With data playing an ever increasing role in supply chain, Eye for Transport teamed up with project44 to explore EDI – a technology that has been a core part of how carriers, shippers and 3PLs transmit and share data since 1970. Why does Freight EDI still exist? Do people in the industry really like it?
EDI may be the current industry default, but it’s old technology that runs data over timers – meaning data isn’t coming to you in real-time, leading to more phone calls and emails to track processes that should be automated, like pulling rate quotes, sending instant dispatch requests to a carrier’s system, tracking freight, and requesting image documentation. Freight EDI is costly to set up and maintain, leads to more headcount, and frequently breaks.
What is EDI or Electronic Data Interchange?
But first, let’s make sure we are all on the same page with what EDI or Electronic Data Interchange is by defining the term. According to EDI Basics:
Electronic Data Interchange (EDI) is the computer-to-computer exchange of business documents in a standard electronic format between business partners.
Now, going further, what is EDI in freight? In our blog post “Electronic Data Interchange or EDI in Transportation: Breaking Down What it is and How It Works””
EDI has become very popular in the haulage and transportation industry as transportation companies and load brokers are adapting their systems to cater for EDI document exchange.
The advantages for those working in the transportation industry is that routine high volume communications can be automated allowing dispatchers and accounts receivables staff more time to focus on more productive/profitable tasks and provide clients with better customer service. One of the main advantages of EDI is that it eliminates a dispatcher from having to manually key information into the dispatch operational and billing system. This results in saving time and money while eliminating any costly data entry mistakes. The other advantage is that transportation companies who are EDI compliant can communicate seamlessly and electronically with all parties in the supply chain process.
We go on talk about the most common EDI transaction codes in the post, so we encourage you to view those to know more.
Now, that gets us to the next point….”IS Freight EDI Dead?”
Is Freight EDI Dead?
As EFT put it in their recent blog post, “Technology has advanced huge amounts since the inaugural roll-out of freight EDI. Today data has become a major value-centre for the supply chain. Does Freight EDI still have what it takes to transfer information effectively with today’s business velocity?”
They asked over 2oo supply chain executives to get their thoughts on whether or not Freight EDI will be able compete with new methods of big data, real-time analytics, and web service APIs. Here’s what they had to say.
Some facts we uncovered on EDI:
- 85% of the industry polled is still using EDI
- 43% of them are frustrated, but of the 57% that aren’t, there is a strong sense that its days are numbered
- 55% are considering web service APIs as an alternative to EDI
You can view the infographic at the bottom of this post. However, if Freight EDI is dead…what are the alternatives?
Alternatives to Freight EDI
The leading alternative to Freight EDI are APIs. APIs, unlike EDI, allow for real time data fetching. This allows for the ability for more consistent tracking of freight shipments and for fetching pricing and notifications of information from carriers more consistently, more accurately, and more quickly.
API is an acronym for “application program interface” and allows different computer systems to communicate with each other. Compared with standard EDI, they provide flexibility and enable a faster, more efficient exchange of electronic documents such as load tenders, shipment status and invoices.
This allows for better communication for all and any parties involved in freight shipping: shippers, carriers, and the 3PLs working with both.
Unfortunately, the industry is still EDI heavy. But, with many 3PLs who are beefing up their technology departments and leading the charge to have more technology efficient platforms, like a transportation management system, APIs look to increase in use in the freight and transportation industries.
In fact, at Cerasis, having had our TMS and technology products all built in house since our founding in 2008, and as a technology-first company, we are leading the charge towards increased use of APIs with our “Cerasis Envoy” project.
Cerasis Envoy is a completely new product we developed to help us improve in two areas: Tracking and Documentation. With a recent update of our core technology product, the Cerasis Rater (which we call releases and roll out a new one every quarter), we focused on tracking. We are pulling tracking from carriers’ web APIs. The tracking data is better than what we receive through EDI and allows us to get tracking information 8-10 hours earlier versus using EDI. An additional added benefit is the ability to track Collect and Third Party shipments. This adds greater flexibility for Cerasis and the carriers, but also allows our shipper customers to receive tracking information more quickly. This then allows our shipper customers to have more confidence in delivery times.
EDI is not going away overnight and is not entirely dead. However, with the rise and comfortability of the use of APIs by companies in all industries, we will see the slower moving transportation industry slowly phase out the use of EDI over the next few years.