An Amazon Logistics Vet’s Tips for Handling Peak Season As a Startup

• Scott Ruffin is the founder of Pandion, an e-commerce shipping startup taking on UPS and FedEx.
• He launched the startup after more than six years managing logistics at Amazon and Walmart.
• Ruffin learned an important skill for a founder is to be ready to pivot when circumstances change.

Scott Ruffin knows what a busy holiday shipping season looks like. In his combined six years as a logistics leader at Amazon and Walmart, he sometimes opened crucial facilities on Thanksgiving Day with no wiggle room before

Black Friday

.

But all that experience didn’t keep him out of the fetal position during his first peak season as a shipping startups CEO, Ruffin joked in early January. 

“It felt hectic. It felt crazy,” he told Insider. “When it was all over, it felt very, very rewarding.”

Ruffin’s startup, Pandion, builds and operates sortation centers, specialized warehouses that take in packages from retailers and sort them for various carriers to pick up. FedEx, UPS, and other carriers, not to mention Target and Amazon, use these types of facilities to direct packages efficiently. But Pandion offers sortation for hire and then links retailers to multiple carriers based on speed and cost priorities.

Pandion took possession of its first packages October 19. Between that day and the end of the year, the startup handled hundreds of thousands of packages (Ruffin declined to give an exact number). It’s a tiny fraction of the total volume he saw at Walmart, but a big start for a new building.

Ruffin honed his sortation skills at Amazon, where he had a hand in setting up its sortation network and founded Amazon Air. Amazon’s “customer-obsessed” culture meant that Ruffin had to reckon with the fact that some of his packages wouldn’t arrive on time. Still, Ruffin said Pandion delivered roughly 98% of its packages on time, on par with UPS and USPS and above FedEx’s performance as reported by ShipMatrix. 

The moments of stress mainly stemmed from planning for peak season 2022, even when 2021 wasn’t finished. The company is headed to Chicago, Dallas, and Los Angeles in the first half of next year and Ruffin is a self-described one-man real estate team. These are the lessons he’ll take into the next holiday rush. 

Pandion

Be prepared to react quickly 

Ruffin said his customers’ predictions of how many packages would be coming and when weren’t perfect. Some packages came later than expected, but many more came early. 

“Those sales you would have from Black Friday,

Cyber Monday

, or even the two weeks before Christmas, kind of got pulled forward a little bit because of the supply chain delays and all the mainstream news about supply chain issues,” Ruffin said.

Forecasting issues have plagued retailers and carriers through the pandemic, since historic data doesn’t really apply. And though Ruffin thought his October 19 launch date would be ahead of the holiday rush, he was somewhat surprised to find himself opening with some of the highest volume the center would see all season. 

The early volume meant making sure there were enough workers in Pandion’s building took careful management. The team designed incentives to get more workers in and at one point the center ended up with too many. It was a constant balancing act, he said, aided by technology. 

“We had built technology that allows us to kind of dynamically schedule shifts, and be able to shift as we started seeing that volume come in differently,” Ruffin said. “What we learned is to continue to double down on our flexibility to quickly react to the change.”

Don’t oversell 

Part of that flexibility is making sure there is at least some slack in the system. In logistics, unused capacity is the enemy of profits. It’s exactly what UPS CEO Carol Tomé has been squeezing out since her tenure began in 2020. 

But in uncertain times, and especially with a new operation, Ruffin said being conscientious not to oversell his service was key.  

“One of the things that we’ve done both for this year and next is not attempt to sell 101% of space in our physical operation. So you always have an ability to flex up or down,” he said. 

He used the analogy of an airline overbooking flights and having to kick someone off, but there are plenty of examples of logistics firms overselling and then disappointing customers too — especially during the pandemic.

Diversify hiring 

Pandion’s first sortation center is in Allentown, Pennsylvania — the largest city in the state’s Lehigh Valley, which is the heart of e-commerce shipping and warehouse work on the East Coast. It offers a strong hiring base for warehouse workers, but comes with lots of competition. 

In addition to offering attractive incentives, Ruffin said working with more than one staffing agency made the difference. 

“Staffing agency A may traditionally have this pool of employees to draw from, and staffing agency B has this pool, and you can end up getting much better results by diversifying,” he said. 

Workers know when you’re trying to pay the minimum 

On top of incentives and working with multiple partners,  Pandion hired 250 hundreds workers by creating a welcoming environment.

“It’s bright, it’s kind of fun, it’s airy,” Ruffin said. But on top of the environment, Ruffin said the company needed to acknowledge the experience of the many seasoned warehouse workers in Allentown. 

Workers told Ruffin and his team that other companies would up each other by sometimes even just 50 cents per hour, which made them feel as if every company was trying to pay as little as possible. 

“I’d much rather make a bold correction and then you know, learn from that for later than to create this feeling that we were nickel and diming people,” he said.