Transportation Managementadvanced

Carrier Strategy, Performance and Network Collaboration

Key takeaway

Explanation

📌 KEY POINTS
✅ Lowest freight charge is not the only carrier-selection criterion — reliability, lane experience, and acceptance rate matter as much.
⚠️ Compare performance normalized by lane and service type — raw on-time percentage across different lane difficulty is meaningless.
💡 Avoid opaque algorithmic ranking — business owners should understand why a carrier was selected and be able to override with a documented reason.

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▶ 1. WHAT ACTUALLY DRIVES TOTAL COST

Service reliability, lane experience, equipment availability, tender acceptance rate, on-time pickup/delivery, claims

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▶ 2. STRATEGY BY LANE/MODE

Contracted carriers get priority; spot tendering handles overflow
Define a fallback for when a preferred carrier rejects or doesn't respond

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⚠️ 3. NORMALIZE BEFORE COMPARING

A carrier on difficult international lanes shouldn't be compared directly to local parcel service using raw on-time percentage

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▶ 4. FEED PERFORMANCE BACK

Response time, rejection reason, appointment compliance, execution milestone quality → feed into sourcing and rate negotiation

✅ CHECKPOINT: explain why raw on-time percentage can be a misleading carrier metric.

Real project scenario

A cheaper carrier won most tenders but had a high rejection rate and frequent late pickups, causing costly replanning. Adding service and acceptance performance to carrier strategy reduced total disruption.

Common mistakes

Selecting purely by rate.
Comparing carriers across incomparable lanes.
Having no fallback tender strategy.
Ignoring rejection reasons.
Using opaque ranking weights with no business governance.

Best practices

Segment performance by lane/mode.
Include acceptance and execution reliability.
Define fallback carriers.
Keep ranking logic transparent.
Feed collaboration data into sourcing.

Interview angle

Explain how cost, service and tender performance should influence carrier selection.

Practice this lesson

Quick check

1. Scenario — A cheaper carrier won most tenders but had a high rejection rate and frequent late pickups, causing costly replanning. For the lesson "Carrier Strategy, Performance and Network Collaboration", which response shows the strongest architecture and production judgment?

2. In SAP TM tendering configuration, which strategy offers a freight order to one carrier at a time, moving to the next candidate only if the current carrier rejects or the offer times out?

3. In a broadcast (mass) tendering scenario where a freight order is sent simultaneously to multiple carriers, how is the winning carrier determined?

Interview questions

1. You are the senior consultant/architect responsible for Carrier Strategy, Performance and Network Collaboration. The project situation is: A cheaper carrier won most tenders but had a high rejection rate and frequent late pickups, causing costly replanning. How would you assess the design, identify the highest-risk failure modes, and define the evidence required before approving it for production?

Answer it in your own words first, then compare.

2. During hypercare of a migration to embedded TM, legacy carrier business partner IDs used in historical freight orders do not match the partner IDs registered on SAP Business Network for Logistics for the same carriers. How would you address this mapping gap to ensure ongoing carrier collaboration works correctly?

Answer it in your own words first, then compare.

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