Rail Logistics Optimization with SAP TM

Rail freight is one of the primary forms of inventory transportation. It is much faster compared to road freights. However, it poses several logistic challenges regarding the maintenance of the rail cars, schedule arrangements, specific transportation routes and junction stations, etc.

Considering such complications, it is vital to integrate solutions, which will help to establish the process and monitor all the activities within. One such solution is SAP Transportation Management, which offers a range of functions that help optimize rail freight alone or intermodal transportation.

Why Is SAP TM Important for Rail Logistics?

SAP Transportation Management, or SAP TM, is an application that can be implemented into the system of a transportation company or department. It helps to organize, support, and control all the activities related to the physical transportation of goods between the locations. It provides logistics management throughout the whole network, helping to create a risk-resilient supply chain and increase its efficiency at every stage. 

SAP solutions can perform independently, helping to manage and monitor a particular area of the business performance, or can work as one of the units of the whole SAP ecosystem integrated into the business structure. It is always best to define the specific needs and then address them to the companies, which are experienced in SAP integration, like LeverX. They provide their clients with end-to-end services, starting from consulting over the most suitable SAP solutions to implementation and support. 

What Are the Benefits of SAP TM?

Equipment сonsiderations

The choice of equipment is critical for intermodal transportation. As a rule, the entire railcar or container is paid for, letting customers choose the necessary equipment. All the pieces of equipment contain specific details like railcar number, container number, and seal number. These details are entered into the system and stored for further use by third-party logistics (3PL) and Logistics Service providers (LSP). 

This system provides complete visibility to the movements of equipment, piece counts, weight and volume, delays, and hazardous indications, ensuring proper billing. 

Railcar units

Railcar Units in SAP TM are the fundamental building blocks of the system’s logistics monitoring infrastructure. These units encompass detailed descriptions of specific cargoes assigned to railcars. Depending on the order’s specifications, a Railcar Unit can accommodate either a single railcar or multiple railcars, effectively representing the entirety of the transportation unit in both multi-car train and single-car scenarios.

The creation of Railcar Units is typically automated through the Freight Unit Building process, ensuring an efficient and standardized approach. Nevertheless, there is also flexibility for manual creation when needed. Furthermore, it is worth noting that the Freight Unit can generate a standard unit, which can then be manually linked to the Railcar Unit for consolidation purposes.

Railcar Units are pivotal in the seamless execution of freight transportation processes. By leveraging and consolidating data related to each cargo assignment, they contribute to optimizing and enhancing various stages within the freight order lifecycle, ensuring a comprehensive and practical approach to rail transportation management.


SAP TM has to fulfill the requirements related to rail charge management. Rail freight follows a station-to-station rating instead of a typical shipper-to-consignee. It can be reached by creating zones and including the areas serviced by the stations in the zone. 

There are also specific considerations regarding the equipment types and their categories. The charges are defined per car or container, enabling a change of the rating for each piece of equipment. Besides, each order contains the assessorials, which also impact the accuracy of the charge. 

Empty equipment provisioning

SAP TM streamlines equipment logistics management, encompassing the delivery and return processes. When a customer requires empty equipment, SAP TM facilitates the efficient equipment supply. The customer receives the empty unit, loads it as needed, and upon unloading at the delivery location, the equipment is promptly returned to its owner.

The system offers comprehensive equipment tracking capabilities, enabling real-time monitoring individually or within a specific order’s context. This functionality is precious when assessing charges such as detention or demurrage, ensuring accurate billing and cost management.

Utilizing SAP TM optimizes the equipment selection process. It provides crucial information about the closest available equipment or units nearing availability, effectively minimizing unnecessary equipment movements and enhancing overall operational efficiency.

Rail schedules

One of the main challenges to go with Rail Freight is the scheduling. The usage of SAP TM allows coordination of the freight movements, allowing the clients to maintain cutoff time and plan the time of a pick-up from the station. Using SAP TM brings in more control and possibilities for adjusting transportation cycle planning.  

Integration with SAP Extended Warehouse Management (SAP EWM)

Transportation is always connected with warehouses, as they are the consecutive parts of the logistics chain. When SAP Transportation Management and Extended warehouse management SAP EWM are integrated, it creates numerous benefits like:

  • Creating and scheduling freight units for inbound and outbound processes.
  • Planning of start and end time slots.
  • Report on actual warehouse execution and then the loading and transportation execution. 
  • Logistics area and storage management
  • Site Logistics processing

Such an integration will reinforce the control over the end-to-end movements of the goods. 

Integration with SAP Event Management (SAP EM)

SAP Event Management is an application solution that provides visibility into the logistic process, including planning and transportation execution. It helps to map, control, and check all the processes within the logistics chain. 

The visibility of how the transportation is performed lets all the participants (transportation dispatcher, shipper, or a sold-to party) receive timely tracking details and monitor all the events. The tracking is based on the freight units, orders, bookings, and transportation units. 

The Bottom Line

Rail logistics is beneficial in many ways but presents numerous complications. A leading SAP implementation company, LeverX recognizes all the transportation issues and helps to address them by integrating SAP TM into the logistics chain. 

SAP TM offers extensive functionality, which will leverage the whole process of goods movement, enhance customer satisfaction, and thus improve the company’s overall performance.

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