Executive Q&A: James Boshaw Is Pushing the Envelope at PAC Worldwide

PACKAGE DEAL: PAC Worldwide CEO James Boshaw oversees more than 800 employees working at plants in the United States, Mexico and Malaysia. Photo by John Vicory.

This article appears in print in the January 2018 issue. Click here for a free subscription.

When e-commerce sales rise, revenues rocket at Redmond-based PAC Worldwide Corporation. Thats because more products are going out packed in size-right padded envelopes and small-parcel mailers manufactured by PAC Worldwide. James Boshaw, CEO since 2008, expects revenue, which climbed 26 percent to $195 million last year, to more than double this year to $400 million.

EARLY DAYS: I grew up in Bellevue and Lake Sammamish and studied economics at the University of Washington. After graduating, I went to work in sales for a corrugated box maker in Renton and helped them set up a factory in Phoenix, Arizona, where I worked from 1996 to 1999.

FAMILY BUSINESS: My parents launched the company in 1975, supplying Airborne Express and UPS with mailers. My father is charming and charismatic and always thinking strategically. Mom is the details person, setting up the systems to make sure that all the orders coming in can be processed and shipped. I picked up some of my dads sales instincts and strategic thinking, but I also picked up a lot of the team building that my mom embodies.

MANUFACTURING: My parents sold the company to a manufacturer in 1988 because they were getting pinched by escalating costs from their existing suppliers. When that didnt work out, my parents, who had divorced in 1990, bought the business back and built a factory in Ohio to manufacture the mailers. We now have two factories in Ohio and one each in Arizona, Mexico and Malaysia, with a sixth in Pennsylvania opening in 2018. We have 100 percent of the padded mailers business of FedEx, UPS and the U.S. Postal Service.

COMPETITIVE ADVANTAGE: We take off-the-shelf components and the bubble wrap we manufacture and put them together in a very special way that allows us to make many different products on one line. We are also able to offer more printed solutions, which is difficult because its like printing on a waffle. You have to do some tricky secret squirrel stuff to make it work.

ADAPTATION: We are always looking to increase our value proposition for customers. On-time completion of service orders is north of 98.5 percent. Our quality, built into our processes, is fantastic. We dont know if one of our products is going to be used to mail a joke gift or a valuable stock certificate, so we need to know how to produce a perfect quality product and duplicate that over a billion times a year. Two billion times this year.

3M: In 2002, we began making mailers for 3M to sell in retail stores. Before 3M, we had 15 to 20 product categories. With 3M, we had over 300. To manage the complexity, we brought in specialists in managing supply-chain logistics and introduced a more robust ERP [enterprise resource planning] software system.

AUTOMATION: Labor is a big challenge. With 850 employees worldwide, mostly in the United States, we pride ourselves on paying people well and giving them a lot of training and opportunities for development. But we find it difficult to attract people into manual-labor type roles. We also have trouble finding skilled labor to operate our different equipment, so while we are automated, we are going to automate further, particularly the tedious jobs.

PRODUCT DEVELOPMENT: We have a couple dozen engineers on payroll, including electrical, mechanical, chemical and material engineers. We also have a couple very specialized people with unique minds who can consider special features for customers.

RIGHT-SIZING: Ten years ago, we introduced a machine called the PACjacket, which allows high-volume shippers to package products quickly and easily. We provide large rolls of padded materials that attach to the machine, and for whatever product you have, it seals it on all four sides with a minimum of waste. In 2015, FedEx and UPS changed the way they charge for freight to include volume, so now you are paying for all the air in those boxes filled with air pockets. We can now show e-commerce companies that if they ship in a mailer, they can save a lot of money on shipping.

TAMPER-EVIDENT BAGS: In Mexico, we make bags that banks use to seal in large amounts of cash. You can get in with a pair of scissors, but you cant do it without the other end knowing its been tampered with.

RECYCLING: The way we manufacture bubble wrap allows it to be recycled. A lot of competitors put in nylon, which makes it nonrecyclable. Our factory in Mexico makes document mailers of cardboard made from 100 percent recycled content at a nearby paper mill.

CHALLENGES: Keeping pace with the scale and velocity of the growth to support e-commerce. The demand and growth opportunity are exciting, but its also a little scary. We are investing more in 2017 and early 2018 than we have in the previous 15 years combined. E-commerce is going to keep growing. A lot of people are getting their groceries online. We developed a cold chain box liner to keep products cool during shipment. Its also recyclable.

CULTURE: One thing that keeps me up at night is how to maintain our culture in the face of the growth we are experiencing. We are very collaborative. Im a big believer in harmony and I think its important for people to treat each other with respect. We hold employees accountable, but we also empower them. Id like to believe that anyone can effect change in the company. Every year we send 10 to 20 people on development and training programs to teach management, leadership, communications and problem-solving skills. We give them a real-world problem at PAC and they come up with creative, thoughtful solutions. We also have a program to develop the next generation of managers in PAC that is mentorship based.

SEATTLE: Im conflicted about all the growth here. Im a businessman, but Im also born and raised here and I think its getting way too crowded.