Blame Harden, The Washington Post, February 22, 1981, Pg. 10
THE IDEA WAS TO BUY A BUNCH OF JETS, FLY ONLY AT NIGHT, SHUFFLE PACKAGESAT ONE CENTRAL LOCATION, PICK UP AND DELIVER TO CUSTOMER'S DOORSTEPS ANDCHARGE OODLES OF MONEY. IT WORKED!
A moonless, winter midnight in Memphis beside the Mississippi and it'stime for the nightly miracle. Forty-eight purple-tailed jets, stuffed with90,832 terribly important packages, slide down out of the windless Tennesseesky. Four hours from now the packages will be shuffled and gone, off toBuffalo, Burbank, Bangor and 15,000 other communities. All terribly important,all shuffled, all gone.
Somewhere between here and Washington, moving at 517 miles an hour inthe hold of Boeing 727, is a six-pound box of monkey kidney tissue thatthe Oregon State Public Health Laboratory needs by noon tomorrow. A rhesusmonkey gave his life to science two weeks ago in the Flow Laboratoriesof McLean. His kidney tissues are fading fast. If the package doesn't arrivein Portland tomorrow, the tissue will be useless for a lab test that'ssupposed to isolate influenza. If Federal Express, the overnight packageairline, muffs it, shuffles the kidneys wrong in Memphis, the monkey willhave died in vain.
When it absolutely, positively has to be there overnight, why -- inthe name of modern technology, the bottom line and all that is holy incorporate America -- does it first have to come to the town where ElvisPresley died?
One reason is that the father of Federal Express lives here. That'sFred Smith, and, by all accounts, Fred Smith is a helluva guy. Listen toone man who works for him: "Fred's a 36-year-old former Marine who's attractive,intelligent and rich. He has the same effect on a crowd as John Kennedy.He could walk into Yankee Stadium and everyone would turn their heads andstare. Fred Smith is the kind of man you want to root for. You want himto score."
Frederick W. Smith has scored; since he founded Federal Express eightyears ago, he has amassed a net worth of $92 million. Fortune magazinedescribes his company as one of the top 10 business triumphs of the 1970s.Last year Federal Express had gross revenues of $415.4 million and netincome of $38.7 million, up 81 percent from 1979. Smith was the first tocash in on the national need for overnight delivery of computer components,legal documents and monkey kidneys.
Inspiration struck when Smith attended Yale in the mid-1960s. Desperateto find a subject for a much procrastinated economics paper Smith stayedup late one night and stumbled upon his legendary idea: Buy a fleet ofjets, fly only in the middle of the night, shuffle packages at one centrallylocated hub, pick up and deliver to customers' doorsteps and charge oodlesof money. He got a C on. the paper.
"I had the advantage of not knowing anything," Smith recalls. His modelwas the phone company, which uses a central switching exchange to transfercalls from distant points. As an ignorant undergraduate, Smith remembersthinking: "With the hub, the aggregate of all transmission would be enormouslyefficient."
The storybook epiphany at Yale is just one chapter in Smith's storybooklife. Born the son of a millionaire Memphis interstate bus entrepreneur,Smith suffered as a child from Perthes' disease, a rare hip-bone ailment.He taught himself how to beat up bullies with his crutches. He overcamethis disease, became a pilot at age 15 and played first-string footballat Memphis University School. After graduating with honors from Yale, hejoined the Marines and as a pilot flew more than 200 combat missions, winningfive medals, including the Bronze and Silver stars.
Since 1972, Smith has proved himself a young Arthur in corporate Camelot,extracting money from stone hearted investors with an almost mystical ease.In the largest venture capital deal in American history, he raised $91million, in addition to his $4 million inheritance, to fund Federal forits first three years. Despite Smith's sexy idea, the company founderednear bankruptcy for more than two years, losing $29 million in its first26 months. To help bail out Federal, Smith says he once flew to LasVegaswith
$200, won $26,000 in blackjack and took the money home to Memphisto help meet his payroll.
"I didn't know anything about gambling. There must be some sort of foreordinationfor the company," Smith says.
More about the amazing Fred Smith later. It's now 2:15 a.m. in Memphisand the Portland bound monkey kidneys, along with 27,063 pounds of cargo,have just landed on a Federal 727 out of Baltimore Washington Internationalairport. The shuffle is about to begin.
After taxing from the Memphis airport to the attached Federal Expresspackage sorting complex, the 727 with the monkey kidneys aboard pokes itsnose into a sprawling U-shaped hub building. Like dairy cows in a milkbarn, the 727 and 47 other jets (including two giant DC-10s, 13 other 727sand 32 smaller French made Dassault Falcons) crowd around the hub to droptheir freight and slurp fuel. The Federal fleet goes through 225,000 gallonsof jet fuel a day. A cargo door on the port side of the 727 is thrown open,disgorging seven tent shaped aluminum cargo containers. Hooked togetherlike boxcars, the containers are pulled into position where an insomniacFederal Express army of 705 mostly part-time sorters unloads them, tossingpackages on conveyor belts.
