EDI, which stands for Electronic Data Interchange, is a common way freight carriers, brokers, transportation management systems, and shippers transmit shipping data to one another. While other technologies have continued to become more sophisticated with the advent of the internet, EDI technology hasn't been updated since it was originally refined in the 1970's. This means that it's incredibly outdated, unreliable, and inefficient.
We have a saying here at Freightview: if you see a TMS that relies on EDI, run the other way. EDI is like relying on a dial-up connection in a world with high-speed internet. So... How exactly can using outdated technology like EDI affect your shipping process?
Slow systems means missed pickups.
While software that relies on EDI may appear to be dispatching your shipments and scheduling your pickups instantly, the EDI technology that handles that on the back-end is so slow that your pickup may never be successfully scheduled.
EDI forwards data on a timer. When you schedule a pickup on an EDI platform, the data is stored for anywhere from a half hour to four hours before it is sent off. That means the carrier may not even hear about your pickup for hours, possibly even past your close time. That's bad news for your time-sensitive freight, customers, shipping processes, and peace of mind.
Those rate quotes might not be 100% correct.
Systems that rely on EDI and manual contract-loading can cause major headaches when it comes time to deal with invoicing. The information you're receiving from your carriers as you're quoting your freight is old and potentially outdated due to the length of time it takes for the rate quote data to come back from the carrier behind the scenes. Like this great article in Eye for Transport says,
"Using EDI is like asking a stockbroker to make trades today with yesterday’s paper."
Businesses can't and shouldn't run the risk of depending on a rate quote that may not even be viable anymore.
EDI technology has limited visibility, allowing errors to go undetected.
When EDI data is stored before being sent off, neither party receives any confirmation of a successful transmission. This means there is little visibility into what data is being sent between the shipper, carriers, and the TMS. There are also some aspects of the data that are almost impossible to review, verify, or test. This creates a huge possibility for errors to go undetected, causing issues with your invoices and pickup requests. Many companies that rely on EDI have to build out or purchase whole other software systems that monitor and track EDI transmissions.
EDI-reliant systems often have a lengthy and complicated setup process.
EDI requires a lot of manual tariff loading, meaning setup for TMSes that rely on EDI can take anywhere from three weeks to six months. Some EDI systems require lane-by-lane pricing, where each possible quote in each possible lane has to be manually loaded in advance. The setup process just to run rate quotes can be nightmarishly complicated and drawn-out, fraught with lots of clerical errors and bureaucratic pitfalls as you navigate all your individual carrier contracts.
Maintaining EDI systems requires continuous manual work for shippers, brokers, carriers, and TMS's alike.
Because the rate quote information is often out-of-date, it has to be monitored closely and audited for any billing updates, fuel surcharges, or market fluctuations. Not only does the initial setup process require tons of manual input from the TMS, shippers, and carriers, but also post-implementation there must be tons of checks/reviews/data entry in order to successfully complete basic rate quotes and pickup requests. On top of that, every time an update is made to any of your tariffs, you have to go through the setup process for that carrier all over again. The upkeep for your account will be tedious for you, your carriers, and the TMS, and there are tons of opportunities for errors to arise when there is that much constant upkeep required.
Limited integration options.
Need a TMS that fully integrates rating and dispatching with your ERP, CRM, or shopping cart? TMS's that rely on EDI won't be able to support that. The technology is too inflexible, clunky, and slow to integrate with many other modern systems. Although they can integrate some aspects where possible (though certainly not rating), it would require a lot more IT manpower to build.
EDI systems miss out on key features.
Shipments that are dispatched via EDI are simply sent off into storage, where they sit around for a while until they're bulk transmitted to the carrier. In the meantime, you get nothing in return--no shipping confirmation, pickup numbers, PRO#s, or bills of lading. This means your shipment will be harder to trace, and requires more work on your end.
Technology is supposed to make your job easier, not more complicated. But there's some good news: Freightview's API provides an alternative to the technology of the past. API technology is instant, seamless, quick to set up, and requires almost no maintenance. Sick of dealing with EDI? Try Freightview today to see how easy shipping can be.