TM can automatically trigger these actions based on internally reported events by the LSP. By incorporating SAP TM into their operations, SCM professionals can better manage rail logistics, enhancing customer satisfaction and driving better business outcomes.