Contracts
Forwarding (FMS) Contracts can be used for Customer or Vendor contracts to register freight prices and surcharges that are agreed upon for a longer period of time. In the forwarding documents revenue and cost lines can be calculated based on contracts.
To create a new FMS contract
Choose the
icon that opens the Tell Me feature, enter FMS Contract, and then choose the related link.On the FMS Contracts page, Choose the New action.
In the General FastPane specify the Source Type field with one of the available options: Customer, Customer Price Group, All Customers for Customer contracts, or Vendor, Vendor Price Group or All vendors for Vendor contracts.
In the No. field select a record from the related table. Fill in the Valid-from date and Valid-to date fields to specify the contract validity. The dates will be copied to the Lines when new lines are created.
Learn more about Contract strategy.
Proceed to fill or change fields on the contract card as necessary. Hover over a field to read a short description.
Tip
Instead of creating a contract from scratch, you might want to select an existing contract from the list and copy action and change the required fields and/or rates.
Now you are ready to add the contract lines. Fill the Description, Area Type and Area Code fields.
Learn more about how to setup: Areas and how contract lines are prioritized based on the priority of the Area.
The next step is the creation of detail lines in the Detail Lines FastPane. The Detail lines specify the rate information. Due to the large amount of scenario's which are supported, the detail line has many fields, the most commonly used fields are listed below:
Tip
When creating a new line in the contract use the the Detail card page, where you can find the most needed fields logically grouped in the FastPanes General, Price Settings and Calculation Settings.
When creating large contracts you might want to copy detail line(s) from one line to the other.
Think carefully where to implement surcharges. Surcharges might be implemented on the level of the contract, contract line and in some scenario's even in a seperate contract.
Field Remarks Service No. Select the Service No from the Service table. Service Description The Service Description field is automatically filled with the Description from the Service card, can be overwritten with a contract specific description when needed. Valid From/To Date It is recommended to fill the field: Valid-From-Date with the actual date te contract has started. The Valid-To-Date with a date in the distante future, for example: 31-12-9999. Quantity Calculation Calculation Method to calculate the quantity. Learn more about Quantity Calculations. Price per Quantity The calculated quantity will be divided by this value. The default value of this field is 1. Change the value to 1.000 to implement a price per ton. Base Amount The Base amount is used to calculate the unit price by dividing the Base Amount with the calculated Quantity. This field should only be filled when needed. Min. Amount Fill this field to implement a minimum Line Amount on the resulting Cost or Revenue line. , Max. Amount Fill this field to implement a maximum Line Amount on the resulting Cost or Revenue line. Unit Price The Unit Price is the most commonly used field. Unit Price might be used in combination with Base Amount, Min. and/or Max. Amount. Unit Price Calculation Calcuation method to calculate the Unit Price. Unit price calculations are typically used when a surcharge needs to be calculated based on specific services provided in the Shipment.
Note
Optionally you can implement graduaded pricing. The field Sub Prices Available on the Detail lines page show if Sub prices are available. To add the graduaded prices choose the value and insert the prices on the Contract Lines Page, or open the Detail Line Card page and go to the Lines FastPane.
Chargeable weight and Load meters
In the shipping industry, chargeable weight refers to the weight used to calculate the cost of transporting goods. It is the higher of the actual weight or the volumetric weight of the shipment. The purpose of chargeable weight is to account for the space occupied by the cargo. For example, a shipment of 1.000 kg of feathers has a larger volume than 1.000 kg of lead.
Tarriff factors
Tarriff factors have been agreed upon within the transportation industry, or are mutual agreed between the freight forwarder and the vendor or customer. On a shipment, the Chargeable Weight field will be the filled with the Gross Weight or the Volumetric weight. The highest weight is charged.
Note
The Tarriff Factor can be setup on different entities: Contract (Detail Line/Line/Header), Carrier or Customer, Mode Of Transport and Forwarding Setup. The tariff factor is determined in the sequence of the above-mentioned entities. The system will use the tariff factor specified at the most specific level to calculate the chargeable weight. For example, if a tariff factor is set at the contract detail line level, it will take precedence over the tariff factor set at the carrier or customer level. Similarly, if a tariff factor is set at the mode of transport level, it will override the tariff factor set at the forwarding setup level.
Keep in mind that the highest weight between the gross weight and the volumetric weight will be charged as the chargeable weight. The system will automatically calculate the chargeable weight based on the specified tariff factor and the weight of the shipment.
Different Modes of Transport and Chargeable Weight:
Road Transport: In road transport, chargeable weight is often calculated based on load meters with a factor >of 1750 kg per load meter. Load meters represent the linear meters of cargo space in a truck. The system can calculate >the load meters with a standard load meter factor of 2.4, but it can also be based on the load meter factor specified on >the order type card. For example, a euro pallet (80x120cm) may be considered as 0.4 load meters, while a block pallet >(100x120cm) may be considered as 0.5 load meters.
Air Transport: In air transport, chargeable weight is typically based volumetric weight with a factor of >167 kg per m3.
Ocean Transport: In ocean transport, chargeable weight is typically based volumetric weight with a factor >of 1000 kg per m3. Chargeable weight calculations are typically used for less than container loads (LCL).
Note
Please note some of the fields on the service card are mandatory when posting a Sales or Purchase invoice, such as the Gen. Prod. Posting Group and Vat Prod, Posting group.
Adjust prices
For adjusting prices a wizard is available on the contract card to assist adjusting prices.
Demurrage and Detention calculation
Demurrage This refers to charges from a carrier for the use of the equipment within the port or terminal beyond the free time allowed. Essentially, it's the fee for overstaying in the port. The importer needs to clear and move the cargo within the free time to avoid these charges.
Detention This refers to charges from a carrier importer holds onto the carrier's equipment outside the port or terminal beyond the agreed free period. This fee is for using the container for longer than permitted. It encourages the timely return of the container to ensure it can be reused for other shipments.
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