It is no surprise that companies with a well-designed and sustainable logistics strategy can achieve their goals faster. However, such a strategy can only work on the sound foundations of effective, automated data exchange. There are many ways to build this process, but one of the most effective is by using electronic data interchange (EDI). Why? Here are the answers.
What is the role of electronic data interchange in logistics?
Logistics companies are in a constant search for measures to improve their efficiency and cut costs, and many of them are already utilizing EDI for that purpose. Thanks to this software, TSL operators ensure smooth communication with clients and business partners. With an EDI platform, it is also much easier for them to add new partners to their data flow and, as a result, to receive EDI freight offers. The last couple of years have shown us how important an efficient EDI strategy is for the TSL companies, and there are no indications that the situation is going to change in the near future.
As the transport industry experiences increasing delivery pressure and market requirements, it gets more and more challenging for logistics companies to maintain their competitiveness. So it is only logical that, in a sector demanding dynamic, accurate and efficient data exchange and shipments, the adoption of EDI software has been faster and broader than in any other sector.
Another advantage of electronic data interchange is its support in building and maintaining trusted business relationships with customers and suppliers. When daily communication is seamlessly automated, crucial departments are allowed to focus on strategically important tasks. EDI minimizes the amount of manual data entry into invoicing and shipping systems, which saves time and money.
To conduct business, each organization needs full control and visibility. These can only be achieved by harmonizing and standardizing critical information exchange. Comarch’s EDI solution was designed to bring companies exactly that. By providing real-time processing of inbound and outbound shipments data, it enables you to make transport operations much smoother and more efficient.
What important transactions can you make in EDI?
With the use of electronic data interchange, your possibilities are much wider than simply exchanging standard documents such as orders and invoices. There are also some industry-specific transactions that become much easier.
Among the most relevant EDI transactions used in TSL to communicate between business partners using electronic documents are:
- Carrier load tender
- Response to a load tender
- Freight details and invoice
- Bill of lading
- Delivery trailer manifest
- Shipment status message
- Payment order/remittance advice
- Functional acknowledgment
These are only some of the many EDI transactions dedicated for the logistics sector, including sets for air, sea, rail and road transport. In the case of some specific requirements of your company, it is also possible to customize an EDI solution according to individual preferences or specifications.
No matter their size, location and overall technological maturity, companies are now required to communicate with business partners by preparing, sending, receiving and processing a large number of various documents. To do this smoothly, EDI uses two common standards:
1 EDIFACT: used in European countries for international transport
2 ANSI X12: the main standard used in the countries of North America
Both of them were created to exchange electronic documents and perform business processes between two or more business partners.
Why is using EDI beneficial for transportation companies?
There are many reasons for the increasing popularity of EDI in the logistics sector around the world.
First, when a company is developing and growing in size, it can easily transform into a complex and unmanageable entity. The use of electronic data interchange software helps such an organization streamline its operations while keeping the workflow fully transparent.
Second, the exchange of EDI documents between trading partners allows them to integrate and simplify business processes. Thus, in logistics (independent of the mode of transport), electronic data interchange is widely used as a reliable, secure and cost-effective transmitter of relevant business information regarding freight movement.
Third, a great benefit for transport specialists is that core business communications, including high volumes of exchanged data, can easily be automated with the use of EDI. If you’re trying to find more time for tasks that require some creative work and strategic thinking, EDI will help you out.
It also brings much help for shippers and forwarders, who don’t need to enter data manually into their shipping systems. Think how much money you can save by minimizing the risk of costly data entry errors. There is much more that EDI can offer, such as increased speed and accuracy for communication across the supply chain, elimination of paper, improvement of the logistics processes and inventory management, and secure data exchange networks.
It is possible to function without EDI, but why make things harder than they need to be?
As you can see, there are many ways in which TSL businesses utilize electronic data transmission with the use of EDI.
They also benefit from customizing EDI systems with different features involving slightly different technical solutions and structural configurations. Such systems are highly cost-effective, especially when they are used for a great many repeated transactions within inter-organizational relationships.
Implementing an EDI solution allows transport and logistics companies to increase their operational efficiency, gaining full control over costs, and becoming much more competitive in the already challenging marketplace. All in all, there is no need to make things harder and less efficient while having access to such a great tool.
Prepared by: Data Exchange & Document Management Team at Comarch.