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Cost Allocation by Fleet

Question & Answer


Question

Cost Allocation by Fleet

Answer

Cost Allocation by Fleet

You can set up Sterling TMS to allocatethe total shipment and non-shipment costs for a dedicated fleet toall the shipments delivered by that fleet.

To define this allocation strategy set Costs AssessedBy to Fleet on the Edit FreightAllocation Configuration page.

Sterling TMS uses the following process to calculate the chargesfor one fleet billing cycle:

  1. Add up the total linehaul cost for all shipments and non-shipmentlegs in the fleet billing cycle.
  2. Add up the total fuel accessorial charges for all shipments andnon-shipment legs in the fleet billing cycle.
  3. Add up the total accessorial charges for all shipments and non-shipmentlegs in the fleet billing cycle. Sterling TMS excludes accessorialcharges that are assigned to the fleet as shipment-level accessorials.
  4. Compute the total charges from Steps 12 and 3 for the fleetbilling cycle.
  5. Allocate the total charges to all shipments assigned to that fleetbilling cycle based on the Shipment Prorata AllocationMethod you defined in your freight allocation configuration.

For example consider the following fleet billing cycle:

  • There are 100 shipments in the billing cycle.
  • The linehaul charges for all legs in this billing cycle total$8000.
  • The fuel accessorial charges for this billing cycle total $1000.
  • The general accessorial charges which are not assigned to beshipment-level accessorials total $1000.
  • The Shipment Prorata Allocation Method isset to Allocate Evenly. Sterling TMS will allocatethe total fleet costs evenly across the shipments in this billingcycle.

In this example Sterling TMS calculatesthe following charges:

  1. Calculate the total fleet charges as $10000:

    $8000 linehaul+ $1000 fuel charges + $1000 accessorial charges = $10000

  2. Divide the $10000 total charge evenly among the 100 shipmentsin this billing cycle. Sterling TMS allocatesa $100 fleet charge to each shipment:

    $10000 total charge / 100shipments = $100 per shipment


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Document Information

Modified date:
08 December 2018

UID

ibm10755451