Fuel Index based Fuel surcharge calculation

In US and many countries, Government publishes Fuel Index on weekly basis. Fuel rate changes according to the weekly Index rate. Most of the carriers in United states uses this index for Freight charge calculation.

SAP TM has a very good functionality to automatically calculate the Fuel surcharge based on the weekly published Fuel Index.

Advantage of this functionality is that the master data team maintains only a fuel Index rate table based on the weekly published rate index. SAP TM Freight order refers this Index rate table based on the calculation date in freight documents and calculate surcharge accordingly in the Freight documents.

Below are the SAP configuration steps to get this functionality:

Prerequisite:

• Basic configuration of Freight Documents, Freight Settlement documents
• Carrier, Locations and other relevant master data

SAP Configuration Steps:

• Maintain 2 rate tables.
• One Rate table will have Fuel Index.
• Second Rate table will refer Fuel Index rate table to calculate Fuel surcharge.
• Maintain calculation sheet and assign both rates to the Fuel surcharge Charge type.

Configuration Details:

1. Maintain Fuel Index rate table:

Fuel Index rate table can be set for the scale dimension

• Country
• Date

This table will be maintained by business on a weekly basis according to the weekly Index rate :

SAP TM Configuration Path:

NWBC >> Master Data >> Charge Management >>Rate Tables>>Create Rate Table definitions

2. Maintain Fuel surcharge Rate Table:

Fuel surcharge rate table will refer Fuel Index rate. We have used below scale dimension. You may have scale dimension as per Business requirement:

• Carrier
• Fuel Surcharge

SAP TM Configuration Path:

NWBC >> Master Data >> Charge Management >>Rate Tables>>Create Rate Table definitions

3. Create Calculation Sheet:

• Add Fuel surcharge condition type in Calculation sheet
• Fuel surcharge condition will refer 2 rate tables. 1. Index Rate, 2. Fuel surcharge. Rate tables are created above
• Calculation Method Type = C
• Calculation Method = Fuel Surcharge

SAP TM Configuration Path:

NWBC >> Master Data >> Charge Management >>Calculation Sheets>>Create Calculation Sheets

4. Create Freight agreement and assign Calculation sheet to the Agreement.
5. Released Agreement.

The Fuel surcharge settings are ready for calculation of Freight Charges.

Business will maintain the fuel Index rate on a weekly basis.

Once settings are completed and all master data are maintained, Fuel surcharge condition type in the Freight document having carrier using  will determine the Fuel Index rate based on calculation date. and calculate appropriate Fuel surcharge rate.

I hope this blog post will be helpful. Please do not forget to give your feedback and valuable comments.

Regards,

Neeraj