What are APIs in Freight and Logistics? Everything You Need to Know

What are APIs in Freight and Logistics? Everything You Need to Know

APIs changed the E-commerce landscape. API integrations digitally automate processes and data across applications to make the flow of information for businesses and customers seamless and instantaneous.

Since Salesforce launched the first widely acknowledged API in 2000, APIs have proliferated to revolutionize how we do business.

From Facebook Messenger, PayPal payment options, to booking a holiday online, you’ve likely used APIs without even realizing it. That’s how fundamental they are to eCommerce and the development and dissemination of information on Web 2.0.

“What are APIs in shipping?”

What are Shipping APIs in Freight and Logistics?

API is an acronym that stands for Application Programming Interface. APIs are generally cloud-based intermediaries that allow applications with different designs and code to exchange data and information with each other.

While there are standard industry integrations that make it easier to share data and information, there are still many Transport Management Systems (TMS) that are independently built in-house.

This presents a challenge as both proprietary and in-house systems aren’t usually built to exchange data. This presents a logistical problem, particularly globally, where big data can be overwhelming for businesses with manual processes.

APIs act as an intermediary between systems to allow them to communicate between businesses and their customers.

How do Ocean Freight and Logistic APIs Work?

APIs are middle-men between applications that are unable to speak to each other.

According to MuleSoft, an easy way to imagine how APIs operate is to think about them as a bilingual waitstaff in a restaurant.

There are customers, a cashier, and chefs. All are independent of each other, and to ensure effective communication between all these parties, waitstaff is required.

Let’s also add another element to this analogy and say all parties speak different languages, and only the waitstaff can speak all three languages.

Waitstaff can communicate orders between customers and chefs, deliver the food, communicate the meal cost, and transact money.

This is essentially how an API operates. They speak the various languages needed to communicate between applications, and what are the correct actions needed to deliver data and a meaningful user-experience.

Without this core element in eCommerce, business would grind to a snail’s pace.

Just like the waitstaff analogy, the  API is the middle-man between customers, freight forwarders, NVOs, carriers, and third-party logistics providers through the Freight Commerce Platform.

The API allows shipper TMS’s to communicate directly with ocean carriers and other partners in shipping. Integration with the Freight Commerce Platform also offers visual displays of real-time data directly from carriers in a user-friendly manner.

Advantages of APIs for Freight and Logistics

Now that we've established that APIs connect business applications, you still might be wondering what the advantages of using APIs for your shipping business are. BBVA outlines some benefits of APIs, and they include:

Automation - APIs create automated workflows that mostly eliminate the need for manual input

Customization - APIs can be personalized to create custom user experiences to match customer expectations

Embedding Functions - APIs can embed content on any website more easily providing a better user experience

Adaptation - APIs have a lot of flexibility to be updated as organizations and processes change

What’s the Difference Between APIs and EDIs in Shipping?

Before jumping into what these two forms of electronic exchanges are, let’s first breakdown what they stand for:

API - Application Programming Interface

EDI - Electronic Data Interchange

First, EDIs and APIs are both used to electronically exchange data and information between enterprises in Shipping. The first commercially used EDI was established in 1975, and shippers, freight forwarders, NVOCCs, ocean carriers, and 3PL providers all utilize them.

While both EDIs and APIs serve the purpose of exchanging data, there are differences between their applications.

EDIs can only transmit data with formats such as ANSI, EDIFACT, TRADACOMS, VDA, XML, or UBL. However, APIs can transmit data between systems and do not need to change their data format, like EDIs, to transmit information

EDIs may not be available for small to medium-size businesses as the cost and time to implement them is significant, while APIs are generally fast and cheaper

EDIs are slowly becoming obsolete and will eventually be replaced with APIs as they’re easier to implement, maintain, and update

Another important difference is that despite APIs being web applications that act as middle-men, they're often marketed as products. API customizability gives businesses the ability to turn something as slow and inefficient as sharing PDFs and Excel documents into a meaningful real-time process that can be viewed instantly online.

EDIs, as useful as they are now, will probably hold you back from realizing your company’s potential to digitalize operations for greater success.

Example of Ocean Shipping API

A contract management solution can use APIs in shipping. These APIs act as aggregators for ocean carrier rates, inventories, and schedules and present all this data to shippers and freight forwarders.

Shippers and BCOs - By connecting their TMS with an API, such as the BlueX Rate Management System, Shippers, and BCOs can directly review rates and book shipments with ocean carriers

Freight Forwarders - These APIs can provide forwarders with customer spot and contract rates in real-time, allowing them to book freight more efficiently in less time

Ocean Carriers - Carriers can instantly relay spot and contract rates and inventory and schedules, without the need for manual data entry, which can delay the dissemination of updates

What to Consider When Designing an API

With so many APIs in the marketplace and industry, simply offering your integration to customers and businesses might not be enough.

While the ocean freight industry was slow to adopt APIs, it won’t be long until enterprises figure out that they can market and treat their API as a product instead of just integrations.

According to IBM, there are three considerations you should think about when designing an API.

API Branding and Positioning - Enterprises need to consider the technical experience of the developers they market to and what their end-user experience wants. Positioning the branding with this in mind is essential

API Awareness Promotions Strategy - With so many competing API solutions in the market, raising awareness among developers is essential for your API's success

Nurture API Lifecycles - You should consistently enhance your service level agreements and testing environments with version upgrades, support, and other operations as your API matures along its life cycle

A final consideration is also to review Digital Container Shipping Association (DCSA) definitions for open source API development. These definitions can aid enterprise APIs to be DCSA standard-compliant in tracking and tracing on for customers.

APIs are what drive online ecosystems. Without them, connecting applications and services would be a nightmare. While EDIs have served their purpose well since the 1970s, freight and logistic APIs in ocean shipping offer an experience to streamline and innovate how we all do business.