Introduction of SAP TM (Transportation

Management) Generic terminologies

Updated: Dec 8, 2020

SAP TM is a solution to perform all activities connected with physical movement/transportation

of goods from one location to another. When there is demand or customer requirement for any
product then for manufacturing raw material is required and hat need be carried till warehouse as
material will be stored in warehouse and after manufacturing, when there is requirement from
end consumer the material need to be carried to customers place. So in both ways to carry out
seamless goods movement SAP TM( Transportation Management) will play important role.

SAP TM is a part of supply chain management and a standalone application to meet the complex
distribution scenarios. SAP TM focuses on reducing the transport cost and improves efficiency
by improving traceability and visibility for all logistics activities and keeps collaboration and
coordination with all staff levels and functions.

Types Of transportation Management-

1) Internal –
Internal transportation is movement within same premises or warehouse for example if the
material is needed for trial or testing, raw material movement from warehouse to production
area, from production area finished goods movement to the goods issue area.

2) External-

External transportation is supplying material to consumer or movement from one plant to another
or two distribution centers.

Transportation and logistics-

Transportation Management makes big impact in supply chain management as transportation

cost is involved which has direct impact on company profits and material price as well. So in
short movement of material in right place and right time is important.

Transportation Roles-

1) Shipper- Shipper is consigner and who arranges for goods to be shipped. Shipper can be a
company produces the goods or vendor who supplies the raw material.
2) LSP- Logistic Service Providers are executing or actual performing transport. They are third
party and outsourced entities by shippers.

Transportation Relationships-

1) Consignor- Consignor is shipper.

2) Consignee- Consignee is end consumer.

3) Freight forwarders- Freight forwarders collect the requirement from shipper and provide it to
Carriers. Shippers have Freight forwarders contract with them and they arrange the carriers and
they do not possess and any transportation equipment’s.

4) Carriers- Carriers actual transports the goods and possess transportation equipment’s and they
have freight contract with freight forwarders.

Types of transportation-

1) Full truck load (FTL)-

FTL or Full truck load is the transport of goods that fill up the full truck or a partial load
occupying 80 to 90% of the truck. Bulk material mostly transported by this and it is contracted to
one customer also it is faster but expensive.
2) Less than truck load (LTL)-

Less than truck load means transportation with smaller quantities and the material loaded will not
occupy entire space of the truck means when there is need of movement of goods in smaller
batches and quantities then LTL is used.

3) Full container load (FCL)-

Full container load (FCL) is and ocean shipment and in which a cargo occupies full container of
any size and used by a single consignee when there are large amount of goods needed to
transport and booked by a single shipper.

4) Less than container load (LCL)-

Less than container load (LCL) also an ocean shipment but here full capacity of container not
utilized so many small shipments combined together in Cargo means if a Shipper does not have
enough product then the goods loaded along with other shippers goods and moved together.

Types of transportation-

Direct Shipment- Direct shipment is delivery method to pick load from one place and unload or
deliver to customer’s place.
Milk runs- Milk runs is a delivery method to transport the mixed loads from various suppliers to
one customer where loading and unloading takes place at different places.

Partial loads- Partial loads is a delivery method to transport the mixed load and loads from
various suppliers but unloading takes place at final customer only.