S/4 HANA Demo Series, SAP TM

S/4 HANA Demo Series: 07 – Leveraging Default Routes for LTL Zone Skipping Scenario in SAP TM: A Canada Border Crossing Use Case

November 3, 2025 , No comments yet

Introduction:

In businesses where customer orders are not in full truckloads, leveraging LTL (or Parcel) carriers becomes essential. To optimize such shipments, understanding the concept of Zone Skipping is critical. Zone skipping is a logistics strategy that consolidates freight and bypasses intermediate carrier zones, resulting in reduced transit times and lower shipping costs. SAP Transportation Management (SAP TM), seamlessly embedded within SAP S/4HANA, offers robust capabilities to manage complex logistics scenarios, including zone skipping—enhancing both operational efficiency and cost-effectiveness

Demo:

To demonstrate the zone skipping capability, this demo utilizes SAP TM’s default route functionality combined with automatic stage splitting. While zone skipping can be implemented through various methods, this example highlights just one possible approach.

The scenario involves three sales orders from a Texas-based plant in the U.S., destined for three separate customers in Canada. Each order is split into two transportation stages:

  • The first stage moves freight via FTL from the U.S. to a consolidation center near the Canadian border in New York.
  • The second stage distributes shipments via LTL from the New York /Canada Border warehouse to the final Canadian destinations.

Even though the demo showcases cross-border logistics, the same strategy is equally applicable to domestic shipments. Planning for both stages—Stage 10 and Stage 20—is handled independently using the Transportation Cockpit and Optimizer. The demo also shows freight settlement and invoice receipt processes for each shipment across different carriers.

Process Flow:

Business benefits:

  • Reduced manual effort via automated default route selection.
  • Cost savings through FTL consolidation to FTZ and optimized LTL distribution.
  • Improved financial transparency with carrier-level cost allocation and invoicing.
  • Streamlined customs handling by minimizing LTL border crossings.

Authors

,

Leave a Reply

Your email address will not be published. Required fields are marked *