What is an EDI VAN?

What an EDI VAN is

A value-added network is a hosted mailbox service for EDI files. Kroger's supplier portal defines it as "a private network provider (sometimes called a turnkey communications line) that is hired by a company to facilitate electronic data interchange EDI or provide other network services". Each company on the network has a mailbox. The sender puts a file in its mailbox, the network delivers it to the receiver's mailbox, and the receiver collects it.

The VAN is one of the transports a trading partner accepts, next to AS2 and SFTP. Walmart lists four connection types for drop-ship vendors, and for the VAN it states that it "does not govern or dictate the data flow between VAN and DSV". Kroger calls the VANs its "preferred communication method". What the file contains, and whether it matches the partner's guide, is outside the network's job. That is the mapping and the ERP side.

How a VAN routes a file

A VAN does not read the business data. It reads the envelope. The ISA segment carries a sender qualifier and ID (ISA05 and ISA06) and a receiver qualifier and ID (ISA07 and ISA08), each ID fixed at 15 characters. X12 defines ISA06 as the code "published by the sender for other parties to use as the receiver ID to route data to them".

ISA*00*          *00*          *ZZ*NORTHFIELD     *01*123456789      *261003*0915*U*00401*000000457*0*P*>~

The network looks up 01 plus 123456789 in its directory, finds the mailbox that ID belongs to, and delivers the interchange there. One network's administration guide lists what a user needs before adding a trading partner: the network the partner uses, the partner's account ID and user ID on that network, the partner's interchange receiver ID and qualifier, and which side pays the send-side and receive-side charges. The receiver ID is mapped to the account and user, and the partner does the same in reverse.

That makes the ID setup the part that fails silently. An ID that is not in the directory, a wrong qualifier, or a 15-character field padded wrongly leaves the file undelivered or in a mailbox nobody collects from. The sender sees nothing until the 997 functional acknowledgment fails to come back. Kroger's FAQ tells vendors in that case to "check your EDI system or contact your EDI VAN or provider to investigate if the EDI document was transferred to Kroger's mailbox".

Interconnects: when the two sides use different networks

A supplier and a retailer rarely use the same network. The two networks then pass files between them over an interconnect, and the envelope stays the same from mailbox to mailbox. Kroger states it directly: it "does not require the use of a specific VAN or EDI provider", and a vendor on another network should "have your VAN or provider setup an interconnection to our VAN".

Each network bills its own customer. A document that crosses an interconnect is counted twice: once by the sender's network and once by the receiver's. Networks also differ in how they count a trading partner, by ISA ID pair or by group ID, so one retailer with several divisions can be one partner or several on the bill.

What a VAN meters, with a worked example

Networks charge per unit, and the units count everything that passes through the mailbox:

Acknowledgments are documents too. A 997 that confirms one 850 from the example buyer:

ISA*00*          *00*          *ZZ*NORTHFIELD     *01*123456789      *261003*0921*U*00401*000000460*0*P*>~
GS*FA*NORTHFIELD*123456789*20261003*0921*460*X*004010~
ST*997*0001~
AK1*PO*1203~
AK2*850*0001~
AK5*A~
AK9*A*1*1*1~
SE*6*0001~
GE*1*460~
IEA*1*000000460~

The file is 250 characters. The ISA segment alone is 106, and the four envelope segments together are 185, so 74% of a single-set 997 is envelope. Worked through for a supplier with 40 orders a day, each with an 850 in, an 855, 856 and 810 out, and a 997 for each of the four:

• 4 documents plus 4 acknowledgments is 8 files per order, so 320 files a day cross the network.
• 160 of those are 997s at about 250 characters each: 160 × 250 = 40,000 characters, 40 kilocharacters a day in acknowledgments alone.
• With the retailer on another network, all 320 files cross the interconnect, and each is counted on both sides.

Batching changes the count. One 997 can acknowledge every set in a group, so 40 purchase orders sent in one interchange can be answered with one 997 of 40 AK2 loops and one envelope, instead of 40 envelopes of 185 characters each. Whether a partner sends orders one per interchange or in batches is set by the partner, and it shows up on the network bill.

Where a VAN stops

Network operators describe their own service the same way: the mailbox, routing, notifications and an audit trail are the core, and document mapping and compliance are listed as extra services next to it. A VAN delivers the file it was given. Whether the 856 carries the right SSCC, whether the 850 becomes a correct sales order and whether the 810 matches what was shipped are decided before the file reaches the mailbox and after it leaves.

AS2 and SFTP take the network out. The file goes directly to the partner's server, with no mailbox, no interconnect and no per-character metering, and each partner connection is set up separately. The comparison of the transports is on what is EDI, and the onboarding steps that follow any of them on trading partner onboarding.

What this means for your integration

A VAN solves delivery. The files it delivers still have to be produced from your ERP, checked against each partner's guide and reconciled with the acknowledgments that come back, and a file that never arrives only shows up as a missing 997.

We build that part as an EDI integration: connected to your VAN mailbox or directly over AS2 or SFTP, with maps per partner, checks before sending, and every 997 and 824 matched to its document. A file without an acknowledgment raises an alert in the dashboard. Tell us which network and partners you use.