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FedEx Express, formerly Federal Express, is a cargo airline based in Memphis, Tennessee, United States. It is the world's largest airline in terms of freight tons flown and the world's fourth largest in terms of fleet size. It is a subsidiary of FedEx Corporation, delivering packages and freight to more than 375 destinations in nearly every country each day. FedEx Express is the world's largest express transportation company.
Fred Smith, early years
Its headquarters are in Memphis with its global "SuperHub" located at Memphis International Airport. In the United States, FedEx Express has a national hub at Indianapolis International Airport. Regional hubs are located at Ted Stevens Anchorage International Airport, Oakland International Airport, Newark Liberty International Airport, Fort Worth Alliance Airport and Miami International Airport. International regional hubs are located at Paris-Charles de Gaulle Airport, Guangzhou Baiyun International Airport, Kansai International Airport, Toronto Pearson International Airport and Cologne Bonn Airport. The Mid-Atlantic hub at Piedmont Triad International Airport opened June 2, 2009 but due to a downturn in package volume is not operating anywhere near the expected levels.
The concept for what became Federal Express came to Fred Smith while he was studying at Yale University. For a class there, he submitted a paper which argued that in modern technological society time meant money more than ever before and with the advent of miniaturized electronic circuitry, very small components had become extremely valuable. He argued that the consumer society was becoming increasingly hungry for mass-produced electronic items, but the decentralizing effect induced by these very devices gave manufacturers tremendous logistic problems in delivering the items. Smith felt that the necessary delivery speed could only be achieved by using air transport. But he believed that the U.S. air cargo system was so inflexible and bound by regulations at that time that it was completely incapable of making sufficiently fast deliveries. Plus, the U.S. air cargo industry was highly unsuited to the role. Its system depended on cooperation between companies, as interlining was often necessary to get a consignment from point A to point B, and the industry relied heavily on cargo forwarders to fill hold space and perform doorstep deliveries.
In his paper, Smith proposed a new concept—have one carrier be responsible for a piece of cargo from local pick-up right through to ultimate delivery, operating its own aircraft, depots, posting stations and delivery vans. To ensure accurate sorting and dispatching of every item of freight, the carrier would fly it from all of its pickup stations to a central clearinghouse, from where the entire operation would be controlled. He submitted the paper to the professor teaching the course, who supposedly gave the paper the grade of "C". The actual grade has been debated. Despite the professor's opinion, Smith held on to the idea.
Smith founded the Federal Express Corporation in 1971. It was originally founded in Little Rock, Arkansas in 1971, as Smith was operating Little Rock Airmotive there. After a lack of support from the Little Rock National Airport, Smith moved the company to Memphis, Tennessee and the Memphis International Airport in 1973.
First FedEx Express aircraft, a Dassault Falcon 20 named Wendy, on display at Steven F. Udvar-Hazy Center.
The company started overnight operations on April 17, 1973, with fourteen Dassault Falcon 20s that connected twenty-five cities in the United States. That night, 186 packages were carried. Services included both overnight and two-day package and envelope delivery services, as well as Courier Pak. Federal Express began to market itself as "the freight service company with 550-mile-per-hour delivery trucks". However, the company began to experience financial difficulties, losing up to a million USD a month. While waiting for a flight home to Memphis from Chicago after being turned down for capital by General Dynamics, Smith impulsively hopped a flight to Las Vegas, where he won $27,000 playing blackjack. The winnings enabled the cash-strapped company to meet payroll the following Monday. "The $27,000 wasn’t decisive, but it was an omen that things would get better," Smith says. In the end, he raised somewhere between $50 and $70 million, from twenty of the USA's leading risk venture speculators, including such companies as the First National City Bank of New York and the Bank of America in California. At the time, Federal Express was the most highly financed new company in U.S. history, in terms of venture capital.
Federal Express installed its first drop box in 1975 which allowed customers to drop off packages without going to a company local branch. In 1976, the company became profitable with an average volume of 19,000 parcels per day.
A McDonnell Douglas MD-11 in the Federal Express livery used until 1994
A 1977 legislative change (Public Law 95-163) removed restrictions on the routes operated by all-cargo airlines, and enabled Federal Express to purchase its first large aircraft: seven Boeing 727-100s. In 1978, the company went public and was listed on The New York Stock Exchange. The following year it became the first shipping company to use a computer to manage packages when it launched "COSMOS" (Customers, Operations and Services Master Online System), a centralized computer system to manage people, packages, vehicles and weather scenarios in real time. In 1980 the company implemented "DADS" (Digitally Assisted Dispatch System) to coordinate on-call pickups for customers; this system allows customers to schedule pickups for the same day.
In 1980, Federal Express began service to a further 90 cities in the United States. The following year the company introduced its overnight letter to compete with the U.S. Postal Service's Express Mail, and allowed document shipping for the first time. Later in 1981 it started international operations with service to Canada, and officially opened its "SuperHub" at the Memphis International Airport.
Federal Express' sales topped $1 billion for the first time in 1983. In the same year the company introduced ZapMail, a fax service that guaranteed the delivery of up to five pages in less than two hours for $35. ZapMail would later become a huge failure for the company, costing it hundreds of millions of dollars.
