A VAN works like a post office for EDI. Each company gets a mailbox. You send a document to the VAN addressed to a trading partner’s identifier, and the VAN delivers it to that trading partner’s mailbox, where their system picks it up. VANs connect to each other, so two companies on different networks can still exchange documents.
The “value-added” part is the set of services around delivery: tracking, audit trails, delivery notifications, archiving, and protocol conversion so each trading partner can connect by whatever method it supports. Many companies adopted a VAN because it was simpler than setting up and maintaining a direct connection with every trading partner.
The trade-offs are cost and control. VANs typically charge by document or data volume, and fees can also apply when traffic passes between networks. A VAN confirms delivery, but it does not check whether the order, ship notice or invoice inside is correct. Many companies now use direct connections such as AS2 and SFTP, or cloud EDI, alongside or instead of a VAN.