Shipping API for E-commerce: How It Works, Benefits, Cost & Integration Guide

Shipping a package through e-commerce means much more than handing the package over to a courier. The order needs to be processed, courier partners have to be selected, shipping labels have to be printed, AWB has to be generated, the status of the shipment has to be tracked, any delivery exception has to be managed and the package might even need to be returned. 

Here is the role of a shipping API which automates certain parts of the shipping process by linking the e-commerce website or business operations to shipping and logistics solutions. 

Irrespective of whether you own a D2C brand, marketplace, online store or a bigger e-commerce operation, having the knowledge of how shipping API works can help you build a quick and efficient shipping process. 

What Is a Shipping API? 

Shipping API stands for Shipping Application Programming Interface that enables communication between e-commerce website, web applications, website or any other business systems and courier/shipping providers. 

A shipping API is basically a medium or a bridge that connects your e-commerce website with the logistics operations. 

For instance, when someone purchases an item from your website, the shipping API can pass that information to a shipping API provider that, in turn, can help select a courier, generate an AWB/shipping label and provide tracking details to be passed back to the e-commerce site. 

This way, you do not have to re-enter same information on other platforms. 

How Does a Shipping API Work? 

A shipping API works by enabling different software to communicate by making use of the API requests and responses that have been predefined. 

The flow of information using an API can be illustrated in the following steps: 

E-commerce website → Shipping API → Courier/Logistics API → Shipping API → E-commerce website 

At the time of making an order, the API takes the customer’s address, order information and mode of payment among other relevant information. 

Depending on the API provider, this process can include: 

• Courier selection  

• Rate calculation  

• AWB generation  

• Shipping label generation  

• Pickup requests  

• Shipment tracking  

• Delivery updates  

• NDR management  

• Return shipment creation 

What Information is Exchanged in a Shipping API? 

Different kinds of information can be exchanged using a shipping API, such as: 

• Customer name and contact information 

• Addresses for pickup and delivery 

• Order ID 

• Information about the product 

• Package weight and size 

• Method of payment 

• Amount of COD 

• Shipping service 

• Information about the courier 

• AWB number 

• Information about the shipping label 

• Information about the shipment status 

• Delivery and return information 

The particular information to be exchanged is determined by the provider and the functionality of the API. 

What Benefits a Shipping API Provides to E-commerce Businesses? 

In addition to automation, a shipping API can help with other aspects of an e-commerce businesses’ work. 

Multi-Courier Integration 

A shipping API can integrate an e-commerce business with various courier companies and allow it to manage their services using a single system. 

Also, it might become easier to choose a courier according to the delivery location, shipping rate and other factors. 

Automatic Shipping Label Creation 

After the order gets ready for delivery, the shipping API transfers the necessary information and creates the shipping label automatically. 

Real-Time Order Tracking 

Shipment status information can be collected from courier systems through shipping APIs and made available on the e-commerce website. 

This data can enable businesses to inform customers about their orders such as: 

• Order collected 

• In transit 

• Out for delivery 

• Delivered 

• Attempted delivery 

• Return of the shipment 

Automatic Courier Recommendation 

Certain shipping platforms may have preset algorithms that suggest which courier should be used based on location, package weight, serviceability, cost and past performance. 

Using this data, businesses can automate the process of selecting couriers rather than manually doing it for every shipment. 

Increased Order Speed 

Automation eliminates the need to do many actions manually when shipping. 

Once the order is placed, the system automates many processes and helps businesses speed up order processing from confirmation to shipping. 

Minimised Shipping Mistakes 

Automated data entry avoids repeated manual input of order and shipment data such as addresses, order numbers, package details and COD amount. 

Enhanced Delivery Control 

A business can monitor its deliveries from one dashboard rather than having to go to various courier websites. 

More Convenient Return Management  

Shipping APIs can help companies create return shipments, schedule reverse pickups, track returns and update the status of orders. 

