Technology and logistics are almost inseparable to most people. The idea of connecting a shipment to a third-party rating software or other business intelligence tool is a given in modernity. It’s so commonplace that we don’t even realize how far the industry has come, yet the value isn’t finite.
As few as seven-years ago, less than one-third of shippers had adopted cloud-based solutions. Today, 96% of carriers and 86% of shippers have tapped these off-site technologies, reports Food Shippers of America. Almost all of them have an API that allows for faster and more efficient sharing of data. In turn, the data promotes clarity in supply chain management. Thus, the future of freight truly does rest on APIs, and it’s important to understand some of the facts around API technology in logistics.
The rise of APIs in logistics
APIs have become a cornerstone in modern logistics, allowing disparate systems to communicate and share data in real-time. They’re built into many of the systems everyday workers in the supply chain use.
This connectivity enhances operational efficiency and provides a comprehensive view of the supply chain. According to a report by MarketsandMarkets Research, the global market for APIs is expected to grow at a CAGR of 25.1% from 2022 to 2027.
- Growth of API usage - The logistics sector has seen a significant increase in API adoption, driven by the need for better integration and automation. According to various sources, more than 50% of B2B transactions are now facilitated by APIs.
- Efficiency improvements - APIs enable real-time data exchange, which reduces manual processes and improves operational efficiency. A 2017 study by McKinsey found that companies using technology to improve agility, including APIs, reported a 20-30% increase in efficiency.
- Cost savings - By automating processes and improving data accuracy, APIs can significantly reduce operational costs. Further, implementation of APIs helps shippers realize simplification and accelerated development.
But, what do these opportunities mean in the real world of freight?
Real-world application of APIs in logistics
APIs are being utilized across the logistics industry to automate various processes, improve data accuracy, and enhance visibility.
For instance, APIs enable real-time tracking of shipments, dynamic route optimization, and seamless integration of different logistics platforms. The application of APIs is also directly tied to supply chain optimization.
Using data, today’s companies can realize cost savings across all modes of transportation–from the first to the final mile. The biggest opportunities tend to reside within the longer parts of logistics–the legs in which long hauls occur.
Consider this scenario. A shipper moves a load from Bismarck to San Antonio. Without data, the shipper is only focused on the headhaul–the movement from Bismarck to San Antonio. Applying data, the shipper could look for nearby consolidation opportunities in The Lone Star State for backhauls. As a result, the shipper avoids putting deadhead on the carrier, and the shipper realizes lower overall costs.
Of course, this is only a fraction of the possibilities, considering all the different data points that feed into APIs. Freight classification, billing data, and virtually any other point could be used. In fact, applying APIs in such a context has already been shown to save tens of thousands on freight spend for existing IL2000 clients too.
Be part of the API revolution by putting IL2000’s API-based tech to work
The future of freight logistics is being shaped by the widespread adoption of APIs and cloud-based supply chain solutions. Enabling seamless integration and real-time data exchange, APIs are transforming logistics operations, driving efficiency, and reducing costs. As the industry continues to evolve, leveraging APIs will be crucial for businesses looking to stay competitive and innovative. But that also comes with the burden of developing and maintaining APIs, unless you have an advocate that’s handling the tech side of logistics for you. That’s why IL2000 truly goes beyond logistics.
Connect with an IL2000 team member to get started today.