What is EDI and Why is it Important? What is EDI and why is it important? * annie phan. June 23, 2026 What is Electronic Data Interchange (EDI)? Imagine a warehouse team manually keying in hundreds of orders, emailing carriers for updates, and trying to track shipments across multiple systems. A single typo in a PO number or address can delay a shipment or cause costly errors. This is exactly the kind of problem Electronic Data Interchange (EDI) was built to solve, and it does so by replacing that manual back-and-forth with a standardized digital language that allows different computer systems across the supply chain to communicate without human intervention. Instead of sending emails, faxes, or making phone calls, companies use EDI to transmit business documents directly between systems in a universally understood format. In the freight and logistics context, EDI enables shippers, carriers, and warehouses to exchange information in a structured, machine-readable format. Freight EDI communicates using specific, numbered "Transaction Sets" - standardized formats so that a shipment tender sent from a shipper's TMS can be automatically understood and processed by a carrier's dispatch system, regardless of what software either party uses. Why is EDI important? Without EDI, the day-to-day reality for most logistics teams looks something like this: spreadsheets that are out of date the moment they're saved, inboxes full of carrier emails, and manual data entry that leaves plenty of room for mistakes. As order volume grows, this becomes nearly impossible to scale. Implementing EDI brings several massive advantages: * Accuracy: Manual data entry produces errors - wrong addresses, transposed weights, and incorrect PO numbers - that lead to missed pickups, misrouted freight, and billing disputes. Machine-to-machine exchange eliminates re-keying and the errors that come with it. * Volume and speed: EDI lets a TMS tender thousands of loads automatically based on routing guides and receive responses within minutes. * Cost Reduction: Automating communication drastically reduces the administrative overhead associated with dispatching, tracking, and billing. * Trading partner requirements: Major retailers (Walmart, Target, Amazon, Home Depot) and large shippers effectively mandate EDI compliance - including specific labeling, ASN timing, and chargeback rules - as a condition of doing business. A supplier or carrier that can't support EDI is locked out of much of the market. * Real-time tracking: With EDI, status events flow automatically through systems, giving location information in an instant. One of the most critical documents in the EDI order process is the Advance Ship Notice (ASN), transmitted as an EDI 856. The ASN tells the receiver exactly what is arriving, how it is packaged, and how each carton or pallet is identified - typically via SSCC codes that tie back to the physical labels on the freight. Retailers rely on the ASN to plan dock scheduling, labor, and putaway, and missing or inaccurate ASNs are a leading cause of compliance chargebacks. EDI with ShipHawk ShipHawk's Warehouse Management System (WMS) integrates with NetSuite to support EDI-driven fulfillment workflows. The WMS pulls transactions from NetSuite via a REST integration, fulfills them in the warehouse, and then supplies the resulting shipment data back to NetSuite, which generates the outbound EDI documents sent to retailers and trading partners. The system supports a wide range of functional workflows relating to EDI documents, such as 850 (Purchase Order), 856 (Ship Notice/ASN), 940 (Warehouse Shipping Order), andz more. ShipHawk's Transportation Management System (TMS) integrates with EDI providers such as SPS Commerce and TrueCommerce, which can facilitate the data transfer directly to the receiver. Users will be able to make shipments in ShipHawk using the most common EDI data fields, including but not limited to 856 (Ship Notice/ASN), Shipment ID, Shipping Cost, SSCC Code, Package ID, etc. For customers who choose to leverage an EDI solution outside of SPS Commerce or TrueCommerce, the TMS also writes package contents and relevant shipping information back to source systems to support those workflows. ShipHawk is committed to supporting businesses of all sizes and backgrounds, ensuring its EDI solutions are accessible and inclusive for everyone. To learn more about how EDI can work for your business, contact ShipHawk today.

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