This simplifies the management of reverse logistics especially when dealing with large volumes of returns. 

Enhance the Customer Post-Purchase Experience 

Customers like to track their purchases and deliveries and be aware of the current location of their parcels. 

Proper delivery information and tracking data can provide a better post-purchase experience to customers. 

How Shipping APIs Work: Step by Step 

There are slight differences in the workflows provided by various providers, but typically, a shipping API follows the steps given below: 

Step 1: Order Placed by the Customer  

The customer places an order through the e-commerce site or app. 

Order details may include customer address, product details and the mode of payment amongst other details. 

Step 2: Order Details Sent to the API 

The e-commerce system sends the pertinent order details to the shipping API. 

The API receives and analyses the details in accordance with its specific requirements. 

Step 3: Checking Available Courier Services 

The shipping system determines the available courier services depending on different factors including destination, package details and shipping requirements. 

Step 4: Selecting the Courier and Shipping Service  

A courier can be selected manually or automatically. 

The criteria for selection may include factors such as cost, delivery time, serviceability and previous performance among others. 

Step 5: Creation of Shipping Label and AWB Number 

Once the shipment is created, the Air Waybill (AWB) number and the shipping label will be generated by the system. 

Step 6: Shipment Collection 

A pickup request is forwarded to the chosen courier service provider and the package is collected by the courier service provider from the sender or fulfilment centre. 

Step 7: Tracking Update 

Tracking updates as the package moves through the delivery network are provided by the courier service provider. 

These updates can be transferred to the e-commerce system using the API. 

Step 8: Delivery of Shipment or Return 

The shipment is finally delivered to the recipient. 

In case of unsuccessful deliveries, the shipment may go through the return process. 

Single Carrier API vs Multi Carrier Shipping API 

Not all shipping APIs offer access to several couriers at once. Depending on your shipping needs, you might consider both options or prefer one over the other. 

What Is Single Carrier API? 

A single carrier API is when an e-commerce store connects directly with one courier company’s technology platform. 

It can give access to such services as: 

• Shipment creation 

• AWB generation 

• Pickup requests 

• Tracking 

• Delivery 

It might work for a business which works with only one courier. 

What Is Multi Carrier Shipping API? 

Multi carrier shipping API is when a business connects with several courier companies through one technical integration instead of connecting to each courier individually. 

The business uses one API layer to integrate with many shipping services. 

Which Shipping API Is Better for E-commerce Business? 

There is no definite answer. 

The first one might be better if a business works with one courier and has limited shipping needs. 

In turn, multi carrier shipping API might be more helpful for e-commerce businesses with needs such as wider serviceability, courier flexibility, several shipping services and scalability. 

Features to Consider in a Shipping API 

There are certain features that businesses need to consider before selecting a shipping API. 

Integration with Multiple Couriers 

One needs to see whether the selected API integrates with the courier partners and serves the delivery locations important for a business. 

Automated Shipping Labels 

This feature helps in eliminating manual effort and improving efficiency in despatching shipments. 

Real-Time Tracking 

Real-time tracking features ensure that businesses receive up-to-date information about their shipments and it is available to both the business as well as their customers. 

AWB Creation 

The API needs to have the capability to create AWBs quickly and easily while creating shipments. 

Rate Calculation 

With rate calculation, businesses can calculate the rates applicable for a shipment depending on its weight, dimensions, destination and other parameters. 

Address Validation 

Address validation ensures that incomplete or wrong addresses are detected before any shipment is despatched. 

COD Management 

COD management feature is required by businesses that offer Cash on Delivery option. 

NDR Management 

Businesses use NDR management to detect any failed deliveries. 

Returns Management 

Features for generating return shipments, picking up and tracking returns should be considered. 

Webhooks and Notifications 

Webhooks provide event-based notifications whenever there is a change in the status of a shipment, including shipment pickup, delivery and return. 

Analytics and Shipping Reports 

With analytics, organizations can get insights into shipping expenses, delivery performance, courier performance, returns and other logistics information. 

