Frederick W. Smith, who founded FedEx Express Corp. fifty-four years ago and revolutionized the parcel delivery business by using aircraft for overnight delivery, died Saturday, the company said on its website. He was 80.
“Fred was more than just the pioneer of an industry and the founder of our great company. He was the heart and soul of FedEx – its People-Service-Profit culture, values, integrity, and spirit. He was a mentor to many and a source of inspiration to all. He was also a proud father, grandfather, husband, Marine, and friend. Please keep the entire Smith family in your thoughts and prayers during this difficult time,” said CEO Raj Subramaniam in a message to FedEx employees.
FedEx has grown into an $87.7 billion enterprise with the largest air cargo fleet in the world. It not only transformed the express parcel industry, but became instrumental to the U.S. economy and international trade by transporting documents and packages. Today, it moves more than $2 trillion worth of goods annually, relying on more than 700 aircraft serving 650 airports around the world, 220,000 vehicles and about 5,000 operating facilities. It also operates an extensive U.S. ground network, the largest less-than-truckload carrier in the United States and a major supply chain division.
“Fred Smith is still a legend. In his lifetime he built a company that is as big as UPS, which had a 70-year head start,” said Satish Jindel, a parcel industry expert and president of ShipMatrix who years ago helped FedEx acquire RPS and turn it into FedEx Ground.
Fred Smith was born in Marks, Mississippi, in 1944. As a Yale undergraduate, Fred Smith wrote a term paper outlining a system to accommodate urgent, time-sensitive shipments such as medicine, computer parts, and electronics. He received an average grade.
After four years of service in the Marines, including two tours of duty in Vietnam where he received the Silver Star, Bronze Star and two Purple Hearts, he purchased in 1970 the controlling interest in a Little Rock, Arkansas-based aircraft maintenance company, Ark Aviation Sales, run by his stepfather and turned its focus to trading used jets. The next year, he established the FedEx Express Corp. with his $4 million inheritance and $91 million in venture capital.
Two years later he relocated to Memphis, Tennessee, because of its central location and lack of severe weather conditions, which helped maintain schedule reliability for the airline.
On the first night of continuous operation, 389 Federal Express workers and 14 Dassault Falcon jets delivered 186 packages overnight to 25 U.S. cities – giving birth to the modern express industry.
Smith developed FedEx as a freight version of a bank clearing house where one bank clearing house was located in the middle of affiliate banks and all representatives were sent to the central location to exchange materials, according to one of his biographies.
Smith had to go to great lengths to keep the company afloat in the early days. In one instance, after a crucial business loan was denied, he took the company’s last $5,000 to Las Vegas and won $27,000 gambling on blackjack to cover the company’s $24,000 fuel bill. It kept FedEx alive for one more week, according to a biography.
In 1977, FedEx purchased seven Boeing 727 aircraft, each with a cargo capacity of 40,000 pounds – almost seven times that of the Dassault Falcon. The company was publicly listed on the New York Stock Exchange in 1978 and in 1981 it moved into its global air sortation hub at Memphis International Airport.
Ten years after its launch, FedEx achieved $1 billion in revenue. In 1984, FedEx acquired Gelco Express International, a worldwide courier with service to 84 countries. It also launched operations in the Asia Pacific and regular scheduled flights to Europe. The following year it opened its European headquarters in Brussels, Belgium.
In 1989, FedEx purchased cargo airline Flying Tigers. FedEx acquired TNT Express, a major European parcel carrier, in 2016.
In 2000, Smith made an appearance as himself in the Tom Hanks movie “Cast Away,” which was filmed on location at FedEx’s home in Memphis.
Smith was a fierce advocate for free trade in Washington, where friends included President George W. Bush and Sen. John McCain. Bush offered Smith the job of defense secretary for his second term, but Smith declined to spend time with his terminally ill daughter. Smith met with President Donald Trump at the White House earlier this year.
Smith is a member of the Aviation Hall of Fame and the Business Hall of Fame. In 2014, Fortune Magazine named him among the world’s 50 greatest leaders.
Click here for more FreightWaves/American Shipper stories by Eric Kulisch.
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