While Walmart store leaders felt a newfound urgency to expand the online grocery business following Amazon’s Whole Foods acquisition, Marc Lore’s e-commerce leadership team was still evaluating the best ways to compete online when it came to shipping goods from warehouses, not stores. With logistics issues that were impossible to ignore, top supply-chain executive Nate Faust concluded that an overhaul was needed, and it started where e-commerce orders do—in the warehouses where staff pick and pack the shipments before sending them off to online customers’ doors.
His reasoning was rather straightforward: that 2016 holiday season, the first one after the Jet acquisition, was a borderline disaster, and problems emerged during the 2017 holidays, too. When Walmart announced its financial results for that period, the company revealed a drastic deceleration in the growth of its online sales, which spooked Wall Street investors, cratering the stock price. Walmart CEO Doug McMillon told stock analysts at the time that much of the pullback in sales growth was planned. Walmart’s year-over-year growth numbers were no longer benefiting from incorporating Jet.com’s sales numbers, since Jet had by then been part of Walmart for more than a year. Sources told me that Lore had also been pressured to pull back on losses in an attempt to better balance out sales growth with profits.
But McMillon did reveal that some “operational” issues also played a role in that deceleration. Those issues were varied, according to former executives, but included seasonal inventory taking up too much space and blocking out merchandise that customers bought frequently year-round, as well as significant miscalculations by existing warehouse leaders over how many packages they could ship out each day during the peak holiday shopping season. Walmart’s warehouse automation systems also experienced issues in both 2016 and 2017.
“Conveyors were a problem, we didn’t hire enough people, there was no forecasting,” a former e-commerce leader told me. “We needed new talent.”
Nate Faust recognized this and quickly began looking outside the company for help. Perhaps not surprisingly, his eyes drifted toward a company with significant e-commerce expertise, one he knew well from his time working there following Quidsi’s sale years earlier.
“[We] just hired a lot of Amazon people,” a former top Walmart supply chain executive told me, “and the Amazon people started to hire other Amazon people.”
In late 2017 and across 2018, a wave of Amazon warehouse and transportation leaders began taking over inside Walmart e-commerce facilities across the country. If Amazon had proven one thing to competitors and consumers alike, it was that it knew how to get packages to customers quickly—first under longtime Bezos deputy Jeff Wilke, and later under his deputy, Dave Clark, a hard-charging former warehouse manager once nicknamed “The Sniper,”1 who would go on to replace Wilke as CEO of Amazon’s worldwide consumer business in 2021.
Amazon’s warehouse strategy succeeded for a bevy of reasons: part process innovation, part automation, and part surveillance, with a technology system that tracked worker movements and performance down to the second.
“I knew that every single time we developed a tool, we are just adding pressure,” a former Amazon data science engineer focused on warehouse metrics told me.2 “The pressure to be consistent and perform every single second there is tremendous.”
That was by design. Amazon’s longtime obsession wasn’t about making life better or easier for its employees; it was about making life better for customers. Seemingly no matter the internal ramifications. And in Amazon’s view, it seemed for long stretches of time, there was no correlation between the two. The business results of Amazon’s approach—rapid growth of Prime memberships and continuous market share gains in e-commerce—suggested that the company was succeeding in its goal. After all, no one at Amazon was being judged on how nice they were.
Jet leaders, on the other hand, liked to talk up the more humane treatment of its employees. Marc Lore once told me he would err on the side of social cohesion even if it led to slower decision-making—much to the shock of the Walmart public relations official in the room. Conversely, one of Amazon’s Leadership Principles includes the section “Leaders have conviction and are tenacious. They do not compromise for the sake of social cohesion.” But funny things happen when your back is against the wall and the pressure is on.
