OCTOBER 2021

API REVOLUTION

A FREIGHT FORWARDER’SGUIDE TO THE

From current community perspectives to overcoming digital hurdles, this whitepaper guides you on how to embrace the technology that promises to transform logistics.

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Abstract But first, what is an API? How did we get here?Headwinds & Pain PointsData standardization is now a cultural issueAren’t APIs basically the same thing?Four benefits that are increasingly hard to ignoreThe first disruptionThere’s more low hanging fruitHow can you start using APIs in your business today?ECU360’s Hassle-free onboarding

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Table of Contents

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01AbstractThe following whitepaper references a global survey, ”Understanding the Forwarders’ Perspective on API Adoption’’, conducted by ECU360, of over 120 commercial freight forwarding companies. The study helped discern the impact APIs have on the forwarding community and in understanding the forwarders’ perspective on API adoption.

Key takeaways from the survey

1/3 of respondents have already adopted or are looking to adopt APIs.

21.5% of the respondents consider inaccurate data to be a hindrance to supply chain integration.

65.3% of the respondents mentioned good customer service to be the most vital parameter they look for in vendors.

Even though the logistics industry is ripe for innovation, historically, it has been slow on the uptake with technology; which holds true with data capturing and building inter-stakeholder connectivity.

This whitepaper examines both the freight forwarding community’s perspective on APIs as well as the residual impact on the value generated by increased adoption of the technology across the industry.

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02But first, what is an API?

APIs, or Application Programming Interfaces, are software intermediaries that allow information to be exchanged between different digital platforms. They are the translators that allow programs to talk to one another.

We unknowingly use APIs several times a day, whether it’s payment APIs that facilitate credit card transactions and bank payments or booking APIs that connect the reservation processes of your favorite travel website to an airline’s, or a hotel’s, in-house software. The ease and speed with which the internet is evolving as an orchestrated interplay of different digital platforms can all be owed to APIs.

Now that we known how APIs are making our lives easier by gluing together the internet, how does it impact the logistics industry? Supply chains are becoming increasingly complex owing to the number of players involved thrusting the limelight onto the process that enable each player’s platform to seamlessly communicate with another.

Each new digital platform cannot exist in a silo, they need to communicate with each other hundreds, if not thousands or even millions, of times a day. These communications cannot be handled manually. Herein lies the value of APIs as an automated and highly programmable solution, one that's needed to avoid widespread inefficiencies and delays, The use of APIs also impacts a shipper’s ability to make educated decisions related to the whereabouts and status of their freight at any given time. APIs can alleviate some of these challenges and can help companies develop more efficient processes, create closer ties with customers and partners, and make it easier to complete basic daily tasks.

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03How did we get here?

While the process of freight forwarding has largely remained unchanged, the environment surrounding the shipping operations has seen considerable disruption over the years. The rise of globalization and online shopping has created an urgency to ship quicker and more efficiently. But in contrast, the logistics industry continues to rely largely on conventional processes for its working, be it through paper bills or manually calling up carriers to book capacity.

With global supply chain networks in disarray following the pandemic, forwarders are also witnessing issues with labor shortage and crippling volatility in freight capacity availability. Companies are finding it increasingly hard to service demand, as the process of scaling up the workforce is not agile enough to keep up with the volatility of demand.

High freight prices and the burden of recruiting people to handle the manual processes in a tight labor market is causing immeasurable problems to forwarders. And this is where digitalization and API adoption can convincingly improve business operations—by providing visibility into the network and automating repeatable processes. Companies can reduce operational costs associated with labor employed to execute processes that are now automated.

Application programming interface (API) solutions help replace physical documentation and digitally store data in a standardized format—creating a scenario where data arising across systems within an organization can be seamlessly worked with for producing tangible results.

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The predecessor to API—the electronic data interchange (EDI)—had been the de facto mode of exchanging data over a standardized format since the 1980s. API is seeing more takers today thanks to it providing applications the ability to instantly communicate with each other, helping companies make ‘real-time’ logistics decisions. With EDI, real-time reception is harder to achieve as data must be stored before it is transmitted.

