Applying Freight Charges to Deliveries and Orders

This section discusses how to:

  • Receive freight charges.

  • Apply freight changes to the order level.

Freight charges can be passed from an external third-party freight system or calculated by the internal PeopleSoft freight calculator. In both cases, the freight charges are stored at the delivery level in PeopleSoft and then allocated to the sales orders within the delivery. In this section, how the freight charges are received and added to the delivery ID is discussed. In addition, how manual overrides at the delivery or order level are applied is also discussed.

Image: Receiving freight charges

The following diagram illustrations the receipt of freight amounts from an external third-party freight system or from the internal PeopleSoft freight calculator:

Receiving freight charges

Field or Control

Definition

Internal PeopleSoft Freight Calculator

The internal PeopleSoft freight calculator always returns freight at the delivery level.

External Freight System

The external third-party freight systems could return freight at both the delivery level and the package and shipping container level.

Freight Rollup field

The Freight Rollup field determines which freight charges are picked up and applied to the delivery in the Freight Amount field of the IN_DELIVERY_FRT table. The options are:

  • Delivery: (default) The freight amount calculated at the delivery level by the internal or external system should be stored at the delivery-level in PeopleSoft. This amount is used for billing and costing. This option must be used for the internal PeopleSoft freight calculator.

  • Rollup: (external system only) The freight amounts calculated by the external system at the shipping container and package levels should be summed and stored at the delivery-level in PeopleSoft. This total is used for billing and costing.

  • Default or blank field: The system uses the Freight Rollup value already defined on the delivery.

You can manually set the Freight Rollup field on the Delivery Management Workbench, the Fulfillment Requests process page, or the incoming transaction request using EIPs.

Delivery in PeopleSoft

Based on the value in the Freight Rollup field on the delivery, the freight amount is determined and then stored at the delivery level.

  • If the Freight Rollup field has a value of Delivery, then the delivery-level freight charges returned by the third-party system are stored in the Freight Amount field on the delivery (IN_DELIVERY_FRT) and used for billing and costing.

  • If the Freight Rollup field has a value of Rollup, then the freight charges returned for the shipping container and packaging levels are totaled and stored in the Freight Amount field on the delivery (IN_DELIVERY_FRT). This rolled up total is used for billing and costing.

When you initiate freight calculation (internal or external) from the PeopleSoft Order Management pages or process pages, the system always uses Delivery option for the Freight Rollup field.

For informational purposes, the Freight Audit fields store the freight amounts received from the third-party system regardless of the Freight Rollup field. The Freight Audit fields are not used for billing or costing. The Freight Audit Amount field (FRT_CHRG_AUDIT) on the delivery, on the shipping container, or on the package are used to record any freight amounts coming from the third-party system. These values can be used for reporting or research.

Manual Overrides With the Freight Rollup Field

The following rules apply if you manually override the freight amount on a delivery, order, shipping container, or package:

  • A freight amount override at the shipping container or package level is only applied if the Freight Rollup field has the value of Rollup on the delivery. If the Freight Rollup field has a value of Delivery then your override amounts at the shipping container or package level are stored in information-only fields; the overrides are not used.

  • A freight amount override at the delivery level is always applied regardless of the value in the Freight Rollup field (Rollup or Delivery). The freight amounts returned from the third-party freight provider are stored in the Freight Audit Amount field (FRT_CHRG_AUDIT) on the delivery but the override amount is used for billing and costing.

Once freight charges have been received and applied to the delivery level (in the Freight Amount field of the IN_DELIVERY_FRT table), PeopleSoft immediately allocates the freight charges to each sales order within the delivery. The allocated amounts are stored in the IN_DELIVERY_ORD table by a combination of delivery ID and sales order number. The IN_DELIVERY_ORD table also stores any overrides at the sales order level and any manually entered miscellaneous shipping charges entered in the Shipping/Issues component in PeopleSoft Inventory. If the freight amount for the delivery is recalculated or changed, the system reallocates the freight to the sales order level.

The Freight Charge Method field on the delivery determines how freight charges are allocated to the sales order. All demand lines on the delivery must have the same freight charge method. The Freight Charge Method is a required delivery key for building a delivery. The Freight Charge Method field has four options:

  • Order Quantity: Allocate freight charges based on the item quantity within each demand line.

  • Order Value: Allocate freight charges based on the total price within each demand line. This option is only available when you calculate freight on the quote or sales order using the internal PeopleSoft calculator. Be sure to run the Order Completion (OM_BACKGRND) process to calculate prices before calculating freight.