In 1986, the company introduced the "SuperTracker", a hand-held bar code scanner which brought parcel tracking to the shipping industry for the first time. Federal Express continued its rapid expansion in the late 1980s, and opened its hub at Newark Liberty International Airport in 1986 and at Indianapolis International Airport and Oakland International Airport in 1988. In 1989, the company acquired Flying Tiger Line to expand its international service, and subsequently opened a hub at Ted Stevens Anchorage International Airport to accommodate this new, expanded service. As the volume of international shipments increased, Federal Express created Clear Electronic Customs Clearance System to expedite regulatory clearance while cargo is en route.
A FedEx Express delivery truck, showing the dual branding, both "FedEx" and "Federal Express" that the company used from 1994 to 2000
A FedEx Express delivery truck showing the current "FedEx" branding
In 1994, Federal Express adopted the "FedEx" name, formalizing the abbreviation that until then was unofficial. Also that year, FedEx launched Fedex.com as the first transportation web site to offer online package tracking, which allowed customers to conduct business via the internet. In 1995, the company acquired air routes from Evergreen International to start services to China, and opened an Asia and Pacific hub in Subic Bay International Airport in the Philippines. In 1997 FedEx opened its hub at Fort Worth Alliance Airport and in 1999 opened a European hub at Charles de Gaulle Airport in France. In 2000, the company officially dropped the "Federal Express" name and became "FedEx Express" to distinguish its express shipping service from others offered by its parent company FedEx Corporation.
In 2001, FedEx Express signed a 7-year contract to transport Express Mail and Priority Mail for the United States Postal Service. This contract allowed FedEx to place drop boxes at every USPS post office. In 2007, the contract was extended until September 2013. The USPS continues to be the largest customer of FedEx Express.
In December 2006, FedEx Express acquired the British courier company ANC Holdings Limited for £120 million. The acquisition added 35 sort facilities to the FedEx network and the company introduced Newark, Memphis, and Indianapolis routes directly to UK airports instead of stopping at FedEx's European hub at Charles de Gaulle Airport. In September 2007, ANC was rebranded as FedEx UK. FedEx Express also acquired Flying-Cargo Hungary Kft to expand service in Eastern Europe.
The late-2000s recession hit parent company FedEx Corporation and its express division hard. Many companies looking for ways to save money stopped shipping or moved to cheaper alternatives, such as surface shipping. FedEx Corporation announced large network capacity reductions at FedEx Express, including retiring some of its oldest and least efficient aircraft such as the McDonnell Douglas DC-10 and the Airbus A310. FedEx also announced layoffs and work hour reductions at some of its hubs.
In December 2008, FedEx postponed delivery of the new Boeing 777 Freighter; four were delivered in 2010 as previously agreed, but in 2011, FedEx only took delivery of four, rather than the 10 originally planned. The remaining aircraft will be delivered in 2012 and 2013.
FedEx Express closed a hub for the first time in its history, when operations at its Asian-Pacific hub at Subic Bay International Airport in the Philippines ceased on February 6, 2009. The operations were transferred to Guangzhou Baiyun International Airport in southern China. FedEx Express had planned to open the new Chinese hub in December 2008 but in November 2008, the company delayed the opening until early 2009 citing the need to fully test the new hub.
On June 2, 2009, FedEx opened the new hub building at Piedmont Triad International Airport in Greensboro, North Carolina. FedEx announced in December 2008, that it still intended to open the building on time, despite the bad economy. The hub's operations would be scaled back from 1,500 employees to only 160, the size of the previous operations at the much smaller sorting facility. FedEx gave no time line as to when the hub will be operating at expected hub levels. The hub had been delayed many years since FedEx first picked the airport to be its Mid-Atlantic U.S. hub back in 1998. FedEx had to fight many complaints from nearby homeowners about the anticipated noise generated by its aircraft, because most of its flights take place at night. A third runway was built to accommodate the hub operation and the extra aircraft.
On October 27, 2010, FedEx opened its Central and Eastern European hub at Cologne Bonn Airport. The hub features a fully automated sorting system that can process up to 18,000 packages per hour. The roof of the hub features FedEx's largest solar power installation, producing 800,000 kilowatt hours per year.
Fedex Express had agreed to buy up to 30 ex United Airlines 757-200s. Eleven are firm orders due to be delivered between 2013 and 2015, and 16 are options.
FedEx Express MD-11F landing at Frankfurt Airport
FedEx Express operates the world's largest cargo air fleet with over 600 aircraft, and is the largest operator of the Airbus A300, Airbus A310, ATR 42, Cessna 208, McDonnell Douglas DC-10/MD-10, and the McDonnell Douglas MD-11. The company took delivery of the last Boeing 727 built (N217FE) in September 1984 and the last A300/A310 built (N692FE) in July 2007. To be able to respond to changing freight demand quickly (i.e., more cargo that can fit on a plane), or to prevent cargo from being stranded on AOG planes, FedEx Express tends to keep a number of empty or underloaded planes (usually 5) in the air during the overnight to "sweep" the USA.
