Modern freight management systems and organizations leverage many technologies to accomplish their goals. Among the most common technologies are APIs and EDIs. While both technologies facilitate communication, they have different advantages and disadvantages.
Not sure which or what the differences are between APIs vs. EDIs? Read on to discover the answers to these questions and more.
What Is an API?
An API or application programming interface is a much newer software medium that allows two different applications to communicate with each other, even if they use different programming languages.
Think of it as an instantaneous translator that lets different software apps communicate, exchange data, or work with each other without a lot of human intervention or custom programming requirements.
Notably, APIs communicate in real-time, whereas EDIs do not. One of the most straightforward examples of ADIs is when you're looking for flights or hotel reservations on Google.
When you see a flight you want to book, Google will use an API for that flight's home website or server to confirm that the information is accurate and, if so, put through your request to book the flight.
What Is an EDI?
EDI, or electronic data interchange, is an older technology that has been popular for freight management since the 1970s.
EDI technology works by establishing connections to a peer-to-peer or P2P network. Then it standardizes data for much larger quantities of physical documents and processes it into electronic formats. It's similar to an electronic logging device or EDL.
EDIs are frequently used for transitioning data from physical financial or shipping records, physical mail, and physical billing invoices into digital forms. Due to its history and reliability, EDI technology is one of the cornerstone tools in the logistics industry.
What Are the Main Differences Between API and EDI?
While API and EDI technologies digitally transmit data, they have several meaningful differences resulting in notable advantages or disadvantages.
Amount of Data
An EDI allows you to translate and format a genuinely massive quantity of data from physical objects like papers, bills, and invoices.
Once correctly set up, an EDI can handle a staggering amount of data, so it's excellent for large, long-term jobs. EDI is also great for ensuring that two systems share the same amount of data. However, APIs also allow you to send a large amount of data, and often faster. An API can accumulate data since it doesn't depend on users manually uploading documents as EDI technology does.
Furthermore, an API can automatically and continually update different systems as new data or upgrades become available. For example, if an EDI takes two hours to upload some data, an API may upload the same data in just minutes, even if it doesn't upload it all at once.
Generally, both tools can work depending on the amount of data you have to transfer. But API tools are better for quickly sending or translating a massive quantity of data, especially when you consider the time you save setting up the technology or handling documents.
Affordability
Unfortunately, EDI is not very cheap. That's because it takes quite a while to synchronize two different systems and train employees, sometimes called EDI specialists, to handle the technology.
Many EDI projects can last for between three and six months. While EDI tech does allow some customization, it requires manual intervention, which adds to the labor costs your business may pay.
Since APIs are much simpler and streamlined, and because they are becoming more common, API technology and systems are cheaper overall. Therefore, your business may benefit from the affordability of ADI technology when sending data between two different platforms or systems.
Security
EDI protocols and technologies offer fantastic privacy settings and very robust security. As a result, confidential information — like shipping records or cargo manifests — can't be hacked or stolen. Why?
Simply put, an EDI opens up a very secure peer-to-peer connection between two different parties. Each party in the connection can only send or receive information after the security setup is finished. Users on either end can control what information is sent and what data is protected.
While most EDIs use peer-to-peer networks or serial links to facilitate this security, some EDI solutions only provide access to predefined, authorized users.
In this way, they can be used to audit paper trails and accurately track the use of documents or data. All in all, EDI is a trustworthy and safe way to transfer sensitive company data from one place to another.
In contrast, APIs are software dependent on the Internet. Because of this constant required connectivity and the resulting lack of inherent security, APIs are much more susceptible to cybersecurity breaches like hacks.
Therefore, freight companies could risk much of their data being compromised if they rely too much on API technology.
Practical Uses
Both API and EDI technology have some benefits regarding practical use cases. For example, APIs allow data to be instantly communicated between two different software platforms or apps.
That's incredibly convenient, especially when you may need to collaborate with many different clients or software platforms in the future.
That said, API technology inherently relies on an Internet connection. Therefore, it is vulnerable to Internet connectivity problems.
EDI technology is widely used and is already an industry standard. It's also extremely accessible, making it among the most practical data transformation tools available to the freight industry.
EDI technology can save businesses hours of manual labor and accomplish all that work in just a fraction of the time.
The Bottom Line
In the end, both APIs and EDIs are critical tools that modern freight management can't do without. But one technology isn't necessarily better than the other. The best transportation providers often use both tech solutions for maximum effect.
That's how we do things at RPM. Our entire process is set up for maximum convenience and efficiency for your business.
We leverage open EDI and APIs for instantaneous and scheduled communications, machine learning, shipment tracking, and other tools to provide you with peace of mind and the logistics support you need.
Contact us today to see how RPM can help your business thrive.
Sources:
What is an API? Application programming interfaces explained | InfoWorld
What is EDI: Electronic Data Interchange? | IBM
What is EDI (Electronic Data Interchange)? | EDIBasics.com
