The FredEx conundrum
FedEx’s visionary founder is an old-style disrupter in danger of being disrupted
For outsiders, FedEx is synonymous with the business it pioneered: the overnight delivery of packages. For insiders, it might just as well be called FredEx. It is virtually indistinguishable from its founder, Fred Smith, who has been boss since 1971. The 75- year-old, who came up with his idea for air freighting packages at Yale University, is the stuff of folklore. Some of it is apocryphal, such as the story that he got a C at Yale for a paper outlining his idea (he can’t recall the grade). But one tale is, if anything, too good to check. In its early days, as the firm flirted with bankruptcy, he saved it with a lucky wager at a blackjack table in Las Vegas.
Mr Smith is an entrepreneur of the old school. The ex-marine dispatched his first 14 planes in 1973—on the first day they carried 186 packages. FedEx is now the biggest cargo airline in the world, with 681 aircraft and an average volume of 15m packages a day. He has played politics as he plays cards, be that securing deregulation of the air-cargo industry in the 1970s, winning protection from American unions or schmoozing congressmen at the FedEx Field, home to the Washington Redskins. Among American firms, FedEx has long been one of the most recognisable, admired and popular to work for. In January the board in effect gave Mr Smith tenure for life, by waiving the firm’s retirement age of 75 for executives. “Like a Supreme Court judge,” chuckles one admirer.