Understanding the differences between an EDI and API

The way shippers do business today is much different than in years past, largely because of technology. Technology has arguably had a significant impact on supply chain operations, offering ways to improve efficiency, accuracy and supply chain flexibility. Two common solutions are electronic data interchange (EDI) and application programming interface (API). While both aim to facilitate the transmission of large amounts of data between a shipper and a carrier, they do so in different ways.

However, APIs provide a more modern, flexible and efficient solution compared to EDI. APIs allow for real-time data exchange, better integration with other systems and easier implementation and updates. This means that shippers using APIs can adapt more quickly to changes, streamline their operations more effectively and ultimately achieve better performance in their supply chains. When evaluating EDI versus API, shippers should consider the enhanced capabilities and long-term benefits that APIs bring to the table.

EDI is a standardized method for exchanging business information electronically and has been used across industries since the 1970s. EDIs offer advantages in terms of standardization, efficiency and accuracy, but they also come with challenges related to cost, complexity and inflexibility. Proper planning, investment and partner collaboration are essential to successfully leverage the benefits of using an EDI.

• Security: EDI transactions are often encrypted and use secure transmission protocols to ensure data integrity and confidentiality. Only predetermined, authorized users will be able to receive the data.

• Efficiency: Automated data exchange of large volumes of documents reduces the time and effort needed for manual processing and speeds up business transactions.

• Standardization: EDI data is heavily mapped and needs to be sent in the same exact format every single time to ensure consistency and compatibility.


• Setup and costs: The initial setup of EDI systems can be costly and time-consuming, requiring significant investment in software, hardware and training. Each EDI connection requires ample time to build—and maintain—the connection.


• Inflexible: EDI data standards can be complex and rigid, making it difficult to customize for specific business needs and ultimately limiting flexibility and adaptability. If information is missing or in the wrong place, the data may not be processed correctly.


• Interoperability issues: Even though standardization is paramount for EDIs, different industries or shippers may use nuanced standards, leading to potential interoperability issues and additional complexity in managing multiple standards.


• Limited real-time data: EDI does not typically support real-time data exchange, which is an increasingly important element of doing business for shippers to remain competitive in today’s fast-paced market. Instead, it relies on batch processing and can take anywhere from 30 minutes to over two hours to accomplish, which is a significant limitation if instant data updates are needed.

An API is similar to an EDI in that it performs the same types of functions, but it does so in a much more streamlined and efficient way that is on par with modern best practices. An API is a web-based protocol that connects two software systems so that they can communicate and share data in real time. For shippers, that means an API connects its transportation management system (or TMS) with a transportation provider’s data system. This connection automates processes between different systems with your carriers while staying agile, data-led and on top of the market.

• Setup and maintenance: API setup is a one-time thing, allowing for additional connections to occur when needed without further time investments. The API is also scalable, allowing systems to grow and handle increased use and/or needs without significant maintenance time required.


• Flexibility and customization: APIs can be tailored to specific needs, providing granular control over what data is exchanged and how.


• Interoperability: APIs allow different software systems to communicate and share data seamlessly, facilitating integration across diverse platforms and technologies.


• Efficiency: Repetitive tasks and processes are automated and streamlined, reducing the need for manual data entry and transfers and improving operational efficiency. Personnel are able to engage in more strategic activities that can help benefit the business.

• Less secure: APIs utilize web-based software, requiring more robust security measures. However, with the appropriate protocols that modern companies should already be implementing, APIs can offer a secure and efficient way to manage data exchanges.


• Internet reliance: While everything seems to use the internet these days, we can all recount times of frustration when it’s gone down, inhibiting access to core functions. Since APIs require strong, stable, consistent connections for optimum performance, any internet interference can disrupt the flow of business.


• Dependency on external services: Using third-party APIs can incur costs, either through fees, usage-based pricing or the costs associated with maintaining the API infrastructure. Also, if the provider changes components of the API or if there’s downtime, it can require system upgrades or maintenance.

However, APIs stand out when considering the speed of data exchange, the level of flexibility and the ease of integration across all modern web mediums, allowing shippers to adapt to market changes and customer demands. That makes an API the better choice to aggregate data and enhance business operations. Schneider leverages the most advanced technology to help shippers quote, book and track freight through its APIs, giving you the control to drive efficiencies that also lower costs. Also, its army of experts make API connections efficiently and effectively so that collaboration is enhanced and ensures your business stays on the edge of what’s happening now and, most importantly, what’s happening next.

Experience the enhanced benefits and long-term advantages of an API over an EDI in your shipping operations.