EDI for carriers and shippers revolutionizes operations for logistics, supply chain, and e-commerce companies. Carrier services are integral to the global goods manufacturing and e-commerce industry. Due to the interconnected nature of logistics and supply chain networks and systems, carriers cannot rely on manual paperwork and documentation at every step without risking errors in data entry, document inconsistencies, and delays.
So, how do some of the world’s largest trucking and carrier companies (FedEx, United Parcel Services (UPS), and DHL) navigate data and document exchange for shipment tracking, freight invoicing, order fulfillment, and proof of delivery? They all use electronic data interchange (EDI) to facilitate seamless, error-free, and timely exchange of logistics and supply chain documents, data, and communications in an electronic format.
How does EDI Streamline Document Handling for Carriers?
Carriers rely on several documents unique to the destination and type of goods involved in the logistics and supply chain processes. In today’s dynamic digital purchases and e-commerce age, the rules and regulations shift drastically, requiring carriers to produce and validate a slew of documents, certificates, approvals, and licenses. The fundamental documents and paperwork involved in the physical movement of cargo by carrier services providers include commercial invoices, bills of ladings, import and export licenses and declarations, origin certificates, certificates of inspection, letters of credit, etc.
EDI saves carriers’ time by facilitating seamless document transfers with buyers, sellers, government authorities, banking firms, and other stakeholders. Timely and consistent communication between trading partners and carriers strengthens relationships and improves operational efficiency and the ability to swiftly respond to carrier demands.
EDI systems automate electronic document exchange and guarantee integrations with manufacturing execution systems, transport management systems, logistics and supply chain platforms, and several other cloud-based tools. Strong integration features ensure that critical data flows through the right channels and systems while providing real-time insights into the movement of goods and cargo.
Let us begin by understanding the scope of EDI transactions in a typical carrier operation.
Common EDI Transactions in Carrier Operations
EDI 204 (Motor Carrier Load Tender)
The EDI 204 is a transaction code for the motor Carrier Load Tender document, which stakeholders like manufacturing companies, retailers, or distribution centers use to request a carrier pick up a shipment.
EDI 214 (Shipment Status Update)
A carrier sends this document to provide real-time updates and status on shipment locations.
EDI 110 (Air Freight Details and Invoice)
EDI 110 provides an overview of air freight billing and charges to shippers, including invoices, billing revisions, past due balances, etc.
EDI 210 (Motor Carrier Freight Details and Invoice)
Motor carriers electronically transfer this document to shippers as a freight invoice for billing and payment processing. It is the last document in the loader-tender-to-invoice stage.
EDI 310 (Freight Receipt and Invoice—Ocean)
The EDI 310 is similar to the EDI 210 Motor Carrier Freight Details and Invoice. An ocean carrier sends it to provide freight billing details and confirm receipt of goods.
EDI 856 (Advance Ship Notice—ASN)
This is also known as an Advance Ship Notice or ASN, which contains all relevant cargo information along with detailed shipment details like shipment number, date, address, purchase order and numbers, and shipment contents and quantity before delivery.
EDI 211 (Bill of Lading)
The EDI 211 allows parties in contract with carriers to provide an electronic bill of lading document for freight movement.
Proof of Delivery (POD)
This document provides digital confirmation of shipment delivery and signatures of important stakeholders.
Challenges of Manual Document Handling
The EDI transactions that we listed above were just a handful from a laundry list of logistical and application chain documents. Even for a moment, if consider running the entire show manually without EDI, carriers along with all the parties involved in the value chain of trade are at significant risk of encountering challenges such as:
- Massive delays in processing shipments due to paperwork.
- Mistakes and inconsistencies in data entry due to human errors, resulting in shipment mismanagement.
- Inability to track shipments and respond to real-time updates.
- Compliance risks due to missing or incorrect documentation.
Limitations of Legacy EDI Systems
EDI systems have been around since the 1970s for a remarkable shift in driving paperless and fax-free commerce and trade transactions. With time, as operational processes grew complex and digital modes of trade evolved, carriers modernized EDI systems built on ANSI X12 and EDIFACT standards. These decades-old EDI systems may run seamlessly but are not free of challenges like:
High maintenance costs and lack of scalability
Legacy EDI requires dedicated servers and network infrastructure that requires frequent upgrades, maintenance, and additional expenses. Moreover, they need custom connectors and additional effort to integrate with enterprise systems, causing scalability challenges.
