API vs. EDI in Logistics: What is the difference?

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3 min. read

Author: Sofija E. Jiotis

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API and EDI, appear to be similar at first sight; both automate business processes, both enable data exchange between disparate systems, both improve efficiency, and both minimize human-related errors. In reality, however, this resemblance is not the case. API (Application Programming Interface) and EDI (Electronic Data Interchange) differ heavily in process, structure, and response time.  

EDI: An Overview -  

EDI exchanges data between companies and computational systems using a middleware server (usually through a FTP or SFTP protocol). It employs a standardized electronic format, automating tasks and eliminating the need for human intervention. EDI was invented in the 1960s to replace manual paperwork with structured electronic documentation.  

In the logistics world, EDI facilitates communication between shippers, carriers, brokers, and 3PLs. The system processes and forwards documents in batches at scheduled intervals. Some everyday EDI transactions include load tenders (204), load tender responses (990), shipment status updates (214), inventory reports, freight invoices (210), and bills of lading.  

Pros and Cons of EDI in TMS Software -  

A TMS system will generate an EDI document using a standardized format, which is then sent through a value-added network (VAN) or directly. The receiving program then processes the message without requiring human input.  

EDI’s primary benefit is that it's highly standardized and structured. This standardization ensures compliance with larger enterprise partners and legacy systems.  

Its limitations, however, may pose challenges for implementation. EDI is not a real-time program, meaning

responses and updates are slower. Documentation is only sent according to the EDI schedule, meaning information may be delayed.  

EDI is also costly to implement and maintain. Setting up an EDI system requires mapping documents to specific formats, aligning document standards with each system and program, testing each integration individually, and troubleshooting the programs that can't integrate. EDI often requires specialized consultants or service providers to start the program. Setting up a single EDI connection between your TMS and a partner can take weeks or even months.  

EDI relies on Value-Added Networks (VANs) to ensure secure transfer of data—these VANs charge per document, per kilobyte, or per transaction. Over time, these fees may add up, especially for high-volume logistics operations. Good news with Amous, you do not have to pay all these fees. It is a flat month fee and connect as many integrations as you want and transfer as many documents as you need.  

This integration may require high maintenance and support costs, regardless of who you work with.. Any time a partner changes their EDI requirements or document structure, a team of EDI specialists will need to re-map, retest, and reformat the entire data exchange structure, interrupting your business and data flow.  

The legacy nature of EDI raises complications in integrating with modern platforms. This lack of flexibility and customizability reduces the ability to adapt to new business requirements and emerging technologies.  

API: An Overview -  

API is a real-time data-exchange interface; allowing two systems to communicate directly over the internet. API’s instant communication between programs allows for greater  operational efficiency and flexibility. Tracking status, dispatcher reports, and documentation are just a click away with API: powering integrations between TMS platforms, route planning software, load boards, carrier systems, customer portals, and more. 

API can instantly pull pricing from multiple carriers, submit shipping directly to a carrier system, receive GPS status updates in real-time, source proof of delivery and invoices, and automatically update systems with delivery data. 

API Pros and Cons -  

API systems are simple and easy to employ. With API, a TMS sends a request to another system, for example, when a user checks a load's GPS status. The carrier's system will then respond immediately with data, which gets processed by the TMS and displayed to the user.  

Real-time communications and updates allow for smoother and more efficient flow of data. This connection eliminates the performance struggles of EDI, enabling rapid adjustment and flexibility.  

With flexibility comes customization. API systems are both customizable and scalable, tailored to meet the exact needs of your business. API is better suited for modern cloud-based platforms, powering your company forward with advanced technology.  

ADD VERIFICATION 

APIs are simple to integrate across multiple platforms. They don't necessitate the VANs, middleware, or complex re-mapping required of EDIs. This structure enables cheaper maintenance costs and no per-transaction charges.  

Conclusion -  

While modern logistics is rapidly adopting API-based integrations, EDI remains a critical part of the logistics technology space. Amous TMS is a cloud-based ecosystem with 180+ integrations, designed to meet the diverse needs of today’s logistics landscape. We fully support and leverage API technology, while also maintaining robust EDI capabilities. Backed by a dedicated team of experienced developers and implementation specialists, Amous eliminates costly delays, slashes integration times, and delivers accurate, actionable data when and where you need it. With a boutique approach, Amous tailors solutions to your business, providing the flexibility to scale with your goals, whatever they may be.