API adoption across supply chains can collectively help different stakeholders like carriers, shippers, brokers, and other logistics service providers (LSPs) gain improved visibility into operations both upstream and downstream, thereby creating efficiency add-ons for supply chains at large. Freight movement involves cargo being pushed through the custody of several stakeholders in the value chain. A supply chain with a functioning API network can automate a significant portion of the workflows using technology to optimize routes, keep records, and analyze data.

Reducing human contact with operations and processes will help businesses move freight quicker through supply chains, even as they retain visibility into product movement—enabled by data integration across organizations.

At ECU Worldwide, we looked to granularly understand the impact APIs, or the lack thereof, can have on forwarders. We received over 120 responses to our survey, with respondents from roughly 50 countries representing a spread-out forwarder pool. Respondents also came in different sizes, with 43% forwarders having annual revenue of less than $1 million, 33.1% with annual revenue between $1-$10 million, and 15.7% with annual revenue between $10-100 million.

03 How did we get here?

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04Headwinds & Pain Points

Technology limitations and data streamlining are major headwinds to API adoption

Half of the respondents mentioned technological limitations to be a significant impediment to API adoption. A large part of the industry continues to manually jot down operational data and hold physical documents. This results in information being held up in data pockets across different segments within an organization, siloed from the rest and practically ineffective.

Errors could happen while manually entering data, inevitably resulting in inaccurate data insights. Lack of data or bad data is a significant problem, with 44.6% of the respondents stating this to be a pain point. 21.5% of the respondents consider inaccurate data to be a reason for their inability to share insights with other stakeholders.

Inaccurate data is not the only recurring problem. Lack of uniformity in data is a sizable issue, with 29.8% of all respondents mentioning this to be a hurdle. Over one-fifth of the respondents said gathering and cleaning data to be a problem, highlighting the issues resulting from manual entry and erratic data storage. While this is a laborious process, it is a crucial step to ensure data streams remain streamlined. For instance, export and import shipment data should ideally match within a company’s freight forwarding operations, which often is not the case due to data inconsistencies.

The frustration of forwarders on poor data quality is again reflected in their satisfaction levels with the data they work with daily. At 39.7%, a significant chunk of the respondents felt the data they used needed improvement, with a further (??)% stating the data they use is unsatisfactory. It can be argued that awareness of the need for quality data is permeating within the industry, and the situation can be expected to progressively get better over the next decade.

Streamlining data is a problem as companies store and push their data across various digital formats. Over 60% of the respondents mentioned receiving data as tables on Excel or CSV sheets, as emails or text files, or even as PDFs or images. While streamlining data from sheets is difficult in itself, lifting data from images or PDFs would require complicated programming tools—wasting forwarders’ time and resources. Data quality apart, a quarter of the forwarders also had organizational and cultural problems. This is likely, as companies continue to have trust-related issues with inter-stakeholder connectivity.

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The data suggests that even in 2021, the logistics industry suffers from poor data hygiene which is subsequently creating an encumbrance to adopting newer and faster approaches to data connectivity- such as APIs. An interesting point to note is that nearly a quarter of the forwarders surveyed blamed organizational or cultural reasons as a primary pain point, indicating that there is still the need for a wave of data literacy needed for decision makers to understand the economic implications of improved data connectivity.

These stats indicate a few things. The first is that email marketing is getting squeezed. Should your email marketing materials make it past the Google and Microsoft spam overloads, you’re competing for a consumer’s attention in a digital landscape that is filled with noise. And this email problem isn’t as simple as slapping a promotion in the subject line. Nearly three-quarters of all consumers expect free shipping and the rise of coupon finders like Honey and Rakuten have made sales and promotions essentially a dime a dozen. Creating email content and subject lines that work has become a money pit for some retailers enticed by the fact that marketing email open rates actually jumped by 18% on mobile in recent years. But is this open rate upstick a mirage? Well, it depends on how you think about the entire customer journey and the buzzword du jour touchpoints.

