April 5, 2022

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. 

on carriage

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.

 

main carriage

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

PRE Carriage

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