In this article, we’ll explore how FedEx’s founder and leader, Fred Smith, leveraged extraordinary strategic vision and meticulous execution to build the FedEx empire—and how he turned early failures into stepping 

stones for a business saga that would redefine an industry.

Image source: FedEx

Federal Express (FedEx) grew from a startup with a few aircraft into the world’s largest cargo airline and a global enabler of commerce, marking one of the most remarkable tales in American business. Fred Smith, the company’s founder, led FedEx for nearly 50 years as CEO until his passing at age 80.

Former employees describe Smith as a hands-on executive with unparalleled foresight, particularly in aircraft deals. Steve Fortune, a FedEx analyst in the 1980s, recalled: “He wasn’t afraid to roll up his sleeves and dive into details. Sometimes he’d bypass the management chain to talk directly with the person he needed. In the early days, he’d personally observe sorting operations and chat with employees. His memory was astonishing—he remembered names, faces, and specifics.”

Today, FedEx operates 710 aircraft, including nearly 400 mainline jets and 310 contractor-run turboprops that shuttle cargo from smaller cities to its hubs. Its fleet includes Boeing 757s (large narrow-body freighters), Airbus A300-600s (small wide-bodies), Boeing 767s (mid-size wide-bodies), MD-11s, and Boeing 777s. According to the International Air Transport Association (IATA), FedEx carries more cargo than any other airline.

On its first night of service in 1973, FedEx delivered 186 packages to 25 cities using 14 Dassault Falcon business jets. Ron Anderson, FedEx’s VP of aircraft acquisition and sales from 1974 to 1991, reflected on Smith’s fleet strategy in a 2023 Time on Wings podcast: “Fred Smith understood the global aircraft market better than anyone alive today.”

In its infancy, FedEx’s Memphis airport office resembled a trailer, hemorrhaging $1 million monthly with just 400 employees. Now, the company employs over 500,000 people worldwide, serves 220+ countries and territories, moves nearly $2 trillion worth of goods annually, and handles more than 17 million packages daily.

Smith initially acquired Falcons from Pan Am, which had ordered them for a corporate jet venture before backing out. Anderson noted that Smith bought 23 Falcons stored in the desert, persuading businessman Lester Crown to guarantee loans for modifications. When demand surged, their value doubled within a year, providing FedEx’s lifeline. “We opened three new stations weekly—someone had to negotiate airport deals and secure facilities. Two of us flew around in a Piper Aero to make it happen,” Anderson said.

Smith later shifted to larger planes like Boeing 727s after deregulation allowed heavier aircraft. “Bigger jets meant exponential profit growth,” Anderson explained. FedEx bought 727s from United Airlines, LAN Chile, and Eastern Airlines, leveraging economies of scale.

Competitors soon emerged: Emery Air Freight launched dedicated cargo jets in the mid-1970s, and UPS started its airline in 1984. FedEx opted for DC-10s over Boeing 747s for key routes, acquiring them from Continental Airlines and others. The 1989 purchase of Flying Tiger Line (with its DC-8s) further expanded FedEx’s fleet, though six DC-8s were sold to rival UPS.

By 1980, FedEx had sold 30 of its 32 remaining Falcons—one, named after Smith’s daughter Wendy, now resides in the Smithsonian.

In 1982, Smith created Federal Express Aviation Services, a data unit tracking global aircraft transactions. Fortune managed this initiative, compiling records from FAA microfilms and a Swedish firm’s global network. The database gave FedEx a competitive edge and was later sold to Aviation Week.

Smith’s journey wasn’t without missteps. In 1984, FedEx launched Zapmail, a fax-based document service predicated on the slow adoption of office fax machines. The company invested heavily in NEC fax units, aiming to replace physical deliveries with transmissions. But as fax prices dropped, customers bought their own, dooming Zapmail.

Fred Smith’s legacy transcends entrepreneurship—it’s a testament to conviction, innovation, and resilience. From pioneering aircraft acquisitions to reshaping global logistics, his vision shattered industry norms and ushered in a new era.

Today, FedEx isn’t just a logistics titan; it embodies the power of perseverance and ingenuity. Smith’s leadership and strategic brilliance built an empire, leaving an enduring blueprint for future generations.

END

Public Account: Cross-border E-commerce Logistics OmniSage