24% blamed organizational or cultureal indifferences

towards technology

Nearly half of all forwarders surveyed blamed

technological limitations as a pain point

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05Data standardization is now a cultural issueLack of awareness is a significant deterrent to data standardization

The discussions on data quality go hand-in-hand with data standardization, as disparate data that do not conform to a particular set of standards will be essentially unusable. Data standardization has been a big hurdle for decades, right from the 1980s when EDI became popular within supply chains.

There have been several reasons for companies to remain skeptical of adopting data integration tools. While implementing might sound complex, especially across massive forwarding organizations, the return on investment (RoI) is quick, freeing up human resources and assigned to truly human-intensive environments.

However, there is still a prevalent lack of understanding of the utility of standardization, and even in spotting differences in EDI and API technologies. A quarter of the respondents stated they have minimal understanding of the differences, while another 9.1% mentioned a passable knowledge of the technology.

That said, a quarter of the respondents also stated to have a comprehensive understanding of the technology. As conjectured before, the industry today is no longer technology-reticent compared to a decade ago, making greater strides with adopting technology.

We see an industry at the crosswires of businesses that trust technology and the ones that are still skeptical—made evident by overall API/EDI adoption rates.

Roughly 45% of the respondents mentioned their organization to have integrated with suppliers through API or EDI, an equally sizable number of companies (43%) said they have not integrated yet. While the responses to API adoption and integration with suppliers seems like a statistical stalemate, it need not be so. Comparing responses on the urgency of API integration shows only 7.6% of the businesses thought it was unnecessary. By cross-comparing these two data points, it can be analogized that the industry is in the midst of a transition to APIs at-large.

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06The logistics industry has been familiar with EDIs for a while now. Aren’t APIs basically the same thing?You wouldn’t be brought to book for confusing APIs with EDIs because in many ways, they do the same exact thing. Both are essential pieces of the B2B data exchange machine, especially when it comes to supply chains. The decision between the two is less of a binary and more of a blend, with many organizations choosing to utilize a combination of the two so as to maximize the strengths of each. Depending on the size and scale of data transmission, IT teams can judge which of the two options or what combination of the two will work best between partners. Currently, data exchange via EDIs are extremely embedded in the logistics ecosystem with upto 85% of supply chain data transmission relying on them. However, Gartner estimated that by 2023, 50% of transactions will be through APIs. This also means that 50% of all transactions would continue to be supported by EDIs hence they aren’t going anywhere anytime soon. Companies need to support both or risk missing out on important opportunities to drive revenue, growth and competitive differentiation.

Across the logistics industry, a core set of EDI transaction formats have been widely adopted to support core business processes. Contrary to what some believe, EDI isn’t inherently too antiquated to be efficient — its infrastructure has come a long way since its inception, adapting to evolving industry-specific requirements and commerce laws. When optimized correctly, EDI integration can offer huge benefits for your communication with partner organizations. At the same time, EDIs may not be available for small to medium-size businesses as the cost and time to implement them is significant, while APIs are generally fast and cheaper. APIs also shine when it comes to providing a real-time two-way communication between partner platforms as opposed to EDIs which require that files be written, sent and read, and then responded to in similar fashion as they can only transmit data with formats such as ANSI, EDIFACT, TRADACOMS, VDA, XML, or UBL. The pandemic has certainly accelerated the industry’s need for more real-time

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communication options. However, because of an API’s ability to transmit data between systems without the need to change their data format, they pose more of a security risk as opposed to EDIs.

Choosing between EDIs and. APIs for platform integration boils down to what works best between the partner organizations. Fortunately, you don’t even need to choose or invest in a separate infrastructure to use APIs. The approach nowadays is to augment EDI capability with that of APIs to provide more context to the B2B integrations of your digital logistics ecosystem. Using a mixture of both models may allow you to maximize your exchange data capabilities. A blended solution allows you to leverage resources that are already in place and performing well and build on what you have to meet all your business requirements and capitalize on the availability of emerging data sources. A B2B integration backbone that handles EDI natively and can extend to include API connectivity provides an all-in-one approach that is efficient, effective and optimizes collaboration with all your trading partners.