Recruiting warehouse leaders from the leading e-commerce company to a notorious digital laggard wouldn’t be easy. This led Walmart e-commerce leaders to do something that wasn’t particularly popular among some long-timers at Bentonville’s home office: paying big money to flip Amazon employees to the dark side. To court them, the former Jet leaders running Walmart e-commerce green-lit what some insiders saw as extravagant pay packages, with cash and sign-on bonuses for warehouse managers totaling $300,000 annually or more—around double what Walmart’s existing warehouse staff made, though some Walmart e-commerce warehouse leaders who remained were given big pay bumps, too.
When they arrived, Amazon leaders were given free rein on all kinds of decisions, from heavy spending to procure equipment replacement parts to overhauling performance-tracking systems and worker schedules. But in at least one notable case, the new work culture some Amazon leaders imported to Walmart ran into resistance.
If You Can’t Beat ’Em
Jeremy Knight joined Walmart in 2013 as a maintenance mechanic at the company’s Porterville, California, distribution center, repairing conveyor belts and forklifts and doing general preventive maintenance to keep things running smoothly. Distribution centers (DCs) are the Walmart warehouses that store merchandise before it gets shipped to stores. The Porterville DC was the oldest on the West Coast, having opened back in 1991.
“It was a great place to work,” Knight told me. “It felt like everybody was working together for a common goal.”
Weekly lunch cookouts were the norm if the warehouse’s safety metrics were good. When a piece of trash or broken pallet found its way onto the floor, you could bet that the first person who passed it would pick it up and toss it in the garbage.
“I know these sound like little things, but the people in Porterville cared,” Knight said.
Knight eventually moved on in 2016 for a new opportunity at a newly opened Walmart warehouse in Chino, California. But this facility was a not a distribution center; it was a fulfillment center (FC), which meant it was dedicated exclusively to the packing and shipping of online orders, rather than store-bound merchandise. Under Walmart’s previous e-commerce boss, Neil Ashe, the e-commerce division had finally gotten the green light to expand a network of warehouses exclusively dedicated to online orders, rather than having to carve out space in the old-school distribution centers that were mainly used to hold goods headed to Walmart stores.
The Chino FC’s first general manager was a Walmart veteran who previously ran safety and security for distribution centers. Now, in Chino, he was running a 1.2 million-square-foot e-commerce facility and oversaw a workforce of more than one thousand people. Despite these pressures, the Walmart veteran could often be found on the warehouse floor interacting with workers, according to Knight, either checking in on questions or concerns, or sometimes even packing boxes himself.
But there were downsides to longtime Walmart leaders running new e-commerce warehouses. An obvious one was a lack of experience in e-commerce logistics. The other was a tendency for Walmart lifers to become a bit set in their ways.
“With that kind of tenure comes complacency,” a former Walmart e-commerce logistics leader told me. “And there was a lot of that.”
In late 2017, the Amazon takeover began when a new general manager took over in Chino. He increased performance tracking, which former employees admitted was necessary because of lackluster productivity rates—but there was a catch. Several former employees and executives told me that workers were often set up to fail: one of the biggest issues that workers on warehouse floors faced was significant overcrowding of inventory, resulting in widespread difficulties when it came to tracking inventory accurately and knowing which items were where. The Chino Walmart warehouse was in such disarray that, at one point, seventy pallets’ worth of merchandise were unaccounted for in the company’s inventory management software. In real life, the goods existed, and took up lots of space. But if a customer were to look up the product online, Walmart.com would be out of stock.
The new GM from Amazon also instituted a different type of worker shift schedule—called a waterfall—that was common inside Amazon warehouses and aimed to give managers more flexibility. But executives told me that the Chino fulfillment center was not yet operating efficiently enough to handle such a dramatic alteration, and leadership didn’t have great visibility into who was and wasn’t present at work during a given shift. That could be a problem for both productivity and safety reasons. On top of that, worker schedules became less predictable as a result of the overhaul, leading many to feel that they had become a soulless cog in the “Amazonified” machine.
“A lot of Amazon folks know only one playbook,” a former Walmart logistics manager told me.
