Why leveraging EDI is crucial for modern shipping
EDI (Electronic Data Interchange) offers a single, standardized format for exchanging information and documentation, such as purchase orders and shipping confirmations. Leveraging this technology saves importers and exporters time and money while reducing the risk of non-compliance.
Companies that still haven't pivoted to a digital-first approach will find themselves falling behind the competition. As a technology that revolutionized the industry, EDI replaced slower forms of paperwork and communication with a lightning-fast network that connects shipping across the globe.
What is EDI for Shipping?
When it comes to shipping, EDI streamlines communication processes by using a digital exchange of business documents in a standard electronic format between trading partners and organizations related to trade, like the Canada Border Services Agency (CBSA) when importing into Canada.
EDI in shipping dates back to the 1960s, when businesses sought to replace paper with electronic communication. As trade expanded around the world and supply chains grew more complex, EDI emerged as a solution that enabled businesses to transmit essential documents. By the 1980s, shipping and logistics companies had widely adopted EDI to streamline operations, reduce errors, and accelerate the flow of goods across borders.
Documents and data such as invoices, shipping notices, bills of lading, and purchase orders, are handled through EDI. This automates and digitizes critical data transactions and minimizes manual errors and delays, while enhancing the efficiency of shipping operations and supply chain relationships. It’s been the go-to technology for logistics providers to track shipments, manufacturers for supply chain management, suppliers for inventory management, and order fulfillment for e-commerce.
3 biggest benefits of EDI for shipping and logistics
There are countless benefits that EDI has enabled. Here are our top three for :
-
Greater efficiency
EDI adds automation for the exchange of crucial shipping documents including bills of lading, purchase orders, shipping notices, customs documents, inventory records, payment documents, and shipping status updates. This automation enables faster processing and significantly reduces document cycle time by minimizing errors from manual processes.
In addition to time savings, EDI eliminates much of the manual paperwork that was traditionally involved in business operations. This efficiency has greatly improved delivery processes and other supply chain workflows.
-
Stronger supply chain partnerships
Building trust is essential to nurturing positive relationships across the supply chain. EDI enables reliable communication and collaboration with trading partners, allowing you to facilitate more efficient and predictable trade processes. If issues arise, the use of EDI provides data that can help to solve misunderstandings. This type of clear communication goes a long way in moving towards enhanced collaboration and better efficiency while tapping into valuable business partnerships.
-
Enhanced visibility
EDI can provide real-time data transmission, increasing visibility across the supply chain. This transparency helps businesses better track and manage inventory, ensuring all stakeholders are informed about shipment statuses and schedules. Real-time tracking identifies potential bottlenecks and enables timely decisions. Enhanced visibility leads to better customer service, reduced uncertainty, improved logistics coordination, and smooth operations.
Modern EDI standards for shippers
Modern EDI standards leverage technology that accelerates and streamlines information sharing between shippers, traders, and customers. Some of these EDI standards offer a flexible framework that integrate seamlessly with supply chain solutions, while others were developed by international organizations.
XML
Extensible markup language (XML) provides a text-based, self-descriptive that can be used as an alternative to established EDI standards. Traders, shippers, and customs professionals can use XML to exchange crucial information, such as shipping requests, customs filing, and status updates that can be used across different platforms.
EDIFACT
EDIFACT is a common EDI standard developed by the United Nations and used for international shipping and logistics. This standard supports the exchange of documents such as the bills of lading, cargo manifests, and customs declarations, helping to reduce paperwork and better coordinate the movement of goods across borders.
EANCOM
A subset of EDIFACT created by GS1, EANCOM is an EDI standard that’s used within retail and distribution supply chains. EANCOM helps to standardize documents like purchase orders and invoices that can be linked to shipping and delivery tasks while supporting clear communication between shippers, suppliers, and retailers.
RosettaNet
An EDI standard based on XML, RosettaNet is typically used by companies in electronics and high-tech sectors. Trading partners use RosettaNet to share information for shipments, inventory, and logistics and coordinate across global supply chains.
JSON
Similarly to XML, JavaScript Object Notation (JSON) provides a framework that’s used as an alternative to established EDI standards. JSON is becoming more popular because of the flexibility and speed of this format, which is used by shippers through an application programming interface (API) integration that connects with multiple platforms for freight, customs, carriers, and traders. One of the benefits of JSON is the ability to exchange real-time updates for delivery tracking, shipping rates, and communications across supply chains.
Navigating trade by leveraging efficient EDI
Speed, accuracy, and agility drive success in logistics, and EDI remains a cornerstone of digital transformation in shipping. In fact, EDI is no longer optional: it's a strategic enabler for business competitiveness across the globe.
As the global trade environment continues to evolve, businesses that fully leverage technology such as EDI not only future-proof their operations—they also unlock new opportunities for growth, innovation, and stronger customer experiences.
Cole aligns with how your company works. If your supply chain operations change, we provide solutions tailored to help you adapt and thrive. Connect with Cole today!
Full-service logistics. It's what we do.