Limited compatibility with modern cloud-based solutions
Legacy EDI systems lack compatibility with technologies like API or Managed File Transfer. Therefore, they are inefficient in enabling real-time data interchange like modern cloud-native tools and applications.
Slow adaptability to new trading partners and EDI formats
Fewer personnel and talent are adept in legacy technology platforms, making it challenging to support archaic EDI systems.
Security vulnerabilities and data integration challenges
Legacy platforms may need excessive patching, making them more vulnerable to security risks.
How the Right EDI for Carrier Improves Operations
EDI systems account for 75% of B2B sales. EDI transactions help reduce 35% of costs associated with paper printing, postage, storage, and document retrieval. Another industry research revealed that EDI helps businesses curb errors and inconsistency rates by 30%. These numbers represent the potential of the exemplary EDI service guaranteed to improve carrier operations. That means they carry specific advantages like:
Standardization
Modern EDI systems are built on robust technology, and industry-specific standards ensure seamless communication with shippers, brokers, and partners.
Scalability
They help quickly scale millions of transactions and are built to adapt to growing transaction volumes without performance issues.
Enhanced Partner Relationships
Cloud-based EDI systems that run smoothly and have zero downtime enhance partner relations by allowing faster and error-free transactions for better business collaboration.
Reduced Order Cycle Time
EDI systems help automate order-to-delivery workflow and carrier operations, minimizing shipment delays and costs.
Regulatory Compliance
EDI systems built on security protocols and encryption standards allow compliance with data privacy regulations and standards. They help adhere to the latest industry standards and government regulations.
Explore iTech’s EDI Services for Carrier Firms
At iTech, we employ a customer-centric approach as an EDI service provider. We ensure that every stage of electronic data interchange is aligned with the client’s requirements and long-term objectives. From document handling to EDI implementation, we guarantee a seamless EDI experience to help meet your digital transformation and innovation goals. We leverage our team’s expertise in X12 and EDIFACT standards for EDI and help map various file formats to facilitate seamless communication exchange between traditional partners. Here are some of iTech’s EDI services for carrier firms:
Trading Partner Onboarding
We help quickly integrate partners such as shippers, freight brokers, and suppliers. At iTech, we leverage our experiences in EDI development across industries to ensure a smooth partner onboarding process by making it more streamlined in terms of data flow. We make sure that there is a very minimal need for human intervention for collaborating with the partners and their systems.
EDI Map Migration
We can help your carrier firm seamlessly migrate transaction maps for improved compatibility. That means we ensure your enterprise gets an advanced and latest EDI platform that is built for data security and accuracy for deciphering transaction maps while keeping disruptions and errors minimal and enhancing overall effectiveness.
Migration to Modern EDI Platforms
You can transition from outdated systems to cloud-based, API-driven EDI solutions. We also help adopt modern EDI and security standards (AS2 and SFTP) to safeguard your enterprise logistical and supply chain data and adhere to compliance. Our team identifies the easiest path to building and migrating to industry-recognized EDI platforms while keeping your hardware and IT infrastructure in check. We prioritize your requirements by enabling ways to maximize EDI capabilities to swiftly respond to market changes.
EDI Data Integration
Your firm can experience synchronization of EDI transactions with internal TMS (Transportation Management Systems). Security is the core of EDI services that is designed to facilitate large volumes of transactions involving sensitive business data. Additionally, our team helps adopt security best-practices to prevent data breaches, unauthorized access, and non-compliance of data-privacy standards. The advanced security features of iTech’s EDI systems help scale data exchange as your business grows and accommodate new partners without performance or cost hurdles.
Customers that have leveraged iTech’s EDI services often report benefits like:
- Faster EDI transaction processing with improved accuracy.
- Cost savings by eliminating unnecessary manual paperwork and the risk of manual errors.
- Enhanced shipment tracking with real-time visibility on status and shipment routes.
- Better cash flow management with automated invoicing.
- Future-ready infrastructure for business expansion.
Conclusion
As of March 2024, approximately 577,000 active U.S. motor carriers were registered with the Federal Motor Carrier Safety Administration (FMCSA), which owns or leases at least one tractor. If your business is in the market for carrier services, investing in a modern EDI system built to support scalability and dynamic business needs is a staple. You can experience streamlined carrier operations by choosing the right EDI partner, from EDI development to managed file transfer and EDI integration to EDI modernizations.
Talk to our team about enhancing your business with next-gen EDI services!
