FREDERICK W. SMITH
“Revolutionary overnight package delivery service”
In 1981 Dun’s Business Month named Federal Express Corporation one of the nation’s five best managed companies. In fiscal 1982 the company’s revenues were over $800 million – not bad for an organization that lost $29 million in its first 26 months of operation and whose payroll once had to be met with its founder’s winnings at blackjack.
The story of Federal Express is the story of one man, founder Fred Smith. As a Yale undergraduate, Smith submitted an overdue economics paper proposing a revolutionary “hub-and-spokes” overnight package delivery service. “To cut cost and time,” he wrote, “packages from all over the country would be flown to a central point, there to be distributed and flown out again to their destination.” His professor was unimpressed and gave Smith an acceptable “gentleman’s C” for his effort.
Following his graduation in 1966, Smith went to Vietnam as a Marine Platoon leader, was wounded twice, and was promoted to company commander. He enrolled in flight school, reasoning that his second tour of duty would be in Hawaii or Japan.
Wrong. He went right back to Vietnam in forward air control, flying more than 200 ground-support missions. By the time of his discharge, Smith had received the Bronze and Silver Stars as well as a dozen Air Medals.
Smith left Vietnam weary of destruction and eager to begin constructing something. At age 28 he put together a venture capital package that totaled nearly $80 million, a sum reputed to be the largest ever raised for a new company, and Federal Express was born.
Federal has grown from a handful of packages and aircraft on its first day of operation in 1973 to more than 140,000 shipments daily and a fleet of more than 60 aircraft. The company also operates 4,500 radio-equipped vans, which pick up and deliver shipments, and has a work force of over 12,000.
Almost two decades have passed since Smith received his “gentleman’s C.” It hasn’t always been easy, but today his revolutionary overnight package delivery service is flying high.