History Of Fed Ex Essay Research Paper

History Of Fed Ex Essay, Research Paper

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Patrick Perry

Webb

BA-410

04/01/2001

How “Absolutely, Positively Overnight!” Came To Be

Mark Twain once said, “The man with a new idea is a crank until the idea succeeds”. This phrase could be applied to Fred Smith and Federal Express. From their beginnings in Little Rock, Arkansas in the early 70’s delivering 186 packages overnight to 25 U.S. cities, to three decades later parlaying it’s $20 billion dollar corporation into no less than five major operation companies. FedEx has become the world’s leader in global express transportation, providing fast delivery of documents, packages and freight shipments worldwide. As a result, the name “Fed Ex” is used in much the same manner as name “Band Aid” has today. Many use this term generically meaning all forms of overnight or rapid delivery systems. The powerful FedEx brand and the ever-familiar purple, orange and white colored letters are a welcome sight as deadlines near.

History of Moving Freight – The mail actually saved the future of passenger flight, but ironically outgrew it and needed its own logistical changes.

Fledging airmail service started in the U.S in 1918. The Post Office began regular delivery service between New York and Washington D.C., totaling a distance of 218

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miles, using four U.S. Army Curtiss Jenny’s in which about 140 pounds of mail could be loaded into the front cockpits. Although before that, Aeromarine Airways flew passengers, airmail, and freight between Key West and Havana in November 1919 (Air Trans 95,105,319). The regular handling of larger packages did not occur until later on in the 1920’s. In those days, and for obvious reasons, air mail was considered pretty much a “suicide club” due to the lack of proper equipment, established airways and related equipment. Thus, the pioneers of early airmail routes must be credited for their efforts, as they established through their sacrifices, the foundation upon which commercial air transportation was built.

The honor of being the first air freight operator would probably have to go to Henry Ford, who at the time owned Ford Air Transport and was just as well known in aviation as in the automobile industry. The first original all-cargo air carriers were Slick Airways, United States Airlines, the Flying Tiger Line, and Air News. All were certified in 1949, but most were gone within a 5-year period (Air Trans 323).

Commercial passenger airlines were struggling into existence in the U.S. in the mid 1920’s when much of Europe was already covered by a network of air routes. Only one minor American passenger line had flourished for any length of time – Aeromarine Airways. After a number of widely publicized accidents in the ocean off of Florida, Aeromarine was in decline, and was also turning the financial community against investments in airline enterprises. Americans remained skeptical about air travel, and while not as fast as planes, ground transportation was much safer. There were no strong

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objections however to improving an existing government service. So it happened that organized air transport in the U.S. started with flying the mail. And the way the early airmail service developed provided the springboard that would enable American commercial aviation, by the late 1920s, to catch up with the Europeans and then to surpass them (Air Mail 158).

The air freight industry was a dull and unpromising business until the 1960’s when commercial airlines jumped into the competition in an all-out effort to attract business from the nation’s industrial firms. Commercial airlines struggled to make a profit. They were convinced that putting cargo in the extensive belly space below the passenger deck could be a lucrative profit center. Delta, Eastern and United and others continued their all-cargo service during the remainder of that decade despite questions about the profitability of such service. Most of the carriers lost money continuously from 1961 through 1973 and largely abandoned their all-cargo carriers (APO 114).

The large jumbo jets purchased to compete in the passenger market did not contribute much revenue from hauling freight in their underbellies. The capacity in the bellies was so adequate that management of these airlines felt this was an efficient replacement for the space foregone by the abandonment of the all-cargo planes. Deep down, management was discounting freight and treating it as a by-product or appendage.

These wide-body jets were designed first and foremost to serve passengers. Ironically, the enormous increase in size the jumbos represented had exactly the opposite

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effect management sought. They made freight handling more difficult, not less (APO 125).

Most airlines finally discouraged the small package business in the early 1970’s. They were not equipped to handle small packages. In fact, small packages were a headache, they were an unprofitably “dead weight” because the cost of shipments was considered high. What the airlines thought they wanted was freight weighing over 100 pounds, so they left the responsibility for handling small items to Emery and all of the other freight forwarders.

The airlines had their troubles in the early 1970’s and the small package problem was

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