In the less-than-truckload market, application programming interfaces have become more frequent. It’s a momentous shift that will result in significant efficiencies for an industry transitioning from the analog age.
An API enables two systems to communicate with one another. It enables applications to exchange data and carry out transactions in real-time.
“Historically in LTL freight, base rates, carrier coverage points, and other information were moved around manually via physical disks and CDs and had to be loaded, modeled, and set up on each individual system,” said Curtis Garrett, chief strategy officer at Recon Logistics.
“It was the epitome of information silos.” “Nothing was networked, and nobody benefited from the scalable attribute of automatically sharing information,” Garrett, who has worked in LTL pricing and technology for 15 years, stated.
Over time, the sector shifted to electronic data interchanges, which enabled the transfer of load tenders, tracking updates, and invoicing details between systems. While certain information can be exchanged via EDI, more complex tasks such as pricing and rating cannot.
“It wasn’t fast or flexible enough to manage to rate,” Garrett explained. “So the standard was still for shippers and 3PLs to model and load LTL pricing in their system — ideally to match what the carrier had in theirs, without too many problems.”
The API transition
By the mid-2000s, a few organizations had begun to develop API capabilities, and today, initiatives continue to grow in-house at many carriers, 3PLs, and visibility providers supporting the industry.
Garrett stated that, while EDI is still widely utilized today, the emphasis has switched to more general API connectivity.
“Even today, the industry is so early in what will eventually all be handled via API connectivity, but we have a good platform to build on with rating, tendering, tracking, documentation, and now electronic bills of lading.”
Using APIs in the rating process is quickly becoming the new standard, particularly as the industry transitions to dynamic pricing. Furthermore, Garrett hailed the Digital LTL Council as a “game-changer for the industry” in driving the sector away from manually generated bills of lading.
However, some carriers are still unable to model all of their accessorial charges and pricing components effectively.
Garrett stated that Recon utilizes a “hybrid rating” strategy to fill API rating gaps on their TMS. “We’ll model some accessorials internally using our rating engine, then fetch the linehaul and fuel surcharges via API, and automatically marry them up to provide our end customer a complete rate.” Shippers are unaware that we are required to do so.”
The Future of APIs in the LTL Industry
Garrett anticipates that the industry will API anything that is currently controlled via emails, portals, and customer care queues in the near future.
Rating APIs will soon inform carriers if they are being pinged for analysis or for actual shipping quotations, and tracking APIs will evolve to provide more dynamic cargo detail surrounding pickup and delivery. He also anticipates the claims procedure to become as simple as a shipper or 3PL submitting them from their own TMS in the near future.
“Hypothetically, any process or function that sits in a piece of software and results in information being given to another platform regularly, with only the current shipping data changing, will eventually all be API driven,” Garrett added. “In this approach, humans in our industry may be better leveraged to make judgments, seek for exceptions, and apply logic to the gray — rather than serving as information nodes that send and receive bits and bytes.”
