How EDI changed for Shippers from its first year

  February 14, 2012       By Ray Atia
How EDI changed for Shippers from its first year? Each carrier was asked to indicate how its number of EDI shippers has changed or is expected to change from its first year of EDI use to the current year, from the current year over the next two years, and over the next five years. None of the respondents indicated a decrease in use for any of the time periods. More than 96% of the respondents expect the number of shippers with whom they conduct EDI to increase or increase significantly within both two years and five years. The percentage of the motor carriers 1989 freight revenues that came from their EDI partners ranged from one percent to 60%, with an average of 15.2% and an approximate median value of 10. The LTL and TL carriers were very similar in terms of the ranges, means, and median values of freight revenues which came from their EDI shippers. Carriers also were asked to indicate the percentage of paper transactions they have replaced with EDI and the percentage of transactions they anticipate replacing with EDI in the next five years. Although most transactions still occur without EDI, the data in Table 4 suggest that carriers expect this to change in the next five years. (Table 4 omitted) In addition, the data suggest that the TL carriers have substituted EDI for paper transactions to a greater extent than the LTL carriers. In five years, however, the two groups are expected to have replaced similar percentages of their paper transactions with EDI. Carriers were asked to identify which format standards they were currently using and those which they intended to use within the next five years. An EDI format standard consists of rules for translating one or more business documents into electronic messages. Multiple responses were allowed. The TDCC/EDIA format standard is currently used by the majority of respondents (44 out of 78 or 91%). The TDCC/EDIA format standard, the first EDI standard, was developed specifically for the transportation industry. Significant, however, is the finding that no shipper currently not using the format standard anticipates adopting it within the next five years. In contrast, 17 new users of the ANSI ASC X.12 standard format are anticipated within the next five years. The ANSI ASC X.12 format standard is a generic EDI standard designed to allow a company to exchange data with any other company, regardless of the industry. A relatively large number of respondents (44 out of 78 or 56%) currently use firm-specific proprietary formats. Firm-specific proprietary formats can be carrier-specific or shipper-specific. Carrier-specific formats refer to a carrier-developed format to be used by shippers that have not indicated a special format. In contrast, a shipper-specific format is designed to be responsive to the special needs of the shipper (e.g., the shipper has an existing EDI format or requires more or different data). The current use of formats developed for specific shippers was extensive (34 out of the 78 respondents or 44%), but the respondents anticipated only a small number of new users within the next five years. The respondents now using shipper-specific anticipated a decrease in their use of this type of proprietary format within the next five years. Individual carriers used proprietary formats with an average of 77.8 shippers. The median value for the number of shippers, however, was only approximately one, indicating that at least half of the carriers have a specific format with one shipper only. The number of different formats varied between 1 and 15 (with an average of 2.8 and an approximate median of 2), suggesting that carriers are not burdened with a large number of different shipper-specific, proprietary formats.