The dynamic created an environment that felt much more transactional than employees were used to. Morale in Chino noticeably sagged, former employees say. Tensions reached a boiling point when the ex-Amazon GM addressed staff during a monthly business update. He had to deliver some bad news—Knight, the warehouse mechanic, can’t quite remember whether it was about pay raises or something about overtime. Either way, it was not a good update. And when the warehouse boss delivered it in what many thought was an unsympathetic way, the response from the rank-and-file staff was instantaneous—and brutal.
“They booed him off the stage,” Knight told me. “The fact that could happen to the biggest person in the building just shows . . . how crappy people felt. It was the perfect storm of people already being frustrated with management and feeling like none of them cared.”
Within a few months of arriving, the general manager was out and headed back to the online retail giant and, according to the gossip among Walmart employees, to a giant new pay package as well. His quick about-face set off conspiracy theories among some Walmart staff, who imagined Jeff Bezos sending spies into Walmart to infiltrate their retail enemy’s operations, cause chaos, and then report back. I didn’t find a shred of information to back up the speculation, which would be especially surprising since many Amazon imports were doing their best to teach Walmart the Amazon way. But the speculation, however wild, spoke to the distrust between the underpaid and overworked employees expected to execute one of the most critical parts of Walmart’s e-commerce makeover and the newcomers in charge of leading them through it.
Some warehouse managers who’d come over from Amazon were also accused of fostering an all-boys-club, almost fratlike company culture. One former Amazon manager allegedly took subordinates with him to a strip club and asked staff members to charge alcohol on their corporate cards, saying he would approve it even though it was against company policy. These claims appeared in a gender discrimination lawsuit filed against Walmart by a former warehouse automation engineer who alleged, after she was fired, that she had been passed over for a promotion because of her gender. Walmart settled the lawsuit out of court3 and fired the former Amazon manager with a penchant for partying, according to Walmart spokesperson Erin Hulliberger.
Despite the chaos that some felt the Amazon takeover caused, several former Amazon employees hired by Walmart continued to take on more senior roles as warehouse performance improved. In late 2022, for example, Walmart tapped one of them, David Guggina, to oversee Walmart’s entire US supply chain. Jet leaders had placed much of Walmart’s e-commerce supply chain into the hands of those trained by the retailer’s longtime nemesis. As the saying goes: If you can’t beat ’em . . .
The Middle Mile
Remaking its fulfillment center operations in Amazon’s image—for better or worse—was only one piece of how Jet leaders wanted to transform Walmart’s execution of all things logistics, the deeply unsexy stuff that happens before and after an online customer clicks “Buy.” Executives also wanted to rethink Walmart’s reliance on large shipping and delivery carriers like FedEx, which at times had shown cracks in its reliability as online shopping grew both on Walmart.com and beyond.
Once again, they would look to former Amazon employees for help. After all, Amazon knew this problem well, and had spent years creating in-house solutions. It all started in late 2013, when many Amazon customers received Christmas deliveries later than promised, mainly because UPS was overwhelmed by the rise of last-minute holiday shopping online as well as by winter storms. Amazon cast blame on the shipping giant in notes to customers, saying that the online retailer had handed orders off to its shipping partner on time. To make amends for breaking its delivery promise, the online retailer also handed out a slew of $20 gift cards and refunded delivery fees.
Inside Amazon, executives were furious that they had disappointed their customers at the most crucial time of year. To make matters worse, they had little control over the fiasco. As a result, Amazon’s then–logistics chief, Dave Clark, sought out one of his deputies, Mike Indresano, who had joined Amazon a year earlier after spending twenty-four years at FedEx. His experience at FedEx would be critical for Amazon, and there was no love lost between him and his former employer after he was unceremoniously escorted out by FedEx security upon giving notice that he was leaving the logistics titan for Amazon.4
According to Brad Stone’s Amazon Unbound, Clark’s question to Indresano was a burning one: How many sortation centers can you build by the end of 2014? The most Indresano had built at FedEx was four, but his answer to Clark was on an altogether different scale: he said he could build sixteen.
