Advantages of Direct EDI Integration for 3PL Warehouses

Advantages of Direct EDI Integration for 3PL Warehouses

With over 20,000 3PL warehouses in the U.S., competition for clients is fierce. In order to not only compete but also to provide the world-class service that brands expect, a warehouse must leverage modern EDI platforms. Leveraging technology isn’t just to keep pace, but to gain a competitive edge. EDI is one of the most vital systems for managing transactions and data with suppliers and customers.

While many 3PLs currently rely on outsourced EDI solutions or client connections, directly integrating with a modern platform like Crstl unlocks strategic advantages that can elevate warehouses to the next level.

What is EDI for 3PL Warehouses?

3PL EDI stands for Third-Party Logistics Electronic Data Interchange and refers to the electronic exchange of business-critical data and documents between 3PL warehouses and their customers.

EDI provides the foundation for seamless communication and data exchange within e-commerce retail and marketplace order workflows. Both brands and retailers expect strong technology, but also need fast onboarding and testing and access to quality customer service tools. As expectations accelerate, EDI gives warehouses and 3PLs the speed, accuracy, and agility needed to compete.

As e-commerce grows more complex, EDI integration has become an essential enabler for success. Many warehouses are reliant on client connections, manual transmission of orders, labels and ASN’s via email, or are using partnerships that are provided as part of their WMS systems. Workflows like this are inefficient and error prone. To provide top quality services to the brands they work with, a warehouse needs to level up their technology.

Efficient processing of orders, speedy inventory updates, and fast invoicing are just a few examples of how deeply ingrained EDI is in daily warehouse operations. 

Drawbacks of Outsourced EDI and Client Reliance

In the past, directly integrating EDI was often considered too expensive and technically demanding for many 3PL warehouses. Just the testing process alone for onboarding a new trading partner is onerous and time consuming. Warehouses tend to focus on their sales teams and their warehouse floor teams, while leaving the IT and additional services to their WMS provider. Outsourced solutions or reliance on client connections emerged as common workaround approaches.

However, these approaches come with inherent drawbacks:

  • Dependence on external systems hampers the agility required in fast-moving e-commerce.
  • Lack of control over systems and processes, you are at the mercy of other platforms and partners for issues, troubleshooting, and fixes.
  • Lack of customization to meet specific workflow needs means the warehouse can’t offer the brands the flexibility required to onboard new trading partners quickly.
  • Increased vulnerabilities from data passing through more hands.
  • Long-term costs from third-party fees can exceed direct integration costs.
  • Inability to quickly adapt to customer demands or supply chain shifts.
  • Risk of churn: a customer who wants to move can just switch their EDI connection without the warehouse having input and the ability to improve the relationship and prevent churn.

Advantages of Direct EDI Integration

The limitations of outsourced and client-dependent EDI are always going to hold a warehouse back. Forward-thinking 3PL leaders are pivoting to direct integration solutions that deliver greater control, customization, and cost-efficiency.

Direct EDI integration equips warehouses with data capabilities tailored to their requirements, not constrained by external systems. With the right solution, integrating EDI can be achieved without major technical hurdles or resource investments. Having their own access to the order and EDI data also allows a warehouse to provide value added services to their clients in terms of chargeback & deduction defense, metrics on sales data and velocity and are also able to use that data to effectively plan internal operations. 

This represents a strategic shift from outdated or onerous systems. Direct ownership of EDI gives 3PLs the agility and optimization to excel as e-commerce logistics partners and an extension of their client’s operations department rather than just being another vendor. A true partnership will increase revenue and equally important, retention.

Crstl: The EDI Software Built for 3PLs

So how can warehouses directly integrate EDI for maximum impact? That's where Crstl comes in.

