In the world of web services, web applications and custom software development, you will likely come across the term API: Application Programming Interface. An API enables applications to talk to each other and share data without any user knowledge or intervention. APIs are everywhere and all of the big technology companies such as Facebook, Twitter, Google and Microsoft have them.

But how does it work? For example, when you use an application on your mobile phone, the application connects to the Internet and sends data to a server. The server then retrieves that data, interprets it, performs the necessary actions and sends it back to your phone. The application then interprets the data and presents you with the information in a readable way. The key: all of this happens via an API. This means that your phone’s data is never fully exposed to the server and the server is never fully exposed to your phone, meaning the application’s source code is protected.

Types of APIs to consider

There are three basic forms of APIs for organisations to consider: private, public and partner.

Private APIs are published internally for use by the company’s developers to improve its own products and services and are not exposed to third parties.

Public or open APIs are publicly available and can be used by any third-party with no restrictions.  When sharing your business API, you allow other applications to integrate with yours using the provided methods, for example data retrieval.

Partner APIs can only be used by specific parties with whom the company agrees to share data. Partner APIs are used within business relationships, often to integrate software between partnering companies.

Why do APIs matter?

Within the Logistics sector, APIs play an important part in enabling visibility throughout the supply chain. Where EDI (Electronic Data Interchange) was previously at the heart of transport management systems, these are now replaced by APIs. This is because there is a need for shippers to quote, route and track shipments in real-time and by utilising APIs, data can be sourced from multiple systems into a single management system.

Furthermore, APIs can play a big part in the automation of Purchase Order (PO) and Shipment data between retailers and logistics providers. Private APIs allow for standard integrations to be built and connected across a number of systems, reducing development times as a result. Furthermore, shipment status data can be made available through private or public APIs for consumption by third-parties and retailers.

Cargo Vessel Tracking is an area based on different types of APIs. Vessel location data obtained from transponders on ships can be retrieved from third-parties and stored. Map API providers such as Google, Mapbox or Azure Maps can then be used to embed mapping within the application and plot route information, bringing numerous benefits.

What are the benefits of using APIs?

Standardising Code Development: Private APIs can improve internal development processes by standardising how developers write application code. This in turn enables more streamlined and transparent application codes, supporting feature development and reducing the time to market.

Customer Growth: With public APIs, organisations can allow developers to integrate elements of their code into their applications, increasing exposure and aligning services with other trusted brands.

Revenue generation: Organisations can charge for their API usage, which is how most online payment gateways operate. PayPal, for example, is prepared to share its API to provide fast and convenient payments whilst charging commission for its services. The ‘API Economy’ refers to a business creating value and potential revenue streams by unlocking its proprietary systems and data.

Scalability: One of the big advantages of cloud-based APIs is the ability to automatically scale cloud services. Services can scale automatically based on traffic, without any additional configuration needed.

Flexibility: Data is an extremely valuable business asset, but as it is not always in a standard format, it can sometimes be difficult to access and interpret. However, APIs aim to make applications flexible and can be a very powerful tool to interact with other services.

There are many examples of publicly-available APIs and companies encourage their usage by third-parties, as this brings opportunities around product promotion and sales. Well-developed and professional APIs should be an essential part of your business strategy.