The night spectacle of the sort -- pinball like flappers swatting packagesoff conveyor belts, honking and lurching electric tractors, a herd of jetsgleaming in harsh white light -- is presided over by a giant digital clockon top of the hub. At 12:20 a.m., the clock was set to count down from120 minutes. The sort was supposed to be done when the clock ran out. Itwasn't. A DC-8 from Los Angeles, carrying about 15 percent of the night'spackages, arrived late.
Alongside the conveyor belts, the part-timers, primarily local collegestudents working from 12:30 a.m. to 3:30 a.m., have sorted stranger andmore threatening things than monkey kidneys.
They've sorted: an eight-foot-long bright green plastic pickle (whichwasn't particularly threatening), canisters of xenon 133 radioactive gas(which were), peek-a-boo panties from Frederick's of Hollywood, radioactivehuman sperm, baby body parts, laboratory rats (some of which have escapedinto the hub) and thousands and thousands of electronic gizmos with nameslike TRW Cinch Connections and Racal Vadie data channel modems. The electronicdevices, primarily replacement parts for computers, amount to about a fourthof Federal's business. The record package count for one night, set duringthe Christmas rush in December, is 100,331.
On that one night, Federal Express took in about $2.5 million.It isn't cheap to ship a package overnight through Memphis. The monkeykidneys, weighing six pounds -- two pounds less than the average packagecost $34.84 to ship.
Gene Powell, the 727 captain who will fly the monkey kidneys to Portlandthis morning, has no idea how the packages are sorted. Powell, a 41-year-oldMississippi farm boy who's been flying for Federal since its inception,doesn't have to touch a single package to make his $91,000 a year. At 2:45a.m., in the flight operation center (about 400 yards and two light yearsfrom the package handlers), he's eating buttered popcorn with copilot DonGrant They're worried about the weather in Seattle, an intermediate stop,along with Denver, on the Portland flight. Their flight engineer, MarkGatling has already gone out to a 727 parked near the hub to warm up thecockpit and check over the plane.
"It ain't good, is it?" Powell asks Grant, who has just received a weatherreport indicating heavy fog at Boeing Field in Seattle. The airfield isforecast to be "illegal" for landings until late morning because of lowvisibility.
"This means I got to go to work," says Grant, a hulking 44-year-oldformer Marine fighter pilot. He looks up alternate airports -- Yakima,Moses Lake, Spokane. But a decision doesn't have to be made right away.
"We've been released (by federal flight controllers) to Denver," Powelltells his copilot. "From there we'll see if we can get to Seattle."
At 3:10, Powell, Grant and scores of pilots -- dressed smartly in powderblue shirts with epaulets, dark blue ties, trousers, overcoats and flightcaps -- scramble to waiting shuttle buses on the tarmac. Jets are alreadypulling out, jamming up near the take-off runway, engines screaming. Thegritty smell of jet fuel lies heavy on the night air. "Looks like there'san attack going on somewhere, Powell says in the bus, en route to a 727named Nicole. The pre dawn scene has a discombobulated World War II romance:It's "Twelve O'Clock High" in Memphis with packages and purple airplanes.
In the cockpit of Nicole, the pilot copilot and engineer strap themselvesin, commence a liturgy of gauge checking and start the three jet engines.At 4:03 Nicole takes off, with 36,290 pounds of packages in the back wherepassengers usually sit. The plane is 90 percent full. Captain Powell doesnot introduce himself to the packages, welcome them to the friendly skiesof Federal Express or point out the twinkling lights of Little Rock, Fayettevilleor Tulsa.
"Packages don't get sick, they don't bitch and they don't spill theirdrinks," says Powell. He makes no attempt to fly around bumpy air for theconvenience of the monkey kidneys. Yet his job is astoundingly similarto that of pilots who fly passengers. Federal pilots operate under thesame federal flight regulations, have equivalent training, undergo thesame twice-a-year medical examinations and check flights and make aboutthe same money as airline passenger pilots. Powell's yearly salary of $91,000,Grant's $60,000 and Gatling's $45,000 for no more than 80 hours flyingtime a month put them above average for passenger pilots, slightly higherthan United Airlines, the nation's largest passenger air carrier. The pilotsspend about 15 days a month out of town.