API Documentation and Developer Support 

Good documentation is necessary for efficient API integration, and developer support can be helpful in solving any technical problems. 

Shipping API Integration With E-commerce Platforms 

A shipping API can be integrated with various e-commerce platforms. 

Shipping API for Shopify 

E-commerce stores using Shopify platform can connect their order workflow with shipping system through APIs or integrations. 

It helps in automation of shipment creation, labelling, tracking and other logistics tasks. 

Shipping API for WooCommerce 

WooCommerce stores can use shipping APIs in order to connect their orders with shipping and logistics system. 

Shipping API for Magento 

Magento e-commerce stores can use API integration to connect order management and fulfilment process with shipping system. 

API for Shipping in Custom E-commerce Website 

Owners of custom-built e-commerce websites can connect their websites to a shipping API using programming languages and frameworks supported by their development environment. 

API for Shipping That Connects with ERP & OMS 

Shipping API can be integrated into ERP or Order Management System (OMS). 

It can enable the flow of shipping data between order management, inventory, warehouse and logistics systems. 

Process of Integrating Shipping API into E-commerce Business 

Integrating a shipping API is a process that includes both technical and business considerations. 

Step 1: Understand your Shipping Needs 

First step is understanding your shipping needs. 

It will help you identify: 

• Number of shipments per month 

• Shipping location 

• Courier partners 

• COD requirements 

• Return shipments 

• Tracking 

• E-commerce platform 

• ERP & OMS 

Step 2: Courier Partner Selection 

Choose the courier services that you wish to use. 

Check out their serviceability, prices, delivery times, COD capabilities and coverage areas. 

Step 3: Select an API Provider 

Select from available options after assessing the courier network, features, costs, documentation, reliability and support of various providers. 

Step 4: API Credentials 

Once you have selected the API provider, get the necessary API credentials. These include the API key, token or other types of authentication. 

These credentials enable secure communication with the API. 

Step 5: API Integration with the E-commerce Platform 

Your development team can integrate the API with your e-commerce website, application, Shopify store, WooCommerce store, ERP, OMS or any other supported system. 

Step 6: Configure Shipping Rules 

Configure the shipping rules related to courier selection, prices, shipment types, COD orders, locations and other parameters. 

Step 7: API Integration Testing 

Test the API integration process before launch. 

Test the following: 

• Order creation 

• Courier selection 

• AWB creation 

• Label creation 

• Courier pickup request 

• Tracking update 

• Delivery status 

• Returns 

Step 8: Live Launch and Monitoring 

After successful testing, launch the integration and start monitoring its performance. 

Monitor API errors, failed requests, tracking lag, courier performance and other aspects of the integration’s performance. 

How Much Would a Shipping API Cost? 

A shipping API has no fixed cost and its pricing can depend on several factors like the API provider, shipment volume, functionalities, courier network and the level of integration required. 

The API provider might have the API included as part of its services, while others might charge depending on the volume of requests made to the API. 

Factors That Determine Shipping API Cost 

Many factors may determine the overall cost: 

• Number of monthly shipments 

• Number of couriers integrated 

• Volume of API requests 

• Shipping capabilities 

• Tracking services 

• COD and return services 

• Development requirements 

• ERP & OMS integration capabilities 

• Technical support 

• Enterprise needs 

Businesses need to look at the value offered by the shipping API beyond just the price. 

How to Choose a Shipping API for Your E-commerce Business 

It should meet your business needs both now and in the future. 

Check the Courier Network 

Ensure the courier partners provided by the API are capable of delivering to your desired destinations. 

Compare Shipping Rates 

Compare shipping rates among the providers and determine what you are charged for. 

Integrate with Your E-commerce Needs 

Make sure the API integrates well with your e-commerce platforms, website, ERP and OMS. 

Scalability 

The API needs to be able to cope with an increased load of orders without compromising its performance. 

