SAP S4/HANA – TM Charge Calculation with an Additional Agreement Party

 ntroduction –

In a typical transportation scenario, quite often, there is more than one vendor that provides logistical services for a shipment. For example, a main line-haul Carrier (Ex: JB Hunt, CH Robinson, or CN Rail) and an Additional Agreement Party (Ex: Loading services provider) that provides loading/unloading service for the same shipment.

In SAP TM, the Freight document can have a Carrier and Additional Agreement Parties as Business Partners that are applicable for charge calculation. 

Charges in the Freight document can be calculated at a Header, Item, or Stage level. This setting can be found in the Calculation Profile.

Problem Statement –

When an Additional Agreement Party is used in a Freight document, it calculates charges for the entire Freight document at a Header level.  

If the calculation profile in the system is set at either Stage or Item level, the system recalculates charges for the main Carrier and erases any existing charges. 

This behavior makes it difficult to use an Additional Agreement Party in a Freight document if the calculation level in the profile is at a Stage or Item level.

In the scenario below on S4 version 2020, the calculation profile is set to Stage level according to business requirements.

1. Freight document with a main Carrier and charges calculated at Stage level. This is a typical Rail Freight document with a Rule 11 scenario with 2 charge calculation and invoicing parties.

Before adding an Additional Agreement Party

Stage-level charges for main Carriers

        2. An Additional Agreement Party was added to capture handling and loading fees for the same shipment. The existing charges were recalculated and erased due to a mismatch in the calculation level.

An Additional Agreement Party was added

Charge for main Carriers erased due to calculation at Header level for the entire Freight document

 Reason – 

As highlighted below, until S4 version 2022, if an Additional Agreement Party is included in a Freight document, the system calculates charges for all parties, including the main carrier at a Header level. Hence, any existing charges calculated within the Freight document will recalculate at a Header level and in some cases erase the charges. It would be obvious that any manually entered charges will also disappear.

Behavior explained in SAP help

Solution – 

Due to the above problem in charge calculation with limitations in standard functionality when an Additional Agreement Party is used, I have proposed an alternative of using the Service Order document on S4 version 2022 or lower to capture miscellaneous charges to be paid to parties other than the main carrier. 

There are other limitations of the Service Order document and cost distribution for freight accruals, which will be covered in a separate blog post.

Future – 

SAP has released a new feature in the S4 version 2023 that allows you to control charge calculation level in SPRO config (Basic Functions -> Define General Settings for TM -> select the checkbox Header Level Charge Calc. in Freight document with Add. Agreement Party) when an additional agreement party is used in a Freight document. 

Once the latest version is available, I will be testing the new functionality to confirm if it alleviates the pain of calculating charges with multiple parties in a single Freight document.

Source: https://blogs.sap.com/2024/01/04/charge-calculation-with-an-additional-agreement-party/