Today we will discuss Merchant & Carrier Haulage in SAP Transportation Management. Pre-Carriage, Main Carriage, and On-Carriage are generally the three main legs of a standard Transportation scenario. It is common for shippers to arrange Pre and Main Carriage, and customers or consignees to arrange On Carriage.
Let’s consider an example where a customer in Germany places an order with a consigner/shipper located in India for the purchase of some raw materials. This order involves three transportation segments. The first two segments consist of road transportation: one from the shipper’s plant to the nearest port, and the other from the destination port in Germany to the customer’s location. The third and primary segment involves ocean transport, moving the goods from the port in India to the port in Germany.
From a shipper’s perspective, we will focus on Pre & Main Carriage, where Main Carriage is always handled by the shipping line, and Pre-Carriage is flexible. Thus, either the Shipper or Shipping Line can arrange for pre-carriage transportation. If the shipping line contractor also organizes the pre-carriage along with the main carriage, then this scenario is called Carrier Haulage, & if the pre-carriage is organized by the shipper or the shipper further subcontracts it to another carrier then this scenario is called Merchant Haulage.
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.