Built as a cloud-based Software-as-a-Solution (SaaS), Crstl provides 3PL providers with the features that matter most:

  • Intuitive user interface - Easy to implement without extensive technical resources.
  • Enterprise-level capabilities - Robust EDI integrations on par with top corporations.
  • Pre-built connections - Seamless transactions with thousands of trading partners.
  • Scalability - Platform grows as your business volumes grow or partnerships expand.
  • Control - Vital for the 3PL to be able to quickly adapt to client or market demands.
  • Cost efficiency - Direct integration can be more cost effective, eliminating markups and reducing dependence on external partners.
  • Data Security - Direct integration minimizes data touchpoints and ensures your client’s sensitive information is secure.
  • Transparent pricing - No hidden fees. Pay only for what you need.
  • Responsive support - EDI experts provide guidance and issue resolution.

The Future Is Direct for 3PL EDI

By partnering with Crstl for direct EDI integration, 3PL warehouses gain the visibility, control, and customization needed to thrive in competitive e-commerce fulfillment. Additionally, a warehouse can use this partnership as a profit-center, managing their client’s EDI connections and providing additional services. 

Crstl allows the warehouse teams to focus on their core strengths of WMS, storage, packing and efficient shipping. Adding trading partners is easy. The integration process is guided every step of the way by EDI specialists, making onboarding smooth and low risk. Ongoing management is simple with Crstl's user-friendly dashboard.

And, the industry is noticing our cutting-edge work. named Crstl as the top EDI platform in 2023. What are you waiting for? Reach out to Crstl and together let's increase the size of the pie in our corner of the world.


Bonus Section: EDI for 3PL Frequently Asked Questions

What is EDI for 3PL Warehouses?

Q: What is EDI?

A: EDI, or Electronic Data Interchange, is a technology that allows the exchange of business documents and information in a standardized electronic format between trading partners, such as 3PL warehouses and their clients.

Q: How does EDI benefit 3PL warehouses?

A: EDI streamlines operations, reduces manual data entry errors, enhances data accuracy, speeds up business transactions, improves inventory management, and strengthens partnerships with clients by facilitating more efficient and reliable communication.

Implementing EDI in 3PL Warehouses

Q: What documents are commonly exchanged through EDI in 3PL operations?

A: Common EDI documents in 3PL operations include purchase orders (EDI 850), advance ship notices (EDI 856), invoices (EDI 810), warehouse shipping orders (EDI 940), and warehouse stock transfer receipts advice (EDI 943).

Q: What are the first steps to implementing EDI in a 3PL warehouse?

A: The first steps include assessing your current business processes, identifying the EDI standards that your clients use, selecting an EDI solution provider, and integrating EDI software with your Warehouse Management System (WMS).

Technical Aspects of EDI for 3PL

Q: Do 3PL warehouses need specific software for EDI?

A: Yes, 3PL warehouses require EDI software or an EDI service provider that can integrate with their existing Warehouse Management Systems (WMS) to facilitate the electronic exchange of documents.

Q: Can EDI systems integrate with all types of Warehouse Management Systems?

A: Most modern EDI systems are designed to be compatible with a wide range of WMS solutions. However, the level of integration complexity can vary depending on the specific systems in use. It's important to consult with your EDI provider and WMS vendor.

Common Challenges and Solutions

Q: What are common challenges faced by 3PL warehouses when implementing EDI?

A: Common challenges include data mapping errors, integration complexities with existing systems, adapting to various EDI standards and formats used by different clients, and training staff to manage EDI processes effectively.

Q: How can 3PL warehouses overcome these challenges?

A: Overcoming these challenges often involves thorough planning, engaging with experienced EDI providers, conducting extensive testing before going live, and investing in staff training.

Future of EDI in 3PL Warehousing

Q: Is EDI being replaced by newer technologies in 3PL warehousing?

A: While newer technologies like API (Application Programming Interface) are gaining traction, EDI remains a staple due to its widespread adoption and standardization. Many businesses use a combination of EDI and API to leverage the strengths of both technologies.

Q: How is EDI evolving to meet the future needs of 3PL warehouses?

A: EDI is evolving through the integration of new technologies like blockchain for enhanced security, AI for smarter data processing, and APIs for real-time data exchange. These advancements are making EDI more efficient and adaptable to future logistics challenges.