In 2007, FedEx revealed plans to acquire 90 Boeing 757-200s. Because production ended in 2005, FedEx was left with no choice but to acquire secondhand aircraft from other airlines at a cost of US$2.6 billion to replace its aging Boeing 727 fleet. The 757's debut for revenue service was on May 28, 2008. The last Boeing 727 was retired on June 21, 2013, after 35 years of service with FedEx.
FedEx Express was scheduled to be the launch airline for the Airbus A380 freighter, having ordered ten for delivery between 2008 and 2011 with options on ten more. The company had planned to introduce the first aircraft into service in August 2008 for use on routes between hubs in the United States and Asia. Faced with A380 delays of more than two years, FedEx canceled these orders and replaced them with an order for 15 Boeing 777Fs with an option for 15 more, to be delivered from 2009 through 2011. FedEx has said that Airbus will allow it to transfer its nonrefundable deposits to purchases of future aircraft, and has stated it may consider the A380F when the A380 program is less affected by construction delays. In December 2008, FedEx postponed delivery of some of the 777s: four were to be delivered in 2010 as previously agreed, and four more in 2011, rather than the 10 originally planned. Five more will arrive in 2012, and two in 2013. In January 2009, FedEx exercised its options to buy 15 more 777 freighters and acquired options for a further 15.
On December 15, 2011, FedEx announced an order for 27 Boeing 767-300 Freighters to replace its MD-10 aircraft. The 767s will be delivered between 2014 and 2018, with three aircraft being delivered in 2014, and with six aircraft delivered each year between 2015 and 2018. The airline also delayed deliveries of 11 777 Freighters currently on order, but converted two options to firm orders.
On July 2, 2012, FedEx announced an order for an additional 15 Boeing 767-300 freighters to replace its MD-10 and A310-200 aircraft. As part of this announcement, they converted four of their 777 Freighter orders to 767-300 Freighters, for a total of 19 new 767s. The new orders and conversions were reflected on the July 5, 2012, update to Boeing's Order and Delivery website. The first Boeing 767-300 Freighter was delivered to the airline on September 4, 2013.
With one of the world's largest air fleets, FedEx Express is the largest member of the United States Civil Reserve Air Fleet in terms of aircraft pledged.
The first Dassault Falcon 20C delivered to FedEx (N8FE) is on display at the Steven F. Udvar-Hazy Center of the National Air and Space Museum at the Smithsonian Institution.
FedEx Feeder is the branding applied to all FedEx Express propeller-driven aircraft which feed packages to and from airports served by larger jet aircraft.
In the United States and Canada, FedEx Express operates FedEx Feeder on a damp lease program where the contractor will lease the aircraft from the FedEx fleet and provide a crew to operate the aircraft solely for FedEx. All of the feeder aircraft operated in the United States and Canada are owned by FedEx and because of this all of the aircraft are in the FedEx Feeder livery. Just like regional airlines, the contractor will operate the aircraft with their own flight number and call sign.
Outside the United States with the exception of Morningstar Air Express, the contractor will supply their own aircraft, which may or may not be in the FedEx Feeder livery. Depending on the arrangement with FedEx, the contractor may be able to carry cargo for other companies with the FedEx cargo.
Navistar eStar all-electric van in Los Angeles in 2010. The EV was manufactured in the U.S. under licensed from Modec.
In 2003, FedEx Express introduced hybrid electric/diesel trucks into its fleet. At the time the company had hoped to replace its entire 30,000 W700 delivery truck fleet with the hybrid, but in June 2009 only 170 were on the road. Ninety-three of these operate in the United States in New York, Tampa, Sacramento and Washington, D.C.; the rest operate in Tokyo, Toronto, and Turin. FedEx blamed the low number on a lack of investment from other major companies in hybrid technology. It had hoped that other companies would order hybrid trucks, and that tax credits would be issued by the United States government to reduce the cost.
FedEx claimed that the hybrid truck in the 2003 test decreases soot by 96 percent and emissions by 65 percent. It also claimed that the truck gets more than 50% better gas mileage while still having the same cargo capacity as a conventional truck.
In 2009, FedEx Express partnered with Iveco and started a new test program of hybrid electric/diesel vans. The test program will consist of 10 hybrid vans deployed in Milan and Turin, Italy. FedEx claims the new vans will have a 26.5% reduction in fuel consumption and a decrease in carbon dioxide emissions of 7.5 tons when compared to FedEx's standard vehicle. The trial will continue until May 2010 and after the program's conclusion, FedEx will evaluate if the vans should be deployed on a larger scale.
In July 2009, FedEx Express partnered with Freightliner and Eaton Corporation to convert 92 delivery trucks into hybrids. The conversions boosted FedEx's fleet of hybrid-electric vehicles by more than 50 percent to 264. The trucks were placed into service in Los Angeles, San Diego and San Francisco.
In November 2009, FedEx Express purchased 51 gasoline-electric hybrid vehicles from Azure Dynamics. The new trucks will be put into service in The Bronx, New York City. The Bronx will be FedEx's first all hybrid station. The addition will bring FedEx Express’ fleet of hybrid electric and electric vehicles to 325.