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.
- 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.
- 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.
SAP TM Consultant