  • Volume: Allocate freight charges based on the shipping volume within each demand line.

  • Weight: Allocate freight charges based on the shipping weight within each demand line. This option is the only option available if you are using the freight amount from the Fulfillment Workbench, the Shipping Requests process page, the Front End Shipping Requests process page, or the shipping EIP transactions.

For sales order entry defaulting, the Freight Charge Method can be defined within the default hierarchy on the Order Groups page, the customer's General Information - Sold To Options page, and the Buying Agreement Form-Header Terms page. In the default hierarchy, the more specific information overrides the more general information; in this case, a freight charge method defined on a buying agreement overrides a freight charge method on a customer and a freight charge method on the customer would override a freight charge method on the order group. The freight charge method value that is supplied by default to the sales order schedule line can be overridden manually by means of the Order Entry Form-Shipment Schedules: Ship Options 2 page. The freight charge method value on the order schedules lines flows to the delivery ID created for the lines.

Example of Freight Charge Allocation from the Delivery Level to the Sales Order Level

This example reviews the application of freight charges to the sales order level.

Image: Freight charge allocation

The following diagram illustrates the process flow for creating a delivery, calculating the freight charge at the delivery level, and prorating the freight charge to the sales order level.

Freight charge allocation

The freight charge is prorated to the sales order as follows:

  1. Sales order A and sales order B are entered into the system. The Order Completion process runs in the background and assigns lines 1 and 2 of each sales order to delivery ID 001. The third line of sales order B is to be shipped from another warehouse (different PeopleSoft Inventory business unit) and cannot be on the same delivery as the rest of the order.

  2. Freight is calculated for delivery ID 001. Freight can come from the external freight system, the internal PeopleSoft freight calculator, or be an override value that was manually entered. The freight charge of 100.00 USD is stored in the IN_DELIVERY_FRT table.

  3. The freight charge is prorated to the sales order level using the option of Weight in the Freight Charge Method field. The shipping weight for each demand line within the delivery is totaled. The combined shipping weight is 200 pounds as follows:

    Sales Order

    Line Number, Schedule Line, Demand Line

    Shipping Weight

    A

    1/1/1

    10 LBS

    A

    2/1/1

    70 LBS

    B

    1/1/1

    75 LBS

    B

    2/1/1

    45 LBS

    The shipping weight for sales order A is 80 LBS (10 + 70) and the shipping weight for sales order B is 120 LBS (75 + 45). The freight charge of 100 USD is prorated as 40% to sales order A (80 / 200) and 60% to sales order B (120 / 200).

    In the IN_DELIVERY_ORD table, 40 USD (40% of 100) is recorded for delivery ID 001 and sales order A. 60 USD (60% of 100) is recorded for delivery ID 001 and sales order B.

Manual Overrides and Prorating Freight Charges to the Sales Order

Freight charges can be manually overridden at the delivery or sales order level. When allocating the freight charge to the sales order level, the following rules apply:

  • An override at the delivery level is prorated to the sales order level using the Freight Charge Method field on the delivery. This process is the same as if the freight charge was calculated by the internal or external freight systems.

  • An override at the sales order level remains the same. Freight can still be calculated at the delivery-level and any remaining sales orders within the same delivery are assigned their prorated share of the delivery-level freight amount. In this case, the delivery-level freight amount and the sum of the order-level freight amounts will not equal.

    For example, you have one delivery containing two orders (order number 1 and 2). You enter an override freight amount of 10 USD on order number 1 and then send the delivery out to the third-party freight system. The third-party system returns a freight amount for the entire delivery of 100 USD, Assume that without the override, the system would prorate the delivery-level freight amount at 50 percent for each order. However, with the override freight amount of 10 USD on order number 1, the system only applied the prorated freight amount to order number 2. Therefore, order number 1 has the freight amount of 10 USD and order number 2 has the freight amount of 50 USD (half of 100 USD). When the orders are sent to PeopleSoft Billing and PeopleSoft Cost Management, 10 USD and 50 USD are used for costing and billing, totaling 60 USD not 100 USD.

  • On many pages, if freight has already been calculated, then the Freight Amount field can be used to apply an increase or decrease to the freight charge, instead of an override. The system calculates freight charges at the delivery-level, prorates the amount to the sales order level, and then the manual entry in the Freight Amount field is added or subtracted from the sales order freight charge.