Calculation of estimated freight costs

For loads and shipments, Freight calculates the estimated freight costs of loads and shipments during load building. For freight order clusters, Freight calculates the estimated freight costs during freight order clustering.

The Freight calculation engine is also used to calculate estimated freight costs for individual order lines of the following types:

Sales order lines
Sales quotation lines
Freight order lines

For information on freight cost revenue calculation for order lines or quotation lines, refer to Freight cost revenue calculation at order line entry. The current topic deals with estimated freight cost calculation during load building and freight order clustering.

The calculation engine is automatically activated when the load building process or the freight order clustering process is carried out.

Note

To enable freight cost calculation, you must select the Transport Costing check box in the Freight Rates and Costs Parameters (fmfrc0100m000) session.

The calculation engine calculates the freight costs of the loads and shipments while they are created by the load building engine, or calculates the freight costs of the freight order clusters during the clustering process.

The freight cost calculation process

For loads and shipments, the calculation engine checks if rating must be based on shipments or loads. If rating must be based on shipments, the calculated costs of the shipments of a load are added to calculate the costs of a load. If rating must be based on loads, the costs of the load are divided by the shipments to arrive at the costs per shipment. For clusters, rating is based on clusters (the calculation engine sees that the rate basis is not shipment or load, and thus bases the rating on clusters). The estimated costs of the freight order cluster are divided over the individual freight order lines based on the setting of the Cost Allocation Based On field in the Freight Rates and Costs Parameters (fmfrc0100m000) session.
The calculation engine determines the rate basis number for the shipment, load, or cluster. If the values defined for the rate basis number match those of the cluster, shipment, or load, the rate basis number is allocated to the cluster, shipment, or load.
The rate basis number and several other shipment, load, or cluster attributes, such as carriers or service levels, are passed on to Pricing, which uses this information to retrieve the appropriate carrier rate. For further information, see Freight rate retrieval.
The costs are calculated with the rate retrieved from Pricing, the travelling distance derived from the ship-from and ship-to addresses, and the total quantities of the goods to be transported.

Freight cost recalculation

In the Freight Rates and Costs Parameters (fmfrc0100m000), the following fields control freight cost recalculation:

To recalculate freight costs for loads, shipments, or clusters after the load building process or the clustering process is carried out, you can activate the calculation process in the Calculate Freight Costs (fmfrc0240m000) session. Recalculation can be useful for various reasons, for example, after a recent change of the rates in the freight rate books. Before you activate the calculation process, you must select the plans, loads, shipments, or freight order clusters for which you want to calculate the estimated freight costs. The Calculate Freight Costs (fmfrc0240m000) session is available on the appropriate menu of the relevant sessions. The calculation engine uses the carrier rates to determine the estimated freight costs.

Reset costs when composing loads and shipments

If you remove the shipment lines from a shipment, or the shipment from a load, LN resets the costs of the load and shipment to 0.00. In such cases, LN does not change the total costs for the relevant plan but redistributes the costs over the loads, shipments, and shipment lines of the plan.

Example

	Costs
Load plan PL110002	100
Load L110003	100
Shipment S110001	50
Shipment S110002	50

If the shipment lines are removed from shipment S110002, the costs of the load plan are as follows:

	Costs
Load plan PL110002	100
Load L110003	100
Shipment S110001	100
Shipment S110002	0.00

This process is separate from freight cost recalculation and is performed whenever a load is emptied of its shipments or the shipment lines are removed from a shipment.