FedEx, originally known as Federal Express
, is the largest air freight
carrier in the world by a long shot. It began its life as a senior thesis
written by Fred Smith
in 1965, while attending Yale University
. Smith wrote that air freight companies should have their own route networks, rather than merely flying over passenger routes. His professor
gave him a C
for the paper, saying that the idea would never work in real life
Fast forward to 1971. Smith had graduated from Yale and served for several years in the military. Now, he was ready to put his idea to action, and put together enough venture capital to purchase 14 Dassault Falcon business jets fitted for freight carriage. He then received an air taxi permit from the Federal Aviation Administration, which allowed him to fly those airplanes to any civil airport in the United States. In 1973, Federal Express began its operations at Memphis International Airport: on its first night, it carried a whopping 186 packages between 25 U.S. cities! Smith ignored this ignominious start, and decided to push his company until it crossed over into profitability.
Until 1975, Federal Express made no money, but a constant inflow of new investment, coupled with an aggressive marketing campaign that touted next-day deliveries, brought more and more business to the company. By 1977, they were operating a large fleet of Boeing 727's, and even those weren't enough to handle the demand. At the time, the 727 was the largest aircraft that air taxi carriers were legally allowed to operate, so FedEx had to lobby Congress to change the law. Congress agreed, and FedEx put in orders for new McDonnell Douglas DC-10's.
FedEx's business exploded during the late 70's and early 80's, from 10,000 parcels a night in 1974 to 1 million parcels a night in 1988. In 1983, they posted over $1 billion in revenues: the fastest corporate revenue growth in history. Soon afterward, they began their international freight service, and after absorbing Flying Tigers and the China route awards of Evergreen International in the early 1990's, were flying cargo to almost every country on the planet.
Later, FedEx bought Kinko's, America's largest chain of document services shops, and Roadway, one of its largest trucking operations.
They are much more than a household name.. they're also a verb ("I'll just FedEx that contract to you"). Just to give you an idea of how big FedEx is:
- Number of packages delivered each night: 3.3 million
- Capacity of FedEx's fleet: 26.5 million pounds
- Distance traveled each day by FedEx's fleet: 500,000 miles
- Distance traveled each day by FedEx's couriers: 2.5 million miles
- Annual revenues: $5.5 billion
- Market cap: $6.6 billion
If you want to see what FedEx looks like on the inside, get some popcorn and rent Cast Away
. As big as they are, it's easy to see how they could lose Tom Hanks
and then forget about him.