The largest express transportation company in the world is FedEx, headquartered in Memphis. Frederick W. Smith, a Memphis businessman and U.S. Marine Corps veteran, began a company named Federal Express in April 1973 with fourteen small aircraft flying from the Memphis International Airport. Smith wanted to build a reliable overnight delivery system; few others thought it was possible. Smith had hoped to attract the business of the Federal Reserve System, but when that business failed to develop–the bankers and their advisers did not see how the company could ever work or make a profit–Smith began to develop other markets in commerce, medical supplies, computer parts, and electronics. He also turned to aggressive advertising to sell his delivery service to potential customers.
The company reported its first profits in July 1975, but not until the deregulation of air cargo in 1977 did Federal Express experience rapid expansion. Deregulation allowed the company to use larger jets for transport. In 1978 the company was listed in the New York Stock Exchange. Three years later, in 1981, the company established its first international service (to Canada) and launched its very popular “overnight letter” delivery. By 1983 Federal Express had become the first U.S. corporation to achieve $1 billion in revenues within a decade without relying on mergers or acquisitions. The next year, however, the corporation acquired Gelco Express International in order to expand overseas operations to Europe and Asia; direct scheduled service to Japan began in 1988.
The personal computer revolution of the early to mid-1980s spurred Federal Express’s next growth phase as the company established its PC-based automated shipping system in 1984 and then in 1986 instituted the “SuperTracker” system of handheld bar-code scanners that allows the company and individual customers to track the shipping progress of any item in the system.
Federal Express’s acquisition of Tiger International in 1989 made the company the world’s largest full-service all-cargo airline; six years later it bought Evergreen International Airlines, giving Federal Express aviation rights in China.
In 1994 the company officially changed its name to FedEx and also launched its Web site. In addition to its world headquarters in Memphis, FedEx established an Asian headquarters in Hong Kong, a European headquarters in Brussels, and a Latin American headquarters in Miami. Its 1997 fiscal year revenues were $11.5 billion. The following year, 1998, brought major changes to the company. After its acquisition of Caliber Systems, it created a holding company named FDX Corporation. Two years later, that corporation was renamed FedEx Corporation, and by year’s end the corporation listed six independent operating companies: Fed Ex, FedEx Express, FedEx Ground, FedEx Freight, FedEx Custom Critical, and FedEx Trade Networks.
In a generation FedEx has become an economic giant as a worldwide brand name and the second largest private employer in Tennessee. Its impact on the economy of Memphis and surrounding counties cannot be overemphasized. In the Memphis Business Journal of June 3, 2000, Larry Henson, research director for the Memphis Area Chamber of Commerce, noted that between 1995 and 1999 major clients of FedEx were directly or indirectly tied to $462 million in capital investment and the addition of 6,400 jobs to the local economy. FedEx itself employed over 26,000 at its Memphis operations and 30,000 total statewide. The company has been so successful in its twenty-five years of existence that the name “FedEx” has become synonymous with the overnight delivery of packages and mail, representing a level of corporate identity shared by a mere handful of major American companies.
FedEx’s facilities at the Memphis International Airport serve as its central distribution point and have expanded from a small space within an old hangar to a vast complex of buildings on the edge of the airport property. Federal Express’s Aircraft Maintenance Facility, which opened in 1995, services most of the company’s huge fleet of airplanes, including approximately 160 727s and 60 DC-10s. Its many late-night flights have made Memphis one of the busiest airports in the nation. The average package volume of the entire Federal Express system in early 2001 was 5 million shipments every business day, with another 100 million transactions occurring daily through the company’s virtual networks.