Improved Incoterm Handling in SAP TM

[Michael_Haase]

Dear friends of SAP TM,

We already covered here the topic of incoterm locations in documents of SD/LE/MM and how they are mapped to 'real' location master data objects in SAP TM. And furthermore we talked about the freight unit stage building depending on the incoterm location in this blog post.

Now it's time to give an update as with release SAP S/4HANA oP2022 some new features have been released:

• SAP TM is now able to consider the incoterm version, including those clauses that include incoterm location 2.

• Thereby, in documents of SD/LE/MM now 'real' location master data objects can be maintained replacing the 'free text' with its mapping to 'real' locations.

Let's start with some background…most of you will already be familiar with incoterms and their semantics. Hereby it's important to mention that incoterms have evolved in different versions (2000, 2010, 2020) to cover logistic processes more accurate. Means, clauses have been added and removed. And we now also have clauses where a second incoterm location can be maintained. With that, it can be differentiated better where cost and risk transfer actually happen during a transport.

New features of improved incoterm handling in SAP TM

SAP TM has now been enhanced with the capability to consider the incoterm version and the incoterm location 2 from a predecessor document in SD/LE/MM, where this information can be maintained. And considering the incoterm location 2, an additional setting in the logistics integration profile is now available regarding stage building.

As part of this improved incoterm handling, documents of SD/LE/MM are now enabled to have incoterm locations as 'real' location master data objects. So in logistics integration, the error prone mapping between a 'free text' and the location is not necessary anymore.

Enhancement of logistics integration profile

But let us get into details…starting with the customizing of the logistics integration profile:

Here, the existing settings have been moved to a section called 'Static Stage Building'.

What is new is the option for 'Advanced Stage Building', which means the following:

• Incoterm location 2 is considered here (and only here, not in the Static Stage Building)

• It can be decided whether only planning-relevant stages should be built.

Remark: In a former version of the blog post, here was an example which lead to confusion as it didn't show the system behavior properly. Therefore I removed this example.

So, the accurate consideration of incoterms in regards to incoterm version, incoterm locations 1 and 2 is surely another big step for SAP TM, enhancing the planning capabilities significantly.

Those enhancements are available with release SAP S/4HANA oP2022.

I appreciate any comment or question!

Best regards,

Michael