API Documentation 

Good documentation will simplify integration. 

Customer Support 

In particular, technical support may come in handy during implementation and when dealing with issues related to the API. 

Security and Reliability 

Make sure to examine authentication methods, security and reliability, data protection, uptime and error handling. 

Returns and NDR 

In case your company has many returns and delivery failures, you need to consider this functionality as well. 

Popular Use Cases of Shipping APIs 

Shipping APIs can be of great use to many businesses based on their needs. 

D2C Brands 

For D2C brands, they can implement an API for the automation of their shipping process when handling large numbers of orders. 

B2B Businesses 

B2B businesses can integrate their order management software with shipping services for a smooth shipping process. 

Marketplace Sellers 

Marketplace sellers can use shipping integrations to help them manage their orders and shipments from various logistics services. 

Retailers 

Online retailers can integrate their e-commerce websites with shipping services to help them with fulfilment and shipping. 

Manufacturers 

Manufacturers who are selling online can integrate their shipping systems with their business systems. 

Social Commerce Businesses 

Businesses that receive orders through social media can connect their order flow with the shipping system. 

Shipping API Vs. Shipping Aggregator: Difference Between Them? 

Shipping API and shipping aggregator share some similarities but are not identical concepts. 

Shipping API is a technical solution designed to facilitate communication between various software systems. 

Shipping aggregator is an integrated logistics platform that connects with several courier partners and offers options such as: 

• Courier selection 

• Shipping costs 

• Label creation 

• Shipping tracking 

• NDR management 

• Shipping return 

• Shipping analysis 

A shipping aggregator may also offer APIs so that shipping solutions could be integrated directly into a company’s e-commerce platform. 

Typical Difficulties Associated with Using a Shipping API 

Even though API is an excellent solution for simplifying shipping processes, it does have its difficulties. 

Integration Difficulties 

The integration of API into an already existing e-commerce website or system may require some advanced technical skills. 

API Failure 

In case the API stops working for whatever reason, shipment creation or any other automated process will become impossible. 

Courier API Failure 

Failure in a courier’s API may lead to such problems as inability to create shipments and tracking difficulties. 

Inadequate Shipment Data 

In case the address, weight, size or COD details are incorrect, a shipping problem will arise regardless of the functioning API. 

Shipment Tracking Delay 

Sometimes it may take some time for shipment data to go from one system to another. 

Compatibility Problems 

Since different systems have different requirements, API usage may cause compatibility issues. 

Request Scaling 

As orders increase, it is necessary to make sure that API is able to cope with larger requests. 

Best Practices When Working with a Shipping API Provider 

Here are some best practices that businesses can follow to ensure a reliable shipping API integration: 

Authentication: Secure your API key and other credentials. 

Data validation: Validate addresses, package information and other data before processing a request. 

Error handling: Plan for errors during a request or an error from the API. 

Webhooks: Where available, use webhooks to process shipment status updates. 

API monitoring: Monitor the response time and failures of API requests. 

Testing: Test shipment creation, tracking, label printing and returns before going live. 

Fallback: Have a backup plan for situations in which the API or courier service fails temporarily. 

Courier monitoring: Monitor the delivery rate, NDRs, returns and shipping prices. 

API updates: Always review the API documentation, and update your integration if necessary. 

Customer data protection: Protect customer information and handle it securely as you would any sensitive data. 

Conclusion 

An API for shipping could be an excellent solution for any e-commerce business to improve its logistics management process through interaction between an ordering system and a courier/shipping service via automatic data exchange. The list of capabilities of shipping APIs includes not only courier selection and AWB creation but also label generation, tracking, NDR management and returns. 

For growing e-commerce companies, an API for shipping could mean much more than automating some processes because it can help improve operational efficiency, provide greater visibility over shipments, support working with several couriers, reduce mistakes and improve the customer experience. 

It is necessary to select the right shipping API in accordance with the needs of your company at present while also considering its future growth. 

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