What Is EDI Compliance and Why Does It Matter?

3PLs work with many clients to help achieve their goals in creating an efficient and effective supply chain. In order to do this, a 3PL could use paperwork or electronic means. Paperwork is, as you may have guessed, significantly slower than using the technology available. One of these core technologies is electronic data interchange (EDI).

What is EDI?

EDI is the computer-to-computer exchange of data between two parties. Generally, businesses use EDI for a quick and seamless exchange of business documents between themselves and clients. for example, a client can send a sales order to a 3PL and the 3PL will fulfil the order. No paperwork or manual, tedious labour required.

What is EDI compliance?

EDI compliance is the adherence to the widely accepted EDI standards. This is not to say that each business uses the same EDI protocols, as businesses vary in their needs. As such, there will be some variance for each business to account for its needs. Fortunately, the EDI standards allow for this variance, as it considers the many different businesses.

These standards make the communication of electronic data easier. Without a standard, every company would have different codes and commands than their client. This would create confusion and make data exchange inefficient.

Benefits of EDI compliance

  • Less expensive than paper documents
    • “Studies have show that manually processing a paper-based order can cost $70 or more while processing an EDI order costs less than one dollar.”
  • Much less labour time involved
  • Fewer errors assuming initial data is correct…
  • Faster processing
    • “Paper purchase orders can take up to 10 days from the time the buyer prepares the order to when the supplier ships it. EDI orders can take as little as one day.”

Why is EDI compliance important?

It is important to be EDI compliant because this ensures that any electronic data (purchase orders, sales orders, etc.) sent will be in a manner that is understood by another company’s EDI compliant software. This allows for easy and straightforward communication between two distinct software.

How does EDI compliance help you?

If you have an integral piece of software that is EDI compliant, ADLI Logistics can seamlessly and cost-effectively integrate and communicate with that software, much in the same way that we are integrated with current clients.


CovalentWorks. “What is EDI?” CovalentWorks. https://www.covalentworks.com/electronic-data-interchange/.

Enlist ADLI Logistics to manage your freight shipping, warehousing, and distribution needs. For more information fill out our contact form or call 1-877-363-7281.