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What is an EDI VAN, and do you still need one?

A value-added network was how most EDI travelled for decades. Here is what a VAN does, how it bills, and when a direct AS2 or SFTP connection does the same job.

Weredi team4 min read

Key takeaways

  • An EDI VAN (value-added network) is a private mailbox service: you drop files in your mailbox, and the VAN delivers them to your trading partner’s mailbox.
  • VANs usually bill per kilocharacter (1,000 characters) or per document, plus mailbox and interconnect fees, so the cost grows with your volume.
  • Most large retailers also accept a direct connection, AS2 or SFTP, which moves the same files point to point without per-character charges.

What is a VAN in EDI?

A VAN is a network that stores and forwards EDI files between companies. Each company has a mailbox on a VAN. You send an 810 invoice to your mailbox, addressed with your retailer’s EDI ID; the VAN routes it to the retailer’s mailbox, even if the retailer uses a different VAN, through an interconnect between networks. The VAN keeps a log of what passed, which is the “value added”.

VANs made sense when companies dialled in over modems and couldn’t reach each other directly. They still run a large share of retail EDI.

How does VAN pricing work?

  • Per kilocharacter. A charge for every 1,000 characters sent or received. A long purchase order costs more than a short one.
  • Per document or per envelope. A charge per file or per interchange, sometimes on top of the characters.
  • Mailbox and interconnect fees. A monthly fee for your mailbox, and sometimes a fee when your partner is on another VAN.

For a small supplier, the hard part is predicting the bill: a busy season, a retailer that splits orders by store, or a resend after an error all add characters. More on the fee types in how much EDI costs.

VAN vs AS2: what is the difference?

Through a VAN

  • Files go to a mailbox, then on to the partner
  • Billed per kilocharacter or per document
  • One mailbox reaches partners on many networks
  • The VAN keeps the delivery log

Direct AS2 or SFTP

  • Files go straight to the partner’s server
  • No per-character charge for the transfer
  • Set up once for each partner
  • AS2 returns a signed receipt (MDN) for every file

AS2 signs and encrypts each file and returns a signed receipt, called an MDN, so you have proof of delivery without a middleman. SFTP moves files over an encrypted connection to a folder on the partner’s server. Both are covered in AS2, SFTP and FTPS connections.

Do you still need a VAN?

Usually not, if your trading partners accept a direct connection. Check each partner’s EDI guide, under connectivity or communications. Many large retailers list AS2, and many distributors offer SFTP. If a partner only accepts a VAN, ask whether AS2 or SFTP is an option for new suppliers before you sign up for a mailbox.

A VAN doesn’t check your documents A VAN delivers what you give it. Whether the retailer accepts your invoice still depends on the document matching their guide. The 997 that comes back says the file was readable, not that it was right. See 997 vs 855.

How Weredi connects

Weredi connects directly to your trading partners over AS2 (signed and encrypted, with MDN receipts), SFTP, FTPS or FTP, with PGP where a partner asks for it. There is no VAN and no per-character charge: one flat price covers unlimited partners and transactions. Every delivery shows in the order’s timeline, with automatic retries when a partner’s server is briefly unreachable.

Questions

What does VAN stand for in EDI?

Value-added network: a private network that stores and forwards EDI files between trading partners’ mailboxes and logs each delivery.

Is a VAN required for EDI?

No. A VAN is one way to move EDI files. Most large retailers also accept direct connections such as AS2 or SFTP.

What is a kilocharacter in EDI billing?

A unit of 1,000 characters. Many VANs bill per kilocharacter sent and received, so longer documents cost more.

Is AS2 better than a VAN?

For most suppliers it is cheaper and just as traceable: AS2 encrypts and signs each file and returns a signed receipt. A VAN is useful when a partner accepts nothing else.

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Weredi team

Practical EDI guides from the people who build and support Weredi, in Montréal.

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