The development of Internet technology and mobile applications and their intensifying omnipresence in our lives and business require companies to analyze the strategy and approach to the management of supply chains. Excellent communication and coordination systems are now becoming more and more crucial as goods are transported across borders more than ever before. IT systems that effectively support the areas of logistics, must allow easy communication with a variety of partners in the supply chain. Therefore, from IT systems we require certain skills such as indexing and various data formats, but also a common “language” to identify and communicate with our business partners. Of particular importance now is EDI – electronic exchange of standard formatted data between the different trading partner’s systems in the supply chain.
EDI in the transport and logistics sector
To date, companies in transport and logistics sector (3PL), while implementing barcodes and electronic data interchange for message exchange, were developing their own solutions in this area. In most cases, these are closed systems and self-sufficient, based on the organizations own internal codes and communications applications. This is mainly due to insufficient knowledge of global standards, as well as poor use of information technology.
Any changes are very expensive and inconvenient to implement. Today, 3PL providers have embraced EDI for seamless communication with their clients. The introduction of EDI standards is a response to previously poor communications with their clients and to help 3PL improve efficiencies without having to invest in costly IT solutions.
The standard EDI messages
The data messages exchanged between 3PL’s and their clients is different from the data exchanged between the traditional seller and the buyer. Logistics companies are less interested in product identifiers and are more in shipped pallets.
The most common logistics messages are transport instructions such as EDI 940 – Warehouse Ship Order and EDI 945 – Warehouse Shipping Advice. These messages are in addition to basic data like the location and date of receipt and delivery, include identifications of goods, logistic units, the physical parameters of the consignment, the details concerning the conditions for the transport of goods, information on type of transport, quantities, recipient and sender of goods.
Another common message is a message concerning the status of transport, EDI 214 – Transportation Carrier Shipment Status Message. Statuses may relate to the delivered goods, means of transport, or the status of the order. Status information can be replaced at any stage of the transport chain as required. The amount of exchanged messages in logistics operators/3PL’s is huge for large providers such as DHL, Kuehne +Nagel.
For 4PL and 5PL operators, the number of transactions tends to be even higher due to the number of entities performing transportation tasks. This is why it is especially important to use standard EDI messages for consistency and automation.
EDI Jargon in Logistics
EDI Standards – EDI standards are formats for EDI documents (transactions sets) that specify what information goes where within an EDI document. Usually your specific industry or trading partners will determine which EDI standard your organization must use. Examples of EDI standards include ANSI X12, EDIFACT, Tradacoms, Odette, oioUBL.
GS1/UCC-128 Barcode Labels – A standard way of labelling packages that includes a scan-able barcode label that contains the shipping information for the order and is placed on the outer box. Now known as GS1-128 labels, these were formerly known as UCC-128 labels.
EDI 214 – Data contents of the Transportation Carrier Shipment Status Message Transaction Set (214) for use within the context of an Electronic Data Interchange (EDI) environment. This transaction set can be used by a transportation carrier to provide shippers, consignees, and their agents with the status of shipments in terms of dates, times, locations, route, identifying numbers, and conveyance.
EDI 940 – This transaction set can be used to enable the depositor to advise a warehouse to make a shipment, confirm a shipment, or modify or cancel a previously transmitted shipping order.
EDI 945 – The transaction set can be used by the warehouse to advise the depositor that the shipment was made. It is used to reconcile order quantities with shipment quantities.
For more information on EDI documents please visit our EDI Documents page.
If you want to know more about doing EDI with 3PL, please visit our Third Party Logistics Solutions page.