Indresano had experience overseeing this type of facility, called a sortation or “sort” center, at FedEx, but it was uncommon for these centers to be run by an individual retailer, even Amazon. At the time, the vast majority of Amazon’s warehouses were so-called fulfillment centers—giant facilities—some as large as 1.2 million square feet, where warehouse staff would pluck merchandise off shelves and pack it into shipping boxes. Shipping partners like UPS and FedEx would then retrieve the orders from the warehouse and handle getting them to customers’ homes, whether by plane or truck depending on the distance to the final destination.
Sortation centers, on the other hand, would be a new kind of warehouse for Amazon—maybe one-third or one-fourth the size of Amazon’s largest fulfillment centers. At a high level, they would play a key role in allowing Amazon to eventually reduce its shipping costs per package and increase speed of delivery. On top of that, and maybe most importantly, sortation centers gave Amazon more control over customer orders once they left an Amazon fulfillment center, reducing the chance of ever disappointing as many customers as they did during the 2013 holiday season.
These “sort” centers would become part of the so-called middle mile of Amazon’s supply chain. While customer orders would still be packed at the large fulfillment centers, their next step would now be different. Instead of UPS or FedEx picking up the packages from the FC, Amazon would transport the packages to one of its own sortation centers. At the sortation center, a combination of conveyor belts and workers would help organize customer packages into different groupings based on the zip codes of the delivery addresses. From there Amazon would drop off the customer orders at US Postal Service facilities or post offices throughout a given region, letting the USPS handle the most expensive piece of the supply chain: the “last mile” delivery to customers’ homes. Postage per package would now cost Amazon a lot less, since a delivery partner was only taking the package a short distance from the post office to a nearby home or office.
This new process meant Amazon was handling extra steps of the supply chain itself rather than farming them out. But it came with an advantage that convinced company leaders that the extra work would be worth it. In regions where Amazon built sortation centers, Prime members had their order deadline for free two-day delivery extended by nine hours,5 since orders were now remaining within the Amazon supply chain for longer and not being slowed down by all of the other packages, processes, and priorities of shipping partners like UPS and FedEx. The new partnership that the sortation centers created with the USPS also allowed Amazon to persuade the government logistics service to deliver packages on Sunday—a huge step in the evolution of e-commerce that the other shipping carriers had been unwilling to do. Now Prime members who needed merchandise before Monday could avoid weekend trips to stores like Walmart Supercenters, since placing a Prime order on Friday now meant it would arrive on Sunday. That was a huge development in the e-commerce and retail worlds, and another way that Amazon was making its service more convenient than competitors’.
Over time, as Amazon’s sales volume increased, Amazon created its own “last mile” delivery operation, too. Called Amazon Logistics, the delivery network supplemented the work of UPS and the USPS, giving Amazon even more control over the customer experience postpurchase because it was now overseeing some orders all the way to a customer’s front door. Of course, Amazon did it in a way that limited liability and the risk of unionization; it contracted with third-party delivery companies, even fronting as much as $10,000 so aspiring entrepreneurs could more easily create startup delivery operations from scratch. Amazon’s growing logistics operation was creating a massive new moat between itself and Walmart, just as the creation of Amazon Prime had done more than a decade earlier.
While Indresano oversaw the massive sortation center buildout at Amazon—dubbed “the Sweet 16”—he eventually exited in 2017, burnt out and at odds with some of his counterparts who oversaw Amazon’s network of fulfillment centers. The Amazon vice president of transportation left without another job lined up and was considering retirement after a combined thirty years of work between FedEx and Amazon.
