Hello Anand,
Check if you have maintained following customization setting...
APO-->TP/VS-->Basic Setting-->Maintain Transportation-Relevant Hierarchy
In this Customizing activity, you assign transportation zone hierarchies and transportation service provider hierarchies, and you also define the application component for which these assignments are to be valid. In this way, you can assign a special function to the hierarchies that you defined previously in Customizing. This assignment only involves hierarchies and not generated hierarchies. The hierarchies that are available for selection for transportation zones or transportation service providers are defined as location hierarchies.
Regards
Abhishek