Barbara Babati 11.07.2019 16 min read

Why Freight Tech Companies Use Data Integrations to Gain Strategic Advantage

Today, FreightTech companies are in the focus of logistics publications, events, and conferences. While it’s still a niche space, it shouldn’t be underestimated. According to Fregithwaves, in the first quarter of 2019, VC invested 1.6 billion US dollars in FreightTech companies. For comparison, in 2018, the amount was 2.9 billion US dollars.

The timing is right. Global trade is in a shifting mode when key industry players need to embrace digital to remain relevant. In our article on the 2019 global logistics trends, we predicted that data-driven logistics, supply chain analytics, IoT, artificial intelligence (AI), or machine learning (ML) would have an important role to play in reforming logistics and supply chain as we know.

FreightTech companies took up on the challenge. While some of them provide solutions to enable organizations to reshape their operations for further efficiency, others developed completely innovative digital solutions, services, and platforms to take global logistics to the next level.

Some of these innovators have an excellent chance to shake up the market and logistics as we know it today. To do that, they need to deliver exceptional solutions. To deliver the solution that logistics needs, FreightTech companies must operate with exceptionally focused strategies so that someone else won’t beat them to the market.

Data is the key to success

The disruption that is happening in the logistics space heavily relies on data.

FreightTech companies understood it, and they embraced the idea of creating their solutions that revolve around data. The utilization of the available data requires the right infrastructure. This is where data integrations become essential. It’s not only that FreightTech companies need to have real-time data from disparate sources, but they also need to make sure that the data quality (hygiene, accuracy, and relevance) is spot on.

Perhaps, the biggest question for some of the most innovative and high-growth FreightTech companies is how they balance the development of their own tech while setting up connectivity with multiple parties to interact with each other and receive sufficient, timely information.

After all, data integration projects have been known to fail and consume an enormous amount of resources both in terms of human resources and cash.

As a data integration provider, we understand the integration challenges that FreightTech companies face. Time is of the essence: you need to set up the connections quickly and get the data to your application as fast as possible. Over the past year, we’ve been working some of the most innovative FreightTech companies, helping them realize their mission and vision by fueling them with all the data they need and tackling their connectivity challenges.

We will look at how data integrations can have a critical role in enabling FreightTech companies to accelerate their time-to-market and gain a competitive edge. We will elaborate on why obtaining information in a world of APIs is more complicated than you would think and when it makes sense to outsource the development and maintenance of data integrations to a strategic partner. In the end, we will briefly look at a case we’ve been working on with Loadsmart, a US-based FreightTech company that took up the mission of automating truckload bookings for more efficiency.

Connectivity and real-time data to accelerate time-to-market

While FreightTech is still a niche space, and we expect more important players to emerge by 2025, there are quite a few companies that are ready to disrupt the market. Having a good product is not enough when the competition is immense. Certain areas are more popular than others, and several startups are competing for market share. In addition to ambitious new companies, legacy businesses are also interested in digitalizing specific processes and operations.

So, how can FreightTech companies succeed?

First of all, an excellent product is essential. Having a unique idea and an excellent roadmap for the execution, as well as an exceptional team of engineers, are vital components. Nevertheless, we think that a fast time-to-market is essential. Still, when your business model relies on getting real-time data from multiple disparate sources, you need to consider integrations as the utility that fuels your solution.

While this may sound simple, it can be a daunting task to balance it all: developing a state-of-the-art product and ensure that the data is flowing in from all the sources, so that the tech would work flawlessly.

Integrations do more than simply just fuel your application with data: in many cases, the underlying integration logic enables you to automate certain processes, thus completely removing human intervention for more efficiency.

In the end, it’s a strategic decision for many: do you focus on developing your product? Or do you focus on ensuring that all the data sources are connected? Can you do both at the same time with limited resources?

Integrations can play a strategic role

It can be a challenge to balance both perfecting your solution and ensuring that all the integrations run flawlessly.

Whether you build integrations or outsource them depends on your business model and on the complexity of the connections you need to develop and maintain.