But some months later, a friend recommended that Indresano contact Walmart executives, knowing the company was undergoing a digital transformation and might be in the market for someone with his expertise. Indresano was admittedly skeptical of how serious Walmart was about investing in e-commerce, considering its historic struggles in the space. But the lunch recommendation triggered a memory of something one ex-Amazon colleague had told him when he was considering leaving the e-commerce titan: “Whatever you do, don’t go to Walmart.”
Indresano, however, was bitter about the way his Amazon career had ended, including feeling that this former colleague might have been happy to see him go. Maybe he should go work at Walmart after all, he thought. He quickly reached out to Nate Faust, the Jet executive in charge of Walmart’s e-commerce supply chain. The two had spent some time together years earlier when Indresano was still at FedEx and Faust was working at Amazon after Bezos had acquired Diapers.com. And coincidentally, Faust already had Indresano atop the list of external candidates whom he planned to contact for the top e-commerce transportation role. So around six months after their first chat, in the summer of 2018, Indresano joined Walmart. There was much work to do. And Indresano wouldn’t be alone. He was followed by several other senior Amazon employees as well.
Like Indresano, they would receive huge pay packages to make the move to the brick-and-mortar rival. As part of courting them, Jet leaders handed several of the Amazon defectors a VP title in the e-commerce division, despite that being a no-no in the brick-and-mortar division of Walmart. As a result, Indresano and a few others were advised not to use the job title in their email signatures because it would piss off long-timers who’d be furious over the supposed double standard.
“Some people said, ‘Hell no,’ and some people said ‘Okay, if that makes life easier and helps my funding needs get approved to achieve my end goals, then fine,’” a former e-commerce executive told me.
“It was . . . a political battle royale,” another former executive said.
Nonetheless, things were looking up for Walmart. At the time, its e-commerce sales were growing briskly thanks in large part to the expansion of the online grocery business. But Faust, Lore, and other former Jet executives knew they needed to drastically improve the customer experience for the types of merchandise that would be shipped from warehouses to customer doors in the future. They also knew that a big part of that process, as Amazon had realized many years earlier, was to take more control over what happened after packages left their warehouses. That often meant handing over control to FedEx, which handled at least 80 percent of Walmart’s online orders in the US, according to former insiders.
In many ways, the FedEx relationship made sense for Walmart. Having one central national partner responsible for the majority of online orders meant, at least in theory, a more simplified end-to-end process for Walmart. And since e-commerce was still a tiny fraction of Walmart’s overall sales—a significant portion of its growth was coming from those online orders for groceries that customers picked up at stores themselves—it made sense not to complicate something that was relatively immaterial to Walmart’s current success.
Yet as the popularity of online shopping grew, both overall and on Walmart.com, some e-commerce leaders became concerned that FedEx was not investing enough to keep up with demand. During the 2018 holiday season, for example, FedEx only delivered 77.5 percent of its total packages on time, which meant around 1 out of every 4 packages shipped by FedEx would arrive later than promised. That same holiday season, UPS was at 86 percent reliability—about 1 out of every 7 packages. But Indresano knew firsthand that UPS could also fail, as the carrier did in spectacular fashion during the 2013 holiday season that convinced Amazon to start taking control of the “middle mile” and “last mile” of its supply chain, too.
As a result, Indresano set out to develop alternative options for Walmart to take more control over its e-commerce supply chain. One method, which Indresano knew well, was to replicate what he and his team had built over at Amazon. That was, to construct a network of regional sortation centers to cut per-package delivery costs and speed up delivery times, while taking more package volume away from FedEx and handing it over to the US Postal Service through local post offices.
But Indresano and his top associates had devised a more detailed plan than that. Few inside Walmart knew of it, and news of it never leaked to the press. Under this secretive plan, Walmart would partner with a third-party logistics company called Newgistics, owned by Pitney Bowes, which handles warehousing and the middle mile for e-commerce brands before handing orders off to US post offices for last-mile delivery, like Amazon started to do once it built its own sortation network.
