Understanding EDI vs. API: Part Two

When it comes to supply chain technology and data, there are two ways of transferring and sharing information – Electronic Data Interchange (EDI) and Application Programming Interface (API). While both methods have the same end-goal, the way they operate (and perform) are quite different. If you haven’t already, catch up on part one of our blog series to learn the structures and functions of EDI and API.

A big difference between EDI and API is timing. Information shared via EDI is processed in batches whereas API data happens in real time. When tracking shipments, real-time data is more accurate and, therefore, more useful in operations. But there are more differences beyond just real-time tracking.

4 Key EDI And API Differences Beyond Real-Time Tracking

EDI and API architectural differences matter. Their contrasting approaches to delivering shipment data mean real advantages — and consequences — for shippers, logistics service providers and carriers.

1. Standardization of Data

Unlike EDI, API governs the type and format of communications that any application can make of an associated program, such as a TMS or carrier network. The API lets you set which information is available and what portions are strictly off limits.

An API can take data from numerous programs and present everything in a normalized view. For example, the format and naming conventions of shipment destinations often vary between systems. APIs can make life much easier for everyone in the supply chain by standardizing this data.

With a little custom code, an API solution can recognize System A’s “Chicago IL,” System B’s “IL-CHI” and System C’s “Chig.IL” as the same location and display “Chicago, Illinois” in the dashboard.

2. Faster, More Reliable Rate Quotes

Obtaining a quote without an API is painful. It can involve long games of phone tag with price verification occurring even after delivery. EDI-based solutions try to remove the manual processes but are often more trouble (and dollars) than they’re worth. Building a quote process on an API foundation offers many advantages over an EDI approach.

API Rate Quote Solutions

  • Instant, accurate and secure rate quotes
  • No more static rate bureaus
  • Real-time rates
  • A billing process that reduces the potential for human error

EDI Technology for Rate Quotes

  • Expensive rate bureaus, databases and IT
  • Large data download
  • Static data causes latency
  • One-time setup takes 3-6 months

For LTL shipments, an API solution can also reduce dependencies on SMC3, facilitate quote and invoice matching, and enable spot freight. EDI will require more development, delays and manual processes to simplify your quoting process.

3. Automated Dispatch

Using technology for dispatch keeps shippers and carriers focused on what matters by eliminating time-consuming tasks. But EDI has made the process cumbersome. An API approach eliminates the headaches of EDI dispatching.

API Dispatch Solutions

  • Immediate connection to dispatch agency
  • Real-time data dispatching
  • Automatic PRO# generation
  • Instant pickup confirmation number

EDI Technology for Dispatch

  • Manual Bills of Lading
  • Database maintenance
  • Unknown PRO#s
  • No pickup confirmation numbers

Many LTL shippers may be skeptical of an API solution if they rely on EDI 204. But API solutions can replace that method while reducing billing errors and manual touchpoints.

4. Future-Proofing and Supporting New Technologies

Infrastructures built for evolving technology ensure your investments last longer. Relying on the cloud and APIs instead of EDI is essential for future-proofing your supply chain visibility software.

Supply chain executives worldwide want to incorporate blockchain into their supply chain. The potential is huge. Blockchain can offer more transparency into product origins, shipment visibility and proof of delivery with fewer third parties needed. While most organizations aren’t ready for this advanced, unalterable audit trail, one thing is clear: Blockchain simply isn’t compatible with EDI.

APIs are already connected to various systems and can easily add information to a blockchain. EDI, on the other hand, is an impossibility because nothing is standardized or real-time. Doubling down on APIs ensures your company is technologically competitive for the foreseeable future.

The Bottom Line: APIs Win in Every Way

API adoption will lower your operating costs and increase your net income. Continued EDI customization and expansion will drive up your costs without providing modern benefits. Switching to an API digital infrastructure allows you to grow customer satisfaction and loyalty – a critical differentiator in any competitive market. Your ability to capture market share quickly will only increase.

At this point, too few companies are pushing an API-first agenda, and they’re leaving money on the table. Supply chain and transportation enterprises must shift their questioning from “should we consider APIs?” to “when will we begin using API connectivity?”

project44’s Advanced Visibility Platform takes an API-first approach, helping you achieve greater visibility and increased performance. Request a demo to learn more.