EDI or Electronic Data Interchange is a network of machines communicating with each other to facilitate coordination between two or more business entities. It is imperative for players in the transportation industry to adapt to this advanced communication technology to work closely with their business partners. One significant difference between an EDI and a regular email server is email based document sharing requires a considerable amount of human intervention while EDI does not.
A protocol can be thought of as a language of communication between two devices. For two machines to communicate with each other through an Electronic Data Interchange, they need to use the same EDI protocol. Freight carriers or transporters that communicate with many different agencies need to support multiple types of protocols so that they can send and receive information to multiple service providers.
Here is a brief application of some of the most popular EDI protocols currently being used in the market:
sFTP – It works quite like a standard FTP except the data being transferred is first encrypted at source and then decrypted at the destination before being processed by a computing device.
AS2 – The IETF or Internet Engineering Task Force developed the AS (Applicability Statement) protocol for secure transmission of files over the internet. It is a reliable messaging system that uses HTTP or HTTPS technology protocol to transfer data over the internet. To add another layer of security, AS2 transfers require that both sides exchange an SSL certificate to initiate data transfer.
ebXML – This protocol allows encrypted data transfer of EDI using XML parsing. It is an effective B2B communication method that enables electronic terminals to communicate with each other securely.
The most commonly used EDI Transaction Sets in the Transportation Industry are:
204 Motor Carrier Load Tender
990 Response to a Load Tender
210 Motor Carrier Freight Details and Invoice
211 Motor Carrier Bill of Lading
212 Motor Carrier Delivery Trailer Manifest
214 Transportation Carrier Shipment Status Message
215 Motor Carrier Pickup Manifest
216 Motor Carrier Shipment Pickup Notification
217 Motor Carrier Loading and Route Guide
820 Payment Order/Remittance Advice
997 Functional Acknowledgment
Advantages of EDI
Here is a list of significant advantages that freight providers can get from incorporating an EDI system in their supply chain:
One of the most significant advantages of using an EDI system is that high volume communication can be easily automated. This allows dispatching staff to focus on essential tasks like preparing management reports. All this increases organizational efficiency and customer satisfaction rate.
Since the automated exchange of data replaces the majority of human intervention, a lot of time and departmental expense is saved for billing and operation units.
EDI compliant organizations can communicate seamlessly and electronically with all parties involved in the supply chain process.
Reducing paper-based communication helps in providing real-time visibility to management about the transportation status of their assets. Besides that, it helps in making quick decisions and can reduce the average turnaround time for any organization.
Transportation companies that want to remain competitive in the 21st-century market place need to incorporate EDI systems at their facilities. This will help them build long-term relationships with their clients and vendors alike.