API vs. EDI: Why More Logistics Companies Are Opting to Automate

Amanda Bohl | CEO, Primus Solutions

For decades, logistics companies have used EDI (electronic data interchange) 204, 214 and 210 standards to speed up manual processes. However, forward-thinking companies are now recognizing there’s a newer technology with enhanced benefits.

The use of EDI dates back to the 1940s, with the technology becoming more widespread in the 1970s. A computer-to-computer exchange of business documents in a standard electronic format, EDI marked a step forward for logistics companies, allowing them to trade manual processes for digital data exchange. The move toward digitization through EDI has proved invaluable for many businesses, delivering benefits like reductions in costs and errors, better information storage and access, enhanced visibility into orders, and the ability to save data entries in multiple systems thus saving time from manual processes.

But times change, and technology is changing with it. EDI has technical shortfalls and limitations that limit productivity and efficiency, resulting in higher overall costs for providers and shippers. That’s why more companies are turning to application program interfaces (API) to exchange data digitally. In a recent survey, 55% of supply chain executives said they’re currently considering APIs as an alternative to EDIs.

By adopting an API-enabled TMS, 3PLs and brokers can spend less time on administrative tasks and more time on revenue-generating activities. The result? Faster communications between multiple systems and parties, improved efficiency, end-to-end visibility and flexibility, reduction in manual processes (quoting, booking and tracking) and overall profitability. Here are three major advantages of using APIs versus traditional EDI-enabled systems.

1: Faster Exchange of Information

EDI enables business partners to exchange information in designated time schedules—a significant improvement over the cumbersome manual exchanges of the past. But when time is money, speed truly matters. EDI relies on transmission via timers and batch delivery to share data between systems, creating delays that can last up to two hours. For providers anxious to compare quotes or manage shipments, that means human intervention is often needed to manage processes that could otherwise be automated. EDI might have been speedier than in the past, but still fails to match the speed available through newer technologies and the demands of business today.

With APIs, information is available in real time through synchronous integrations, allowing providers to get the most up-to-date rates from carriers, track status and electronic pick up requests, and POD image instantly. That level of automation and efficiency allows teams to work faster and service more clients, without the need to add additional labor or staff. It also serves as a distinct competitive advantage, as logistics providers can connect their own customers to the real-time information they need to run their businesses.

2: Greater Visibility & Flexibility

When comparing EDIs vs. APIs, think of the evolution of watching movies at home. Whereas an EDI might be like a VHS tape, an API is more like a streaming service like Netflix—offering much greater ability, automation and flexibility to connect to the information you need.

With EDI, you can only exchange information that conforms to EDI-specific standards. In contrast, APIs use universal transmission methods, relying on common digital building blocks to help providers connect to virtually any system. By using APIs, both shippers and Logistics Service Providers (LSPs) can service clients and partners more easily without having to wrestle with specific file formats and transmission methods.

3: Less Development Customization & Costs

Unlike EDIs that require custom standards, API segments are simplified and structured in a way that clearly defines how a program will interact with the rest of the software world. APIs can connect data from multiple systems and parties and automate processes with minimal customized segments. These segments are also usually reusable for other systems or similar processes, because it’s built on universal standards. As a result, logistics companies save time as well as resources—allowing them to add additional vendor APIs and connections faster without high costs and invest in more high-value activities that drive business growth and long-term success.

The Future Is Now in API

Gone are the days where you could only rely on an EDI that had the potential to be delayed by transmission errors or clunky, outdated protocol. API is an enhanced, tech-forward alternative to EDI that makes information exchange simple and snappy. An API-enabled TMS helps your business connect to all your partners seamlessly, so supply chains can run smoother and better than ever.           

Amanda Bohl is CEO of Primus Solutions, an API-enabled TMS, allowing logistics providers to rate shop, electronically dispatch, track, POD and invoice while also connecting customers to their data and tools on demand 24/7. Bohl, an industry veteran with more than 20 years of experience leading global software development and customer success teams, holds a deep belief that logistics technology is the key to ensure sustainable growth in the increasingly competitive transportation serservice industry. Contact Amanda at [email protected]

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