The plan called for Walmart and Newgistics to set up a separate company through a joint venture, in which both companies would have an ownership stake. Newgistics would include its own sortation centers in the new company, with Walmart promising to invest money to potentially build dozens more. These sortation centers would then handle both the packages of Newgistics e-commerce customers as well as Walmart’s e-commerce package volume. Since Newgistics already partnered with the USPS for delivery to customers’ doors, Walmart would piggyback on that relationship to do the same. The new joint company might also be called on to deliver customer orders to Walmart stores, when a customer selected store pickup for an item that was only stocked in a warehouse and not on a store shelf. Walmart’s network of thousands of in-house truck drivers and trucks might also play a role in transporting goods between facilities under this plan.
To those involved in the negotiations, such an arrangement seemed like a win-win. The additional package volume from Walmart could reduce per-package cost for Newgistics, since the company’s facilities would handle a greater volume of packages within the existing warehouse infrastructure that it was already paying to operate. As a result, productivity would increase, creating a more efficient operation. Plus, the buildout of more sortation centers with Walmart’s money would also eventually translate into faster delivery speeds, and greater geographic coverage, for Newgistics’ other retailer partners and their own customers as well.
For Walmart, the joint venture and network of new sortation centers would play an important role in taking more control over its delivery destiny. While it would require significant capital investment, it promised to reduce per-package shipping costs in the long run—something traditional Walmart execs could get behind. But, more importantly for someone trained in the ways of Amazon customer obsession, it would bring more reliability and speed to Walmart.com customer orders that couldn’t be fulfilled out of a store.
“In e-commerce, the definition of success every year is around peak season,” a former executive said. “And around peak, Amazon is the only retailer with few delivery issues because they own their own destiny.”
But as months went by, members of Indresano’s team found themselves questioning why Marc Lore, the chief executive of Walmart’s US e-commerce operations, didn’t seem to have the authority to unilaterally approve the plan. At each turn, the path to a yes—which at one point seemed to be a sure thing—was obstructed by some new delay or roadblock, which did little to build confidence among Walmart’s e-commerce executives.
While the joint venture remained in corporate purgatory, Walmart looked for other ways to step up its delivery game and steal media and customer spotlight from Amazon. In the spring of 2019, Walmart was preparing to make a big announcement: free next-day delivery for hundreds of thousands of items, with no membership needed—just an online order that totaled at least $35.
Internally, the decision caused fierce debate. Faust, Lore, and other executives believed the next-day program would re-create some of the magic of Jet.com’s Smart Cart. Walmart customers would receive their purchases faster, and Walmart would only qualify items for the program that could ship out of a single warehouse.
“It looked like it was a speed play,” an executive in favor of the program told me, “but it was actually to incentivize consumers to build baskets that were all coming from a single building. One, it was a great experience. And two, it’s a more profitable order.”
Those in favor of the program also believed that the added restrictions of a next-day service would force the retailer to tighten up its logistics efforts throughout the company. Sink or swim. Still, Indresano was opposed to the decision, feeling the company was still disappointing customers too frequently with free two-day shipping—the first big service that launched under the Lore regime in early 2017—to start making promises on next-day deliveries. He also confided in colleagues that the launch seemed more designed to generate buzz among Walmart investors than to deliver an excellent feature to customers. But he was in no position to veto it, and the plan moved forward. The one compromise was that the next-day option would be turned off during the peak holiday season, when Walmart was already struggling to fulfill more conservative delivery promises.
Yet before Walmart could even announce the new offering, the executives would be in for a surprise: Amazon announced plans to shorten its flagship Amazon Prime delivery promise from two-day shipping to one-day. Walmart executives were stunned, suspecting Amazon had somehow learned of their plans in advance. In response, Walmart did something out of character: it sniped back with a tweet.
“One-day free shipping . . . without a membership fee,” Walmart posted from its main Twitter account the day after Amazon’s announcement. “Now THAT would be groundbreaking. Stay tuned.”
