Today's increasingly challenging business climate has placed trucking businesses under immense pressure to make operations more efficient. Consequently, enterprises are increasingly investing in solutions that facilitate faster and more secure data sharing.
Electronic Data Interchange is the most ubiquitous protocol for sharing data and documents between logistics companies today. With EDI, trucking enterprises can send information back and forth electronically rather than using slow, costly, and error-prone paper-based methods.
If you have yet to implement EDI software, you may think it is complicated, costly, or even inapplicable to your enterprise. Nevertheless, as you will learn below, EDI not only has substantial potential to improve your operations but is also easy and affordable to implement with the right EDI partner.
What is EDI?
Electronic Data Interchange is a digital protocol for exchanging documents and data between two or more computer systems. EDI leverages standard formats pre-agreed upon by industry participants to ensure shared information is readily read and processed by the receiving system without any human intervention.
EDI can automate numerous trucking processes, from quoting, estimating, contracting, and dispatch to invoicing, billing, and payment, benefiting businesses with faster, accurate communication, fewer manual processes, lower administrative costs, enhanced transparency, and stronger relationships with business partners.
Trucking without EDI
Global supply chain companies have been utilizing EDI tools since the late 1960s. Today, the largest trucking companies, including UPS, FedEx, and XPO Logistics, all use EDI to streamline B2B communication and document transfers, benefiting from reduced costs and delays, improved data accuracy, and higher customer satisfaction levels.
However, many logistics transactions, especially those involving small and medium-sized businesses, are still completed without EDI and other digital tools. Manual documentation and slow information flow result in higher costs and significant inconvenience for the parties involved.
To better understand EDI in trucking, consider the example below, demonstrating the old-fashioned way of doing things.
- A plastics products supplier, Applied Plastics, has a load of plastic chairs that need to be delivered to a customer, Kent & Sons.
- The logistics manager at Applied Plastics creates a load tender document and uses phone, fax, or mail to alert the carrier, Eagle Express.
- Upon receiving the load tender document, an Eagle Express dispatcher phones or faxes an acceptance to Applied Plastics.
- The Eagle Express dispatcher manually feeds the document's information into their company's internal resource management system. Unfortunately, this manual process is significantly susceptible to errors.
- Eagle Express sends a truck to pick up the chairs at Applied Plastics, and the loaded truck later proceeds to Kent & Sons.
- While the consignment is in transit, Kent & Sons runs out of plastic chairs and calls Applied Plastics to check when the new shipment will arrive. Applied then calls the Eagle Express dispatcher, who calls the driver. The driver communicates his location, and the information flows back to Kent & Sons through all the previous checkpoints.
- Kent & Sons receives a status report about the shipment 30 minutes after making the initial call to Applied Plastics. By this time, the truck's position has already changed.
- When the truck arrives at Kent & Sons, the receiving officer signs the delivery documents and returns them to the driver to take to Eagle Express. The driver then decides to spend the night at Kent's hometown and journey back the following day.
- Meanwhile, the sales manager at Applied Plastics wants to know if the Kent shipment arrived. She contacts the Logistics Manager, who calls Eagle Express, who calls the driver. Eventually, delivery confirmation is received.
- When the delivery documents finally arrive at Eagle Express, a billing officer prints an invoice and mails it to Applied Plastics. The invoice arrives days later, and Applied's accounts payable officer enters it into the system.
- Several weeks pass, during which Eagle's billing officer calls Applied Plastics multiple times to push for payment. Applied finally issues a check to Eagle Express, and days later, the check arrives at Eagle Express via courier.
How Does EDI Improve Trucking Operations?
Electronic Data Interchange replaces the many time-consuming logistics transactions with automated, instantaneous communication processes. EDI solutions convert documents created in-house into standardized formats that external systems can receive and read autonomously.
Therefore, with EDI, tasks like printing out load tender documents and invoices, feeding information into internal systems, sharing shipment status, and exchanging delivery documents are automated, eliminating the risk of document loss or errors and dramatically reducing "pickup-to-paid" time.
Let's revisit the "plastic chairs" example above but use EDI to facilitate the transaction.
- Applied Plastics receives a purchase order from Kent & Sons on their computer:
- In one keystroke, the Logistics Manager at Applied Plastics sends a digital copy of the order to Eagle Express via EDI.
- Upon receiving the order, Eagle's EDI software immediately returns an acknowledgment, which is received and automatically logged by Applied Plastics' system.
- Eagle's EDI solution logs the order in the company's ERP. A dispatcher receives an EDI alert that an order needs fulfilling and sends confirmation through EDI. If the dispatcher declines, the logistics manager at Eagle Express can quickly send out a new request to another dispatcher.
- The driver arrives at Applied Plastics. He sends an EDI check-call to Eagle's trucking software via his mobile device. Eagle's software sends an EDI message to Applied Plastics, informing them that the truck has arrived. Once Applied Plastics returns a confirmation, the order status updates to "Truck at Applied Plastics."
- As the driver rolls down the highway, his mobile device sends periodic location updates to Eagle's software, relaying them to Applied Plastics. Applied Plastics can give Kent an instant status update when Kent calls without first checking with Eagle Express.
- Both Eagle Express and Applied Plastics are immediately notified when the load arrives. Eagle Express does not have to wait for the delivery documents to return to issue an invoice to Applied Plastics.
- When Eagle Express is ready to invoice Applied Plastics, they send a digital invoice, which is instantly received at Applied. Applied Plastics' system updates its payables and marks the invoice for payment.
Why Do You Need Trucking EDI Software?
In the trucking business, accurate, speedy communication is essential for keeping costs down, maximizing efficiencies, and staying on schedule. However, many trucking companies struggle to balance these priorities because they use different systems and data formats to manage resources and communicate within and beyond their walls.
Modern trucking EDI software integrates with existing resource management solutions to automatically route and track data and documents across your logistics ecosystem. Therefore, rather than manually moving information from one system to another, you can leave the systems to communicate autonomously and focus on what really matters: your people, processes, and performance.
Remedi Can Help You Leverage EDI to Streamline Trucking Operations
As your trusted EDI partner, Remedi can help you leverage top-range EDI solutions to automate B2B transactions, accelerate operations, and strengthen relationships. With EDI installation specifically tailored to your enterprise, you can avoid the delays and errors of manual data entry and cut operational costs.
Moreover, partnering with Remedi for EDI deployment gives you the confidence of knowing your documentation is mapped according to the latest ANSI X12 and EDIFACT standards. Therefore, you can worry less about B2B integrations and focus on running your business.
Want to know more about EDI's transformative potential for your trucking company? Contact a Remedi expert today and let us kickstart your journey toward fast, secure, and error-free B2B integrations.
