In U.S. industry's never-ending quest to automate, extensible markup language (XML) sounds like a dream come true. Why? It offers a simple means of encoding data so that content can be processed without human intervention and still be exchanged across diverse systems.

Industry groups have already begun developing messages using XML, which enables browsers to identify types of commercial messages sent over the Internet. In the case of logistics, XML would let senders use special tags to indicate what kind of message—say, a purchase order or advance shipment notice—will follow. If a browser recognizes a sequence of characters and numbers as a specific type of message, it can then direct the appropriate software application to act upon that information. This could make it easier for shippers to use the Internet to send information like shipment status notifications or bills of lading to trading partners and carriers.

One advantage is that no special equipment is required. "In order to handle an XML message, all you need is an XML parser," says R.T. Crowley, a Cary, N.C.-based independent consultant specializing in electronic commerce. "And there's an XML parser built into every browser on every computer sold in the last five years."

Because a company needs only an up-to-date browser on its computers to read XML messages, industry experts have come to view this technology as a sort of poor man's EDI (electronic data interchange). EDI requires companies to invest substantial sums on systems and services in order to translate commercial messages for use in disparate computer systems; XML, by contrast, would let companies exchange messages with their trading partners right over the Internet.

Yet because numerous standards groups are developing their own XML messages, shippers could be forced to accommodate more than one format for, say, an advance shipment notice. "It will be extra work," warns Bob Mick, an analyst with ARC Advisory Group, a market research firm in Dedham, Mass. "On the integration side, though, the tools [exist] to make the transformation between those various standards."

Of course, for this to work, companies will have to come up with common definitions and procedures for handling business messages. Recognizing this need for standards, many industry organizations are working on definitions for XML messages that could be shared.

One of the pioneers in this area is a high-tech industry consortium known as RosettaNet, which was launched in 1998. Based in Santa Ana, Calif., RosettaNet has more than 400 members drawn from the semiconductor and computer industry. RosettaNet has focused on developing "partner interface processes" or PIPs that standardize the way supply chain trading partners conduct business with one another. Companies using the PIPs can then exchange XML-defined messages to transact business. "The partner interface processes establish a dictionary that tells you that what follows is, say, a bill of lading," says Gary Cross, the global buy and supply competency leader for IBM Consulting in Cleveland. "It lets an application interpret what's going on."

Initially, the consortium focused on procurement, establishing a standardized product identification system and PIPs to cover purchase orders. "Last year, purchase order management and product information were the two most popular segments for our group," confirms Mary Schoonmaker, RosettaNet's vice president of global marketing and strategic development.

But RosettaNet is rapidly expanding its focus. The consortium recently developed several PIPs for transportation and distribution. Schoonmaker reports that RosettaNet's transportation and distribution group has created the following PIPs as part of its so-called "3B" series of messages: distribution of transportation projections, notification of advance shipment, notification of shipment status, query of shipment status, notification of a shipper's manifest, and change of shipment. "The 3Bs are focused on messages between shipper, client, and carrier," notes Catherine Carey, a senior business systems analyst at Motorola Inc. in Chicago and RosettaNet participant. "It was driven by large carriers like FedEx and UPS."

Other segments of RosettaNet have established PIPs for "ship from stock" notifications for situations in which a shipment notice is sent to authorize a shipment. And that's only the beginning: RosettaNet has plans for more logistics-related messages. The group intends to create PIPs for delivery appointments, transportation claims, change of delivery appointments, and cancellations of delivery appointments.

At the same time, a collection of companies known as the "iHub" team—part of RosettaNet's information hub initiative—has begun working on specific messages for third-party logistics (3PL) activities. Early adopters include Motorola, Hewlett Packard, Cisco Systems, IBM, Intel, Texas Instruments, Menlo Logistics, UPS, and Expediters International, to name a few. "We're adding the role of logistics provider because companies are outsourcing both inbound and outbound logistics," explains Carey, who serves as RosettaNet's iHub program director.

The Motorola business systems analyst adds that the third-party logistics messages under development would address the management of a shipping order. In the works are messages for the initial notification to a 3PL that an order has been placed, confirmation of receipt of that order from the 3PL, and confirmation from the 3PL to its client after a delivery has taken place.

RosettaNet isn't the only industry group developing XML message standards. The Open Application Group (OAG), an association of software vendors and users based in Marietta, Ga., is also working on XML-based messages for commerce, including some that cover logistics activities. OAG has written more than 100 commercial messages, including versions for purchase orders, production orders, time and attendance reports, and forecasting. Last year, OAG released an XML standard for advance shipment notices.

OAG plans to release more messages for use in the logistics field shortly. For instance, it intends to create XML notices for delivery, receipt of delivery, and what it terms "get-and-show delivery" (a message that the consignee would send back to the shipper, confirming that a delivery took place). It also plans to work on financial settlement messages that international shippers could employ to communicate with carriers. "We will be delivering a whole family of messages around the delivery mechanism," says David M. Connelly, OAG's president and CEO.

Though OAG and RosettaNet have taken the lead in developing specific XML messages pertaining to distribution activities, other groups are not far behind. The Accredited Standards Committee (ASC) X12 is also working on ways to adopt and translate the current EDI message format into XML language context. (The American National Standards Institute in Washington, D.C., formed ASC X12 two decades ago to develop and maintain EDI standards.)

ASC X12 also plans to develop XML substitutes for current EDI messages such as shipment status messages and freight invoices, adds Doug Anderson, an assistant vice president at Kleinschmidt Inc. in Deerfield, Ill., and chair of the ASC X12 transportation subcommittee. ASC X12 is working closely with the global Electronic Business Initiative (ebXML) to standardize business specifications worldwide as well.

Given the number of industry organizations moving ahead with their own versions of logistics-related XML communiqués, it's clear that shippers will soon confront multiple formats for common logistics messages like advance shipment notices. "On the business-to-business side, there are various standards bodies defining similar things," comments ARC Advisory Group analyst Mick. "The suppliers will be supporting multiple standards."

Most of the industry experts contacted for this story acknowledged that the existence of multiple XML message standards could make extra work for logistics managers but agreed that the situation would not be impossible to handle. To deal with trading partners using different XML standards, Crowley notes, shippers sending XML messages would simply be required to load "schemas" into their browsers, while companies receiving messages would need a "stylesheet" to read the appropriate message. Yet he sounds a note of caution: "You could have 50,000 different schemas to deal with 50,000 trading partners," he says, "and the administration of [such] a library would be a nightmare."

Although the need for an extensive library of XML schemas and stylesheets could make life cumbersome, the advantages of XML messaging will still likely outweigh the additional burden. "XML in combination with the Internet will provide computer-to-computer communication for a large number of smaller suppliers," predicts Richard J. Sherman, chief marketing officer for the software maker V3 Systems Inc. of Charlotte, N.C.

But even if all parties can agree on standards, the logistics industry's transition to XML could take some time to complete. Many large companies have spent a lot of money on systems to support EDI and are unwilling to write off those expenses. "There's a lot of investment in EDI," says Crowley. "But by attrition and evolution, you will see things change over to XML as a means of messaging."