FedEx Delivers: How the World's Leading Shipping Company Keeps Innovating and Outperforming the Competition

Chapter 1

Innovating and Outperforming the Competition

Our vast progress in transportation, past and future, is only a symbol of the progress that is possible by constantly striving toward new horizons in every human activity. Who can say what new horizons lie before us if we can but maintain the initiative and develop the imagination to penetrate them—to the end that greater degrees of well being may be enjoyed by everyone, everywhere.

—Alfred P. Sloan Jr.

CREATING A NEW INDUSTRY . . .

On FedEx's first night of operation, April 17, 1973, a small group of people stood around a makeshift system and sorted 186 packages. They then loaded them onto 14 small planes that promptly took off for 25 cities across the United States. On that night, FedEx became the first transportation company dedicated to overnight express package delivery. Thirty-two years later, FedEx handles over five million packages every day serving 215 countries around the globe.

FedEx's revenue grew from just $6 million in 1973 to over $24 billion in 2004. In 1983, it was the first company to grow to $1 billion within the first 10 years of its existence, without acquisitions. During the first three years of its operation (1973–1975), FedEx lost over $29 million as it built its infrastructure and established the network that would allow it to start making a profit. For the past three years (2002–2004), its net income has been over $2.3 billion.

Today's FedEx, which has constantly evolved to meet customer needs, consists ...