By airline industry standards, Federal Express pays its 420 pilots welland has excellent benefits. Because the young company has grown quickly(with revenues nearly doubling every two years), its pilots have gainedseniority faster than their passenger flying counterparts. Federal hasthe youngest DC-8 captain in the United States: Terry Crosby, 35 yearsold, who makes $105,000 a year. A pilot can become a 727 captain at Federalafter six years whereas attaining a similar position with a major airlinecould take 20 years. Federal's waiting list of qualified pilots who wantjobs is 6,500 names long.
There are, however, disadvantages to being a pilot in this flyby nightoperation. Federal pilots feel passenger pilots look down on them.
"They think of us as dirt ball, has-been, beer belching pilots withleather jackets and silk scarves," says Eddie Storo, a pilot who's beenwith Federal two years. "They expect us to grow up and come fly passengers."
Also, Federal owns relatively old airplanes acquired from other airlines.Nicole, for instance, a 13-year-old former United jet with 22,739 takeoffsand landings, has spent 32,345 hours in the air and flown approximately11,756,000 miles. Excellent maintenance, the pilots say, mitigates theage problem. But nothing mitigates the pilot's major complaint -- flyingby night, only flying by night. That, they say, makes life miserable.
At 31,000 feet over Arkansas, with the autopilot flying Nicole to Denverand little to do in the cockpit but kill time, Capt. Powell and his crewbemoan their lousy hours. Says Powell: "When I'm not flying [which is abouthalf the time] I still live like most ordinary people -- the daylight cycle,grocery shopping, church and that stuff. But I have to stay up all nightto work. The end result is you lose sleep. If that doesn't bother you,that's great, but it bothers me. When I work, I'm almost always uncomfortable."
Many Federal pilots believe they are shaving years off their lives byflying at night. Mark Gatling, the 31-year-old flight engineer on boardNicole, has worked the nights for two years and says the hours are killinghim: "I don't see how I could last 29 more years [until retirement at age65]in this business."
Dr. Saul B. Sells, a research professor and director of the Instituteof Behavioral Research at Texas Christian University in Fort Worth, Tex..says that while sleep interruption can make life seem miserable, the precisephysiological effects are unknown. He has begun a study of Federal pilotsto look at the effect of constant time zone changes and accumulated fatigueon moods and possible premature aging.
Night flying, however, apparently isn't dangerous. Federal, the nation'slargest airline in unduplicated mile flown, has never had a fatal planecrash. The worst accident occurred in October of 1975 when a Falcon triedto take off in Warwick, R.I., and smashed into a DC-9 and a 727 on therunway. Airports are usually empty and air traffic very light when FederalExpress planes are working.
On the runway in Denver at 4:48 Mountain Standard Time. It's dark andmercilessly cold and only one other aircraft besides Nicole can be seenmoving. A bundled-up ground crew of four (Federal has 8,233 employees;4,750 are in Memphis, the rest spread out in places like this) labors onthe runway. With a hydraulic loader, they pull four cargo containers weighing15,000 pounds out of the plane and stuff them into a tractor trailer rig.
No packages bound for Seattle are loaded here because every packagethat Federal ships must first go to Memphis for the sort. Ludicrous asit may sound, a package shipped from Denver to Seattle flies to Memphisfirst, then back to Denver and then to Seattle.
Nicole has burned 2,560 gallons of fuel to get here from Memphis. Sherefuels, needing 5,230 gallons of fuel for the Seattle flight. But thepilots, having heard only sketchy weather details during the flight, stilldon't know if they can file a flight plan for Seattle.
Powell and Grant leave the airplane to call the Federal Express flightoperations center in Memphis which has a computer link to Eastern Airline'snational weather forecasting center in Atlanta. After 76 minutes on theground, the pilots return to Nicole, strap in, go through the preflightliturgy and take off. Atlanta says Seattle is legal.
In winter, bad weather more than anything else forces Federal to renegeon its promise of overnight delivery. Chicago snows in, Seattle fogs over,Newark ices up. Federal claims and its regular customers confirm that about97 percent of the packages get through on time. (The Postal Service, bycomparison 96 percent on-time overnight delivery for its "express guaranteed"mail.) Weather accounts for 1 percent of Federal's delays; mechanical failureof the jets, improper addressing, 'miss sorts" and theft account for therest. Federal says it loses about 160 packages a month, or about .002 percentof each night's shuffle.
To deal with the goofs that a $14-million-a-year-plus advertising campaignclaims do not occur (television commercials in which a long-faced secretaryis shown staring at a telephone and the announcer says, "They wait andthey wait for the complaint that never comes"), there are 50 tracers inMemphis who soothe outraged customers and try to figure out what went wrong.
