Amazon Air founder launches Pandion to liberate retailers from UPS and FedEx; raises $30M in funding

Over the years, the growing complexities of first and last-mile delivery often shift the focus away from middle-mile delivery operations. As the name implies, middle mile delivery or middle mile logistics is the shipment of goods and parcels from a warehouse or distribution center to traditional stores, brick, and mortar retail outlets, and facilities. In other words, middle-mile transportation comes before the last-mile delivery operations.

One of the things that make Amazon so successful is its handling of middle mile delivery. Also known as second-mile delivery, middle-mile delivery is the delivery of goods from a warehouse or distribution center to fulfillment facilities from where consumers purchase their products.

The world’s largest retailer has focused on the middle mile in a way no other company has done in history. And the brain behind that success is Scott Ruffin, a one-time logistics captain in the U.S. Marine Corps with over 20 years of experience in logistics.

In late 2014, Amazon tapped Ruffin to solve a major problem. Amazon was relying on air cargo partners to haul its packages across the country but needed more space to meet its rapid growth. Two years later, Ruffin founded Amazon Air. Ruffin has been deep in the trenches of logistics operation ever since. Ruffin left Amazon in 2017 to join Walmart as Vice President and Head, eCommerce Transportation, according to his LinkedIn profile.

Ruffin left Walmart in June 2020 after he saw the delivery problems faced by small retailers and decided to strike out on his own to tackle the challenge. In September 2020, Ruffin launched Pandion, a delivery startup focused on helping smaller retailers navigate the world of sorting, packing, and shipping. Pandion now wants to help retailers offer affordable one- and two-day deliveries and take on his former employer, UPS, and FedEx. In February, the Seattle-based Pandion came out of stealth mode with a $4.9 million round of seed funding.

Today, Pandion announced it has raised another $30 million led by Bow Capital. Other notable investors include AME Cloud Ventures, a firm led by Yahoo co-founder Jerry Yang, and Innovation Endeavors, co-founded by former Google CEO Eric Schmidt.

Rafi Syed, the firm’s general partner, said Pandion is designed for the modern challenges of online retail and to meet surging demand, which is overloading the existing shipping system. Pandion’s first sortation center is located in Quakertown, Pennsylvania, and aims to speed up deliveries for online retailers.

“The incumbent shippers weren’t built for e-commerce, and shoppers often feel the strain through delayed deliveries, missing packages, and poor customer experience,” Syed said in a statement.

U.S. consumers are projected to spend $933.3 billion online this year, up 17.9% from 2020, according to eMarketer. Amazon is expected to account for 40% of that. Pandion is going after the other 60%, and has already signed up a number of retailers, including multiple Fortune 100 companies, Ruffin said.

Meanwhile, Ruffin isn’t the only startup working to capitalize on the glut of packages. Boxlock and AxelHire are two startups providing last-mile delivery solutions. According to CB Insights data, global investments in supply chain and logistics startups reached $8.1 billion in the fourth quarter of 2020.