Technical Articles
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:
- 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
- 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
- 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
- Create Freight agreement and assign Calculation sheet to the Agreement.
- 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 usingĀ 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
Thanks Neeraj ,
It's really helpful for me. Its really nice document
Hello Neeraj,
thank you very much for this document.
One question which I am currently facing is, if it is possible to get updates directly from the responsible agencies to update the Rate table automatically?
Have a great day!
Eike
Try Carrier Portal if it helps for your scenario
Are you aware of any functionality similar to this which would allow for performing a similar calculation for the FSC amount which will be charged to the customer on each sales order?
Thanks,
Trey
Freight charges are transportation charges. I do not think in OTC you will find similar functionality. However in LE-TRA you might check if there is anything. Else you might need to do some custom development. Or do calculation in TM and once FSD isĀ posted, transfer charge to Invoice similar like in Shipment cost document.