A few weeks later, in May 2019, Walmart announced the next-day-delivery offer on a selection of around 200,000 items—a fraction of what Amazon was making available through its competing offer. The corporate sniping—however petty—returned to Twitter.
“Others are trying to up their fast shipping game,” Amazon tweeted. “Fact is, Amazon customers in thousands of cities across 44 major metropolitan areas already have access to millions of items with free SAME DAY delivery. Customers are smart—they know the difference.”
The Eleventh Hour
By the middle of 2019, almost a year after Indresano had joined Walmart to create and execute an e-commerce transportation strategy, some of his team were starting to lose hope that the joint venture would happen. But that July, Indresano and a few other e-commerce leaders finally presented to McMillon, the CFO, Brett Biggs, and other top Walmart execs in what they believed to be a final review. The feedback was good and they were pleased to hear what seemed to be full-on support pending the outcome of separate talks with Walmart’s existing shipping partner, FedEx.
Indresano was also among the Walmart executives responsible for negotiating a new strategic deal with FedEx. The talks would seriously impact the futures of both companies, and so both McMillon and FedEx’s founder and then-CEO Fred Smith were present in Bentonville at times. FedEx leaders knew that Walmart was considering taking more control over its e-commerce supply chain by building more sortation centers and handing off more of its e-commerce package volume to the US Postal Service. But the idea of a joint venture with Newgistics remained confidential.
When top FedEx and Walmart leaders met that same month, FedEx’s Smith let McMillon and the rest of the room know what he thought of Walmart building its own sortation network and partnering more closely with the postal service. In short, he wasn’t a fan. At the time, the USPS was experiencing brutal—and very public—financial challenges, and, thanks to its relationship with Amazon, found itself in then-president Donald Trump’s crosshairs. Amazon itself was also a public punching bag for Trump, since Bezos owned the Washington Post, whose coverage of Trump the former president detested. Under these circumstances, some top Walmart officials were understandably nervous about turning their backs on FedEx for USPS, so one could imagine Smith’s words resonating.
Indresano was also in the room and volleyed back at his former FedEx CEO with an opposing point of view. McMillon, all the while, did not let on all that he was thinking, leaving e-commerce executives wondering where the joint venture stood.
Soon after, Indresano would find out, as he was handed a new directive: get the deal done with FedEx. The joint venture with Newgistics wasn’t happening, he was told, nor was any other plan for building out dozens of Walmart sortation centers and establishing a deeper relationship with the postal service.
“At the eleventh hour, it was ‘No,’” someone familiar with the discussions told me.
It remained unclear how much Smith’s words impacted McMillon’s decision. But for Indresano, it didn’t matter. Shortly after hearing that Walmart leadership was choosing to double down with FedEx rather than pursue his joint venture, Indresano resigned. He was still in disbelief that Walmart hired him with a monster pay package only to veto the plan he had architected. With Indresano out of the picture, Nate Faust, the outgoing e-commerce supply chain boss, along with an Indresano deputy named Scott Ruffin, carried the FedEx negotiations across the finish line. Ruffin had worked for Indresano on his sortation center initiative at Amazon, and later led the development of Amazon’s own cargo air service, Amazon Air. He would stay at Walmart another year before leaving in 2020 to launch his own startup. The new company, called Pandion, went to market with the goal of building a network of—what else—high-tech sortation center warehouses for e-commerce companies.
Years later, a former Walmart e-commerce executive pointed to the death of the joint venture idea as his biggest regret.
“That would be the one thing that I wish we had pushed harder for,” the official said. “Without controlling the middle mile, you can never really control the last mile.”
Without more control of the last mile, the questions became: Compared to Amazon, could Walmart ever truly satisfy consumers’ insatiable hunger for rapid delivery? And were Walmart leaders even on the same page in wanting to do so?