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In 1965, Yale University undergraduate Frederick W. Smith wrote
a termpaper about the passenger route systems used by most
airfreight shippers,which he viewed as economically inadequate.
Smith wrote of the need forshippers to have a system designed
specifically for airfreight that couldaccommodate time-sensitive
shipments such as medicines, computer parts
and electronics.
In August of 1971 following a stint in the military, Smith
bought controllinginterest in Arkansas Aviation Sales, located in
Little Rock, Ark. Whileoperating his new firm, Smith identified the
tremendous difficulty in gettingpackages and other airfreight
delivered within one to two days. This dilemmamotivated him to do
the necessary research for resolving the inefficientdistribution
system. Thus, the idea for Federal Express was born: a companythat
revolutionized global business practices and now defines speed
andreliability.
Federal Express was so-named due to the patriotic meaning
associated withthe word "Federal," which suggested an interest in
nationwide economicactivity. At that time, Smith hoped to obtain a
contract with the FederalReserve Bank and, although the proposal
was denied, he believed the namewas a particularly good one for
attracting public attention and maintainingname recognition.
The company incorporated in June 1971 and officially began
operations onApril 17, 1973, with the launch of 14 small aircraft
from Memphis InternationalAirport. On that night, Federal Express
delivered 186 packages to 25 U.S.cities from Rochester, NY, to
Miami, Fla.
Company headquarters were moved to Memphis, Tenn., a city
selected for itsgeographical center to the original target market
cities for small packages. Inaddition, the Memphis weather was
excellent and rarely caused closures atMemphis International
Airport. The airport was also willing to make thenecessary
improvements for the operation and had additional hangar
spacereadily available.
Though the company did not show a profit until July 1975, it
soon became thepremier carrier of high-priority goods in the
marketplace and the standard
setter for the industry it established.
In the mid-1970s, Federal Express took a leading role in
lobbying for air cargoderegulation that finally came in 1977. These
changes allowed FederalExpress to use larger aircraft (such as
Boeing 727s and McDonnell-DouglasDC-10s) and spurred the company's
rapid growth. Today FedEx Express hasthe world's largest all-cargo
air fleet, including McDonnell-Douglass MD-11sand Airbus A-300s and
A-310s. The planes have a total daily lift capacity ofmore than
26.5 million pounds. In a 24-hour period, the fleet travels
nearly500,000 miles while its couriers log 2.5 million miles a day
the equivalent of100 trips around the earth.