In case you only need a few connections, you may be able to do it by yourself. However, when you have more than three point-to-point connections, maintenance can be demanding.

If you need to create tens, hundreds, or even thousands of connections with your stakeholders, you will need to have the right integration tool, as well as the engineering resources. In the age of transformative technology and APIs, you could think that it’s easier than ever to create connections. While the fact that logistics has started accelerating the adoption of APIs is a positive thing, the industry is still mainly running on legacy technologies.

Legacy technologies vs. APIs

Logistics is still a fragmented, siloed industry. Some of the applications and processes are frankly somewhat archaic.

So, while innovative FreightTech startups have APIs, and they expect to receive all the information through them, creating the connectivity between APIs and the applications of all the other stakeholders can become quite a headache.

Even if on the other end there’s an API, the API may be poorly documented, thus developing the connection can be difficult. Another issue could be that even if both APIs use the same format (e.g., JSON or XML), the data fields can be different. That means that you cannot avoid data mapping to match the right fields. Also, if changes happen in the other API, you may need to do some maintenance work so that you still receive all the data you need in real-time.

And it just gets more complicated than this. When on the other end, there is an application or system that does not communicate through APIs, but traditional communication protocols (e.g., FTP, SFTP, HTTP, HTTPS, etc.) then it can get a lot harder to implement the connectivity between the two or multiple endpoints. In case, the system on the other end is a legacy on-premise one, the challenge will be next level. And then there is a variety of systems and applications, such as TMS, WMS, TOS, ERP, and more.

Earlier, we wrote about encountering EDI as your trading partner’s communication tool when you’re using APIs. If that’s something you’ve experienced, you should check out or bookmark the article.

Then there will be all the other integration challenges to tackle: creating the logic for the integration, different formats, such as EDIFACT, X12, in-house formats, structured and unstructured data, and so on. You will need to have rules for data harmonization and data mapping, and in some cases, you may want to have business rules for data validation and enrichment.

So why APIs are great, you should acknowledge that they are not the cure to all the integration challenges that you will have to stumble across.

Real-time data is a top priority for Loadsmart

Just recently, we published a case study on our cooperation with Loadsmart. The Loadsmart case is an excellent manifestation of all the above written.

Loadsmart is one of the coolest companies on the FreightTech market now. Their tech is about completely reshaping the trucking industry by improving truckload booking through their platform that utilizes artificial intelligence and machine learning. Loadsmart relies on real-time data so that shippers can get the best quotes instantly, and trucking companies can optimize their loads.

Instead of doing integrations on their own, Loadsmart decided to partner with Youredi so that they could focus on the development of their technology. In this case, Youredi develops, deploys, and maintains challenging integrations between Loadsmart and the parties that use their solution.

If you want to learn more about the Loadsmart case, head over to the case study where we explain in more detail the challenges that Loadsmart had, what solutions we developed for them, and how they benefit from outsourcing integrations.

Build or buy integrations?

Certainly, each case is different. While some may need a simple and limited number of connections, others may need to create hundreds of complicated integrations across a variety of applications.

You should have an internal meeting and map out all the integration work that you need to do within a given time. You should clearly understand what challenges you’ll face. Is there a variety of applications, both cloud-based and on-premise one? Do you need to connect legacy technology with your API? How many connections do you need? Do you need to harmonize data formats? Is there a need for data mapping? Do you need to automate processes?

Also, do you have the right tools and integration experts? You should also calculate what would it cost to do the integrations yourself and what would be the price tag if you outsourced? After all, integrations can have a severe impact on your gross margins.

From our perspective, outsourcing has a lot of benefits that we have also seen through a couple of customer cases. Perhaps, a FreightTech company, the most important advantage of outsourcing integration development is that they can focus on creating an outstanding solution to empower your customers. Working with a partner that has extensive experience in tackling challenging integration scenarios and understanding also logistics can seriously speed up your time-to-market by quick onboarding all the parties you work with.


Recommended reading: 

E-book: Transportation & Logistics Execution: Gaining the Competitive Advantage

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