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07Four benefits that are increasingly hard to ignore1. REAL-TIME DATA EXCHANGEAPIs enable the exchange of data in real-time, making it easier to provide accurate shipping quotes, view equipment capacity, book freight, track shipments at any point along their journey and address any issues that may arise.

2. CLOUD-BASED AND ON-PREMISE SOFTWARE INTEGRATIONAPIs enable companies to transition from on-premises custom solutions to cloud-based applications, allowing the various digital platforms to seamlessly speak to each other.

3. POWERFUL PROCESS AUTOMATIONAPIs allow you to automate processes within your own system, combining your data with data from other sources. This removes manual processes and saves time that would have otherwise been spent searching for information and making routine decisions.

4. BETTER DECISION MAKING, ENHANCED CUSTOMER INTERACTIONS APIs provide easier and faster access to more data with scope for advanced scalability. This leads to better decision making and more business intelligence creating more clarity with regards to a customers’ needs. Most importantly, it also provides more time to focus on important things, like communication, building relationships and process optimization, rather than pushing paper.

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08The first disruption

Human-intensive operations likely the earliest workflows to be API integrated

Respondents pursuing data integrations do so by standardizing workflows within their organization in line with other industry stakeholders—both upstream and downstream. Often, these workflows tend to be human-intensive operations, considering person-to-person contact is the lynchpin of a forwarding business. Digitally integrating human-centric workflows reduces error occurrence while notably expediting operations.

Freight capacity booking is by far the most popular workflow to be standardized, with one in two forwarders stating to have integrated this process with their suppliers. Processes like quoting, tariffs, and booking are also workflows that generate interest amongst forwarders to be integrated under an API.

Invoicing is another crucial operation that is standardized, with 31.4% of the respondents stating it needs API integration. This is expected, considering invoices are often the subject of needless complications. With invoices and contracts like the bill of lading (BOL) largely handed out as physical documents, the information written on it needs to be checked with extreme care.

Even then, mistakes are commonplace as it is tedious to process and humans could err. By digitizing invoices, standardizing them with a fixed format across the value chain, and providing best practices on entering listings, stakeholders can eliminate inconsistencies within the process.

Invoicing apart, 37.2% of the forwarders also used APIs to provide shipping instructions to their logistics service providers (LSPs). For forwarders, providing precise shipping instructions is key, thanks to the strict guidelines their clients—like big-box retailers and e-commerce companies—put in place. Shipping regulations like Must Arrive By Date (MABD) and On-Time In-Full (OTIF) are tightening time windows, forcing shippers and the carriers they order to be mindful of their delivery requirements. By ensuring shipping instructions are standardized and pushed to carriers via APIs, forwarders can breathe easy as data integration removes the need to cross-check instructions at every step of freight movement.

Based on the many benefits of API adoption, understanding the urgency in adoption amongst the forwarding community is of importance. The survey saw interesting results. 32.8% of the respondents mentioned they were looking to adopt (or have already adopted) APIs, and a further 31.1% said they were thinking about API integration now. On the opposite end of the spectrum, 28.6% of the respondents remained unconvinced, stating that they might think about it in the future, but it does not concern them now.

While the opportunities that herald API integration are plentiful, the process of API adoption across the logistics ecosystem is riddled with complexities. For one, inter-tier stakeholder data sharing suffers from collaborative friction, with trustability between different stakeholders being an issue. 35.5% of the respondents mentioned that confidentiality clauses stop them from sharing critical operational data. Data accuracy is also a bottleneck, as inconsistent data erodes the possibility of seamless integration. Technology incompatibility is another critical issue, as 28.9% of the respondents contend with this problem.

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09There’s more low hanging fruit

Improved visibility and operational efficiency are low-hanging fruits of API adoption

Two in three forwarders looking to adopt APIs mentioned that gaining better visibility into shipment status and improving their overall efficiency were the fundamental expectations they had from their suppliers. Visibility and efficiency have been recurring themes within the survey, reflecting the positive correlation forwarders see with API integration.

