According to Wikipedia Electronic data interchange (EDI) “is the concept of businesses communicating electronically certain information that was traditionally communicated on paper. The two classic examples of such information are purchase orders and invoices. Standards for EDI exist to facilitate parties transacting such instruments without having to make special arrangements.”
Brief History of EDI
Decades ago the industrialized world was becoming swamped in paper work. The transactional day-to-day data that had to be tracked was unmanageable. It was during this time in June of 1948 that U.S. Army Master Sgt. Edward A. Guilbert developed a standard manifest system that could be transmitted by telex, radio-teletype or telephone. In the 60’s Guilbert went on to work for Du Pont Co, where he integrated electronic messaging between Du Pont and one of their carriers. From here on the technology spread to other industries and in 1968 the Transportation Data Coordinating Committee (TDCC) was formed. Years later in 1975 they published their first set of EDI specifications.
How EDI Works for Trucking
The basic premise is that a trucking company can use their transportation management system to send documents electronically back and forth with customers and supply chain partners. The carriers EDI provider will take a processed document and electronically map that document to their customer’s software so that they receive the document automatically. There is no paperwork, no email, and no manual data entry.
Carriers should be working with (or considering) an EDI provider that can transmit/trade the following documents:
204 Carrier Load Tender
- This is used by shippers to tender an offer for a shipment to a full truckload (or LTL) motor carrier.
211 Carrier Bill of Lading
- This transaction set can be used to allow shippers or other parties, responsible for contracting with a motor carrier, to provide a legal bill of lading for a shipment. (Can also be used as an LTL "load tender")
216 Carrier Shipment Pickup Notification
- This transaction set can be used to allow shippers or other interested parties to provide a motor carrier with notification that a shipment is available for pickup.
990 Response to a Load Tender
- This transaction is generated in response to a 204 transaction, Carrier Load Tender. This is used by manufacturers, distribution centers, wholesalers and other organizations that produce, handle and/or ship goods, to make – or “tender” – the offer of the shipment.
997 Functional Acknowledgment or FA
- This transaction is sent as a response to other EDI transactions received. An EDI 997 serves as a receipt, to acknowledge that an EDI transaction, or a group of transactions, was received by the remote party
POD Proof of Delivery
- An Imaged copy of the signed copy of the delivery receipt BOL Bill of Lading
BOL Bill of Lading
- An imaged copy of the Bill of Lading/Freight Bill both of these are used as back up documentation for the 210 Invoice. One or all may need to be submitted to the shipper/freight payment company.
210 Carrier Freight Details and Invoice
- This transaction replaces a paper invoice, used by commercial truckers and other freight carriers. The 210 transaction is typically sent from the carrier to a shipper, consignee or third-party payment center for payment of freight charges.
820 Payment Order/Remittance Advice
- This transaction is typically used in conjunction with an electronic transfer of funds for payment of goods, insurance premiums or other transactions. The actual funds transfer is often coordinated through the Automated Clearinghouse (ACH) system, and an 820 may be effectively wrapped in an ACH banking transaction
214 Carrier Shipment Status Message
- This transaction is typically used by transportation carriers, such as trucking companies, to provide shippers and consignees with the status of their shipments.
Once a document is sent via EDI it must travel through a secure network to get the data from shipper to carrier and vice-versa. Many times this “value-added network”, or VAN, can add costs to the transaction. A Value-Added Network (VAN) simplifies the communications process by reducing the number of parties with which a company needs to communicate. Carriers should look for an EDI provider that utilizes a built-in VAN service, to avoid these “middle-men” expenses. At Roadvision, our trucking software not only can handle all of these transactions, but we also offer VAN services to all of our carrier partners at no extra charge.
EDI in Transportation Today
To be a competitive carrier in 2017 trucking companies must be utilizing or adopting EDI technology, shippers simply demand it. However carriers need to be smart about who they choose as their provider. Carriers should consider partnering with a technology provider that integrates EDI as part of their overall transportation management platform. In our experiences the fewer technology providers a carrier must partner with the better.
The Future of EDI in Transportation
As with all things related to technology, the times are constantly changing and innovation is happening at a rapid rate. Many carriers are now moving to API (Web Services) for information trading, this technology has its benefits as we discussed previously (Trucking API). However, the need to move to this new technology is not as imperative as some companies may have you believe. EDI is still a great tool for many trucking companies and will continue to be so for a long time. With Roadvision, carriers maximize efficiency utilizing the best of both technologies, running built-in EDI and API based solutions to share real-time information from end-to-end.
EDI solutions reduce manual data entry and clerical errors, improve compliance, and accelerate each trading partner’s access to information. Start creating happier logistics partners by improving communication, as-well-as supply chain performance, by integrating EDI technology today.