Executive Briefings

APIs: Let the Transition Begin

Analyst Insight: At the start of 2016, one quest remains unchanged: how to take cost out of the transportation process. The focus on greater efficiencies and visibility is critical for a well performing supply chain. Shippers, 3PLs and carriers need to embrace new data visibility solutions that reduce costs, serve customers more effectively, and improve operating performance for everyone. APIs are one such solution that will continue to gain traction. - Karl B. Manrodt, Professor of Logistics and Supply Chain Management, Georgia College & State University

APIs: Let the Transition Begin

A phrase started in computer programming, APIs, or an application programming interface, is a messaging format used by a program - like a TMS - to communicate with another program. Web service APIs allow for instant, real-time communication from one system to another. APIs are the same technology that brought applications like Uber and Google Maps to smart phones. It's a technology that has transformed industries such as travel, taxis and now transportation. Worldwide Express, Coyote Logistics, MercuryGate, Cargo Chief, CLI and Cargomatic are already starting to integrate APIs (written by companies like project44) into their technology platforms to enhance performance.

With APIs, supply chain transactions such as requesting rates, dispatching a shipment, or tracking a shipment are automatically triggered and answered through the systems. This allows shippers and 3PLs to spend more time on activities that can greatly improve their business. Connectivity gaps inherent in EDI transmissions cause shippers and 3PLs to act on stale or inaccurate information. With cloud-based APIs, the data and information surrounding a shipment is reliable, up-to-date and dynamic, providing supply chains the opportunity to maximize performance and implement proactive strategies.

Borne out of the 1948 Berlin Airlift and refined by the railroads in the 1960s, EDI still has significant gaps in shipment information availability and communicating between shippers, 3PLs and carriers. EDI has been criticized for being difficult to implement, expensive to maintain, and too rigid to work in a dynamic marketplace.

APIs can improve shipper’s operations in two key ways. First, APIs cost far less than EDI, and are much more flexible. The manual management and administrative work required by EDI leads to high maintenance costs and wasted productivity as users spend extra time calling carriers to check on shipments rather than booking more freight. And, if the customer or supplier changes their TMS programs, the APIs are not affected nor do they need to be re-written.

Second, APIs transmit data in nanoseconds, resulting in real-time freight transportation management. Since EDI runs on timers, it can take 30 - 120 minutes for information to be transmitted between parties. Rate quotes, dispatch requests, shipment tracking, and delivery confirmations can be done in real time, eliminating manual intervention.

For carriers, the changes allow for greater flexibility and responsiveness. With APIs, carriers can provide a rate quote immediately, freeing up human resources to other tasks. Pricing tables can be dynamic, and not static, allowing carriers to respond to today’s market conditions. These technological changes set the stage for a dynamic pricing model and ensure that the carrier stays within their ideal capacity band to control costs. Ultimately, these capabilities allow carriers to optimize their network, improve customer satisfaction and grow market share and profits.

The Outlook

In 2016, APIs are moving beyond just enabling supply chains to communicate in a real-time, streamlined way. APIs can enable instantaneous dashboard updates, making advanced, proactive supply chain management possible. With the right type of APIs, possibilities exist to increase margins and improve operations that will never be possible with EDI. Carriers will be able to manage their own capacity and respond to market conditions by dynamically modifying their price to ensure market competitive rates.

A phrase started in computer programming, APIs, or an application programming interface, is a messaging format used by a program - like a TMS - to communicate with another program. Web service APIs allow for instant, real-time communication from one system to another. APIs are the same technology that brought applications like Uber and Google Maps to smart phones. It's a technology that has transformed industries such as travel, taxis and now transportation. Worldwide Express, Coyote Logistics, MercuryGate, Cargo Chief, CLI and Cargomatic are already starting to integrate APIs (written by companies like project44) into their technology platforms to enhance performance.

With APIs, supply chain transactions such as requesting rates, dispatching a shipment, or tracking a shipment are automatically triggered and answered through the systems. This allows shippers and 3PLs to spend more time on activities that can greatly improve their business. Connectivity gaps inherent in EDI transmissions cause shippers and 3PLs to act on stale or inaccurate information. With cloud-based APIs, the data and information surrounding a shipment is reliable, up-to-date and dynamic, providing supply chains the opportunity to maximize performance and implement proactive strategies.

Borne out of the 1948 Berlin Airlift and refined by the railroads in the 1960s, EDI still has significant gaps in shipment information availability and communicating between shippers, 3PLs and carriers. EDI has been criticized for being difficult to implement, expensive to maintain, and too rigid to work in a dynamic marketplace.

APIs can improve shipper’s operations in two key ways. First, APIs cost far less than EDI, and are much more flexible. The manual management and administrative work required by EDI leads to high maintenance costs and wasted productivity as users spend extra time calling carriers to check on shipments rather than booking more freight. And, if the customer or supplier changes their TMS programs, the APIs are not affected nor do they need to be re-written.

Second, APIs transmit data in nanoseconds, resulting in real-time freight transportation management. Since EDI runs on timers, it can take 30 - 120 minutes for information to be transmitted between parties. Rate quotes, dispatch requests, shipment tracking, and delivery confirmations can be done in real time, eliminating manual intervention.

For carriers, the changes allow for greater flexibility and responsiveness. With APIs, carriers can provide a rate quote immediately, freeing up human resources to other tasks. Pricing tables can be dynamic, and not static, allowing carriers to respond to today’s market conditions. These technological changes set the stage for a dynamic pricing model and ensure that the carrier stays within their ideal capacity band to control costs. Ultimately, these capabilities allow carriers to optimize their network, improve customer satisfaction and grow market share and profits.

The Outlook

In 2016, APIs are moving beyond just enabling supply chains to communicate in a real-time, streamlined way. APIs can enable instantaneous dashboard updates, making advanced, proactive supply chain management possible. With the right type of APIs, possibilities exist to increase margins and improve operations that will never be possible with EDI. Carriers will be able to manage their own capacity and respond to market conditions by dynamically modifying their price to ensure market competitive rates.

APIs: Let the Transition Begin