Electronic Data Interchange vs. Application Program Interface

Written by Neal Willis

shipment-information.jpgElectronic Data Interchange (EDI) has been the industry standard for years. EDI is a form of communication between two systems where the specific status or value of something is conveyed to another system at a particular time, and ongoing communication between the two systems endures based on scheduled batch exchanges or data transmissions that take place at regularly scheduled time intervals.

For example, a shipper may send a carrier a list (or batch) of shipments they would like the carrier to pick up every morning.  In turn, the carrier will transmit an EDI file back to the shipper at the end of the day that acknowledges receipt of the request sent by the shipper asking for pickup of those shipments, so the shipper knows the carrier received their request.  Shippers and carriers can communicate using this process daily, but the exchange of information is essentially only an exchange of status messages that acknowledges communication being sent and/or received.  It doesn’t give any further detail regarding specific shipment status and/or shipment detail for any shipments within the list or batch.

freight-data.jpgApplication Program Interface (API) is an application that enables connectivity & communication between two programs and/or systems in near real time for multiple variables and/or values.  The use of APIs is becoming more common as it enables multiple values or fields of information to be exchanged with only one data transmission.  APIs allow for faster processing of information making the environment in which it’s used more dynamic in nature.  With the use of APIs, information tends to be more current and accurate and, by using APIs, carriers and shippers alike have a more up-to-date view of live conditions and can respond to requests faster and more accurately.

EDI is considerably more sophisticated and is much more expensive than API.  EDI is typically licensed per partner and the setup time for EDI is much longer per partner than writing some code to invoke an API.  For instance, it might take a couple of months to set up an EDI feed with a carrier, whereas a lower level programmer could take a couple of hours to draft a program to invoke an API that gets the data they need.  APIs are free to use.  They have been around since the early 2000s, so the minimum requirements for computing power are pretty low.

To put this in simpler terms, EDI and API could be compared to traditional mail vs. text messaging, with EDI being similar to conventional mail and API being similar to text messaging.  An API allows for a more real-time exchange of information, whereas conventional mail and/or EDI involves a process of sending and receiving information that can be delayed for longer periods of time with more susceptibility to problems.