That aside, 43.8% of the respondents stated that the data they gain from integration was critical, as they claimed to use the information to build on their own intelligence. 38.8% of the forwarders said they expected more supply chain resilience after API adoption. Resilience would be a byproduct of improved visibility and inter-tier stakeholder relationships, as this helps businesses stay informed on demand-supply patterns and adapt accordingly. In line with the resilience idea, half of the respondents contended that speed and security were essential attributes they see in their API adoption.

Forwarders go through considerable deliberation before choosing vendors for their API integration, basing their decision on a number of factors. Great customer support is by far the most critical parameter, with 65.3% of the forwarders mentioning this to be a vital trait they look for in their vendors. End-to-end integration capability came a close second, with 57% of the respondents feeling this to be necessary, to ensure they have unobstructed visibility into freight movement.

While customer support and integration were primary talking points, forwarders seemed to vary considerably in their vendor expectations, with roughly one-third of the respondents opting for vendors with a business legacy, services variety, and flexible pricing models. A further 21.5% of the respondents wanted SLA guarantees from their API suppliers.

In essence, the survey helped put a spotlight on the overall interest that API integration has generated amongst the forwarding community. Considering that two in three respondents understand and prioritize API adoption, it can be justified that the discourse on the importance of data standardization and integration is not lost on forwarders.

API adoption can bring about extensive benefits. Integration makes it easier to collaborate with stakeholders, streamline data, leverage data-based insights, gain visibility into shipment movement, and finally, build robust operations that can stay their course even in a chaotic market. A tight-knit integration accorded by API adoption across both upstream and downstream operations will help stakeholders gauge existing volatility and fireproof workflows, eventually resulting in well-balanced supply chains.

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10How can you start using APIsin your business today?To make the most of all APIs have to offer, shippers need to be thinking about how to take their current systems into the future.

APIs are everywhere and continue to evolve, so it is important to begin working with your IT departments now to adapt systems, ensuring your current technology platforms and infrastructure are ready for the exciting future that lies ahead.

Make sure that your choice of software and technology is not limiting you from taking advantage of newer APIs where appropriate. For, example, there was no EDI transaction for a rate which can now be done by API. Compare that with status messages which have been around forever with EDI and it may still be fine to be handled that way.

ECU360 now offers an API Suite of its own.

Optimize your logistics workflows by seamlessly

integrating your ERP with ECU360 using APIs.

Eliminate the need for repetitive emails and

phone calls whilst feeding data directly to your

systems. Save time, reduce the risk of mistakes

and get full control and visibility of your cargo.

“With its state-of-the-art digital platform ECU360, ECU Worldwide offers small and mid-sized businesses the opportunity of API integration. So, ECU360 is implemented into their existing systems and platforms and they can draw from ECU360’s global network and information without needing to log out of their existing systems and log in to another. This can truly help them scale up and succeed in today’s ever-dynamic and constantly evolving business landscape”, says

Dr. Philip Blumenthal,Chief Transformation Officer,ECU Worldwide.

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(30.6%)

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Real World Example of API Implementation

ECU360’s hassle-free onboarding

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Developer Portal

You will be guided to our API Developer Portal where you can review the technical documentation for our API Suite.

Subscribe to Sandbox

Your developer subscribes to our sandbox (test environment).

Testing

Your developer tests API connections in the test environment.

Discovery Call

Our API relationship team will schedule a brief call to understand your use case, better associate you with our API Suite, and determine how best it will fit with your company.

Go-Live with API!

You can now subscribe to the production APIs. Once this setup is complete, you will receive an email confirmation with your production subscription keys.

Setup & Approval

Once setup has been completed, we will approve your sandbox subscription and you will receive an email with the API subscription keys.

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ECU360 delivers a customer-centric digital logistics experience that is capable of performing end-to-end shipping services at the click of a button.

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