Modern Moves In Logistics: From EDI To API

Logistics providers and partners make their living by navigating complexity in pursuit of efficiency. There’s always a faster route, a smoother transfer, a cheaper process – and that means stitching together a network of global partners who demand surgical coordination.

For the past fifty years in Logistics, EDI (Electronic Data Interchange) has been the crucial go-between ensuring all partners and processes remain in the loop as cargo makes their convoluted journeys from Point A to Point B, C, and D. Like any technology with a half-century of success under its belt, EDI deserves some serious recognition for this:

• Automation of tasks. Before EDI, all shipping transactions leaned on conventional communication: mail, phone calls, fax, and email. A booking from the Far East to the U.S. usually involved a mountain of phone calls – not just for you, but for your carriers and 3PL partners coordinating each leg of the shipment. With EDI, all those manual tasks are automated, eliminating the inefficient order-taking labor of yore.
• Ability to send documents. All orders require official documentation to back them up: confirmation receipts, shipment inventories, vehicle manifests, invoices, payments, etc. EDI is able to transmit these documents, resulting in massive time savings and fewer errors.
• Compatibility with conventional technology. EDI solutions can interface with traditional Accounting and early ERP systems to provide visibility into shipments for Accounting, Customer Service, and Sales.

It’s a persuasive package of benefits, to be sure – but logistics EDIs grew up in the era of linear communication, while modern-day business exists in an era of concurrent communication. One might even say EDI resembles the telephone game we used to play as children, which begs the question: if EDI is the telephone game, what’s the logistics equivalent of a cutting-edge videoconference? The answer is Application Programming Interfaces or APIs.

Benefits of API For Logistics

The expectations EDI originally set have now accelerated to an always-on approach. In a sector that thrives on coordination, it means partners can’t afford to wait for a daisy chain of information to reach them at whatever pace the middlemen dictate.

Furthermore, logistics providers are accountable to numerous stakeholders; they don’t want to rely on information from the previous link in the chain if they can get greater transparency by hearing all the information being shared across partners. These are needs that can only be satisfied by APIs.

• Real-time information. With global manufacturing models that include just-in-time inventories, cargo transportation must perform perfectly to keep supply chains moving at expected efficiencies. APIs provide real-time transactions as opposed to a logistics EDI’s time-based transactions. Customers can book new shipments automatically, based on triggers from inventory management systems. APIs support the ability to contact company systems and external partners to confirm open space on vessels, availability of rail and trucking legs, and automatically check rates across multiple carriers to find the best prices for a customer – all in real time and on-demand. Such granularity allows for system automation, where the APIs themselves can execute decisioning based on status changes.
• Concurrent communication. APIs notify all vested parties when a change takes place. If an ocean carrier is going to be two days late to port, then new rail and trucking legs have to be scheduled. APIs can proactively notify the customer and relevant partners immediately. This constant availability of information allows logistics systems to continuously create new supply chain models and provide forecasts for planning purposes down the chain. Notably, these insights are available 24/7 with APIs.
• Ease of integration. APIs offer quick and easy integration to a spectrum of systems – mobile platforms, cloud platforms, other APIs, etc. Even if the right API doesn’t exist, a custom solution can be built efficiently using the latest tools and processes. The further your integrations go, the more you benefit from the API strengths of speed and concurrency. A customer service rep, corporate web site, mobile app, brick & mortar location and warehouse can all provide the same information in confidence. On the whole, API integrations bring you closer to operating on “one pane of glass.”
• Cost-effectiveness. The web runs on APIs. eCommerce runs on APIs. It follows, then, that the future of logistics runs on APIs. From a holistic perspective, APIs are far less expensive to build and maintain than EDIs in the long run. Modern support structure and monitoring tools make system remediation increasingly automated, whereas the legacy resources required to keep logistics EDI standing will only become harder to find.

Perhaps that final point is the only one that matters. Everyone grows up, and in the world of logistics, that means adopting a higher level of coordination to gain efficiencies and market share in an increasingly complex network.