What does API mean for Shipping?

A series of scandals that led large international groups to write off sums exceeding US$ 500.000.000 (500 million) on building our in-house solution, brought many to the need in rethinking their digitalization strategy.

One of the most common words searched by internet users related to shipping and transportation is “API” or “API integration”. Not many, however, know what this means exactly. And this leads to losses and fundamental mistakes in choosing the right digital strategy.

Imagine your existing business system (corporate software or service) lacks a certain feature or data. Some may want to pay for additional software or online service, that contains such data. Others may want to spend money and build their in-house data source. Both options may prove to be expensive and inefficient. The best solution to fill the gaps of certain data is through API integration. Using several sources of the same, through APIs, however, is an even more reliable way towards reliability and sustainability.

An Application programming interface (API) is an interface that defines interactions between multiple software applications or mixed hardware-software intermediaries.

API defines:

  • the kinds of data calls or requests that can be made
  • the way such data calls made and the formats that should be used
  • the conventions to follow
  • etc

API can also provide extension mechanisms so that users can expand existing functionality and define the options and degrees of such extension. It can be entirely custom, specific to a component, or designed based on an industry standard to ensure interoperability.

API can allow programs written in one language to use a library (data) written in another. This way a customary Corporate solution can collect, use and display data that is stored on other platforms, software or web services. Web APIs are also used for interactions between an enterprise and applications that use its assets.

The design of an API attempts to provide only the tools a user would expect. Shipping APIs would allow corporate users to upload shipping-related data into their existing business systems and platforms. The possible data that could be useful for companies in shipping and transportation are:

  • Freight rates (Delivery Prices)
  • Fleet positions
  • Open Fleet positions and Schedules
  • Bunker Prices
  • Port Data and Restrictions
  • Port Line-ups
  • Sanctions and Port State Control Data
  • ERP data
  • etc

In the early 2000s, web APIs saw their widespread commercial adoption. This trend and its accelerated growth continues up to now.

There are, however, problems with API integration as well. APIs integration with some solutions, platforms, and services may be quite expensive. Some, however, may agree to provide free, or relatively inexpensive APIs in exchange for other data or in an attempt to benefit from cross-sales.

An important factor when an API becomes public or used by individual clients is its “interface stability”. Changes to the API — for example adding new parameters to a function call — could break compatibility with the clients that depend on that API.

Nevertheless, quite many companies, especially larger ones, continue making one common mistake. In an attempt to build an “all-in” solution, they find themselves involved in building an in-house database, library, or solution. This regularly leads to excess costs and, sometimes, failure to reach required perfection. Custom-built databases and solutions may lack updates, and, therefore, may end up being outdated.

We spend about 1.000.000 a year building our own solutions, and this process is a never-ending story — said a CEO of a large shipping group

Similar incidents are not uncommon.

We spent over US$ 515.000.000 (515 million) on building our in-house solution on SAP, and eventually had to stop and write these expenses off — said a senior manager at DHL.

A similar incident happened with Lidl, who allegedly sunk over $500.000.000 (500 million) before deciding to return to the old solution.

A Chief Innovation office at a large commodity trading firm, who earlier refused an offer by a famous UK-based service providers, said:

“I was offered a handsome kickback to accept the offer, and yet I knew that building a corporate solution from scratch is going to put my company in danger”

This is should serve as a signal for SAAS (Software as a Service) solutions and shipping applications. One-size-matches-all may not be the best way forward. Offering a white-labeled interface, while helping build an API integration with other ready-made services and data sources, a concept introduced by Shipnext, may prove to be the best way forward.

The key advantage of such a solution is the AI-powered algorithm used by Shipnext. Shipping-related data is sourced from emails with the help of Natural Language Processing and machine learning, to help populate the platform with real-time data on top of that which is sourced through API.

One thing is certain. SAAS solutions that are not ready for interoperability, and the use of several isolated digital services will soon become a thing of the past.