Three Myths of APIs

In the LTL supply chain, some companies are touting technological advancements that promise new ways of doing business. For individual shipment-related queries, shippers and other logistics providers are using this seemingly novel technology to connect directly with carriers to receive valuable shipment data.

Yes, transactional application programming interface (API) communications are the hot new thing. These LTL freight APIs are gaining acceptance in the marketplace because they bring advantages over other prevalent technologies – more frequent and immediate messaging, for one. But before fully committing to transactional APIs, shippers need to do their homework.

APIs are actually not a new phenomenon, and some technology companies have used more robust forms of APIs – tools built for analysis and optimization – in their solutions for years. But the emergence of direct-to-carrier transactional APIs and the supposed sunset of EDI technology – the traditional way shippers and 3PLs communicate with carriers – has created some misconceptions about these analytical API forbearers.

Without further ado, here are the top three myths of transactional APIs:

1. APIs benefit from blazing speed

Transmission speeds vary widely among APIs sources. Direct-to-carrier transactional APIs are incredibly valuable tools for transmitting data in “real-time,” but these APIs are often only useful for a small number of requests; some API sources can take 10 seconds or longer to return requested data. The speed of direct-to-carrier APIs is sufficient for scheduling a dispatch request or checking on the status of a single shipment, but not for all decision-making applications. Users hoping to run the complex analytical algorithms necessary to optimize their transportation decisions require robust technology that has the speed and power to deliver pricing and transit information in milliseconds.

2. APIs give shippers pricing power

Transactional pricing APIs allow users to connect directly to their carrier partners. Implicit in this arrangement is the idea that direct connectivity creates an unrivaled level of access. With these pricing APIs, shippers can indeed receive a rate directly from the carrier that will tie very closely with the invoice price, but this might not square with the shipper’s previously contracted rate. After all, carriers can make mistakes when loading rates into their systems, and there are no guarantees they will not change the rates without notice. Shippers should protect themselves with additional checks and balances by using a third-party rating solution.

3. APIs can stand alone

No single technology solution can provide all the answers. While transactional LTL freight APIs solve many problems, they aren’t a panacea; they should be used in combination with other technologies as part of an overall LTL optimization strategy. Due to the prevalence of EDI technology and its use by major shippers, reports touting the death of EDI are greatly exaggerated – EDI technology won’t be fading into the background anytime soon. EDI isn’t right for every shipper, just as transactional APIs might not provide enough analytical power for others. Companies that offer a range of technology solutions can support shippers’ needs as they grow, whether the shipper is dealing with 10 shipments or 10,000 shipments per day.

By augmenting transactional APIs with SMC³’s RateWare XL, shippers and 3PLs can tackle any LTL pricing need, no matter how large. To learn more about RateWare XL, please read the data sheet or contact sales@smc3.com.

David Knight

As chief information officer, David Knight shapes SMC³’s long-range technology direction and product strategies to positively impact customers and partners across North America.


Categories: Logistics Service Providers, Technology
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