How FedEx's Success Grew Overnight
WHEN a company's colloquial name starts being used as a verb, management sees little need to fight it. For years, people in offices across the United States have talked about ``fedexing packages'' and receiving or sending ``fedexes.''
This summer the Federal Express Corporation took official notice by making FedEx a brand name. The company letterhead is changing. And during the next three years, the company's fleet of 458 aircraft and thousands of trucks will be repainted.
One reason for the new brand name is that it is easier for nonnative English speakers to say and remember. International business is the company's fastest growing segment. FedEx now operates in 187 countries and bills itself as the world's largest express carrier.
In 1983, Federal Express became the first company in American business history to report $1 billion in revenues within 10 years after start-up - without the benefit of mergers or acquisitions. Revenues last year were $7.8 billion.
It all began in April 1973 in Hangar No. 7, a World War II-era building that now sits on the edge of the massive FedEx complex at Memphis International Airport. Former Marine pilot Frederick Smith bought 14 small aircraft and founded a new company. That first night somewhere between seven and 18 packages were sorted and sent on their way, says Bill Carroll, an early employee of the company. ``No one quite remembers the real number,'' he says. ``Tracking of packages was not a big issue back then.''
Mr. Smith created the overnight package delivery industry in the face of great skepticism, but his success was aided by the deregulation of air cargo in 1977. This allowed the use of larger aircraft such as Boeing 727s and McDonnell-Douglas DC-10s. Now, the company is shifting to Airbus aircraft which are more fuel-efficient and run with two-men crews rather than three. ``Everything we've ever wanted in a freighter aircraft, we've got in the Airbus,'' says John Harter, an employee at the Memphis Superhub.
Smith chose Memphis as the hub of his hub-and-spokes system for two reasons: climate and location. ``This airport is rarely closed for ice and snow,'' Mr. Harter says. ``And we can be just about anywhere in the United States in about three hours - in a hurry.''