Stories of giants: FedEx

The history of FedEx is a story of a guy who had $4 million. What would you do with forty kilos of dollars? Would you quit your job and go on a never ending holiday? Frederick Smith took an $80 million loan, bought several planes and set up a courier company, which after few years of activity had millions in debts and was on the verge of bankruptcy.

Why didn’t FedEx’s history start with “Cast Away” by Robert Zemeckis? Because it would be too obvious, just like quitting work and going on holiday after receiving a multi-million inheritance. The story of Tom Hanks on a desert island will be described later on. First, the story of a certain Marine Corps soldier.

Yale’s graduate goes to war

Frederick Wallace Smith celebrated his 76th birthday in 2020. Planes have fascinated him since childhood. In his youth he started to fly as an amateur pilot. During his studies, he was accompanied on his flights by John Kerry. Future President George W. Bush was also among Smith’s friends.

Smith, as a student at Yale, wrote a term paper in which he laid out the concept of a quick delivery service of parcels by air. His idea did not arouse the special enthusiasm of his teacher – he got an average mark for his work. He graduated from the university in 1966 and in the same year he joined the Marine Corps.

Contrary to expectations, he did not pilot aircraft during 3 years of service. He did two shifts in Vietnam and completed about 200 combat missions as an observer. However, he had used his war time to watch how the US Navy’s logistics system works. When he was dismissed from service, he bought some shares in an airline company and began trading in planes. However, the business of his life was still waiting for implementation.

Blackjack, or motivational training in Las Vegas

Maybe it sounds like just a fairy tale, but it is so encouraging that it is worth being retold. On June 18, 1971, Smith registered his company under the business name Federal Express. The name suggested that the company was somehow related to a government agency. And that was the intention: Smith wanted to provide a quick head start for his company to apply for government assignments. A simple trick turned out to be quite effective – it added seriousness and gained the trust of customers. Unfortunately, the company providing services with postal planes hit a period of sharp increases in fuel prices. In addition, continuous investment in fleet development did not allow for saving for a rainy day. Thus, after some years of activity Federal Express found itself on the verge of bankruptcy.

And here is the time for the legend. If it was filmed, it could begin with a scene in which the desperate Smith takes the last $ 5,000 from the cash register. In the early 1970s, this amount was enough to buy a stunning red Ford Mustang and drive along the highway. Of course, with the song “Riders on the storm”. It is not certain whether Smith, the former Marine, liked hippie bands or if this scene ever happened, but nevertheless Smith disappeared for a week. He came back with about $ 30,000, which allowed him to pay the current bills. The rumours say that the money came from playing blackjack at one of the casinos in Las Vegas.

$ 30,000 didn’t fix the airline’s finances. However, after this adventure, Smith regained his mojo and did not declare bankruptcy. After a few more years, Federal Express began to make profits. In 1984, the company set about conquering Europe and Asia. Currently, the company provides its services to customers in 220 countries and has the largest private air fleet in the world. These are mainly Airbuses and Boeings – over 600 machines in total.

The longest and cheapest advert in the world

The film “Cast Away” – the story of a FedEx employee who after a plane crash ends up on a desert island – cost $ 90 million. Tom Hanks, as the actor in the leading role, won a Golden Globe and was nominated for an Oscar. Every child in the USA knows FedEx thanks to this film, which also made the company’s brand popular in Europe and Asia. The proceeds from the sale of tickets significantly exceeded $ 400 million. If you divide this number by 10 (the average ticket price), you will realise that over 40 million people around the world have seen the more than two-hour advert. The film is watched on the internet even nowadays, and still promotes FedEx.

The question about the financial contribution of the FedEx group to the production of “Cast Away” has appeared for years in every interview with Zemeckis. The company’s management admitted that the film – starting with the crash of a plane full of courier parcels – ultimately proved to be an excellent, extremely effective promotion for the brand. So, how much did FedEx contribute to the production of the film? Everyone knows the solution to this question: not a dollar. The director was asked equally often about the contents of the package, which Chuck Noland (Tom Hanks) delivered in the last scene of the film. This was the only package that the castaway had decided not to open, as he had vowed to deliver this parcel to the correct address, if only he survived. Zemeckis, tormented by journalists in one of the interviews, once (jokingly) claimed it was … a waterproof, solar-powered satellite phone.