Neither the soothing nor the tracing is easy. Consider the case of theswitched shipping bill which sent black lace underwear to a church in LosAngeles and religious pamphlets to a private home in New York. Among otherhard-to-explain gaffes, Federal has lost a family heirloom wedding dress(prompting both the bride-to-be and her mother to call in, sobbing), mutilatedan X-ray needed for surgery on a baby and permanently misplaced irreplaceablechild photographs of a former Illinois senator. Recently some live lobstersdisappeared. On the morning of Jan. 6, 1981 Joe Novak of Cupertino, Calif.,opened two crates of live lobsters shipped the day before from New Bedford,Mass., and discovered 13 missing. Discounting an organized escape by thelobsters, Novak called Federal. In Memphis, tracers are investigating.
"The customers see our advertisement and they take it as its word,"complains Bill Daniels, manager of the complaint department which fieldsabout 1,000 complaints a day. "The advertisements can create the impressionin someone's mind that overnight delivery is absolutely, positively guaranteed.We are not guaranteeing delivery."
Federal actually guarantees only a "commitment," to deliver a "priorityone package" by noon of the day after a pick-up. If the company fails,it will refund the shipping charge. "I'd like to see them change the sloganto 'absolutely, positively overnight or your money back,"' says Daniels.
Over Salt Lake City at 6:51 Mountain time, with a pale orange sunriseout racing them to Seattle, the three pilots aboard Nicole are tired, red-eyedand jabbering to make time pass. Because of light air traffic, the planehas an arrow-straight flight route into Boeing field. The autopilot ison again. Copilot Grant, drinking coffee, his feet on the jet's controlpanel, listens off and on to Charlie Douglas' all night truckers show onradio station WWL in New Orleans ("Freightimer Fever" and "Ride That Rigto Glory"). The Portland run --1,684 nautical miles, six and a half hours,three landings -- is Federal's longest and most exhausting.
"It's boring, like driving on the interstate," says Powell, a laconicformer crop duster with a blond mustache and a penchant for telling stories.Federal pilots like to talk about the tricks they play on their jump seatpassengers. The 727 has two jumpseats, which are available to company employeeswho make reservations and don't mind staying up all night, sitting on miserablyuncomfortable perches and putting up with the conversation starved pilots.One trick with female jumpseat riders, according to Powell, involves epaulets,through which the pilots thread the belts of their shoulder harnesses,turn to their passengers and ask, "Hmmm, you don't have any epaulets? FAAregulations require that you use something to hold the shoulder harnesson." The pilots huddle together with concerned seriousness and then helpfullysuggest that the shoulder harness could be held down by bra straps. It'sfunny, the pilots say, in the middle of the night.
Along with nearly everyone who works for Federal Express, Powell andhis crew spend an inordinate amount of time talking about Fred Smith.Thecreator of the company, partly because of Federal's in-house televisionnetwork, has become an icon for his employees. Last October's "EmployeeFamily Briefing," a televised annual meeting combining the format of theJohnny Carson Show with the atmosphere of a faith healer's festival, presentedSmith as a sort of demigod of package delivery.
More than 5,000 employees in a Memphis convention center and thousandsof others in hotels across the country watched a multimedia salute to Smith.He appeared on a screen amid billowy clouds at sunrise striking dashingposes as inspirational music blared and Federal jets swooped by. When hefinally walked on stage in the flesh -- after being introduced as "ourchairman, our founder and our friend' -- he received a standing, cheeringovation.
They love Smith because he pays relatively high wages (higher than averagein Memphis), he thinks big (right now he's considering using dirigiblesfor package delivery to the West Coast and SST's for delivery to Europe)and his growing company hasn't had to lay off employees. Smith and hiscompany are fiercely antiunion, using high wages and morale boosting gimmickslike the televised family briefing to fight off organizing attempts bythe Teamsters Union.
Smith, the prematurely gray Wunderkind who invented the industry hiscompany dominates, says he's confident Federal will continue growing. Thecompany's last reported quarterly earnings showed revenues up 41 percentfor a similar period in 1979 and profits up 25 percent. Federal lays claimto about a third of the overnight package market. Emery Air Freight Corp.,Federal's major competitor, has about 19 percent; United Parcel Service,16 percent; Airborne Freight Corp., 8 percent; passenger airlines, 4 percent,and the rest (including the Postal Service's overnight delivery service)23 percent. Federal is the only major small package service that owns itsown fleet of jets an enormously expensive investment for an upstart company.The fleet of 55 jets is valued at more than $285 million. It also owns2,500 delivery vans.
"We are so much bigger than anybody else," Smith says. "It would takea corporate behemoth to muscle its way into our business."
Landing gear grind down out of Nicole at 8:31 Pacific Standard Timeas Powell and his crew prepare to land in Portland. It's an atypicallybright morning in the Northwest. The Columbia River shimmers below, strandsof fog curl in the wooded foot-hills of the Cascades and off to the rightstands snow streaked Mt. Hood. Rush hour traffic clogs the suburban freeways.An hour earlier, the fog in Seattle had dissipated at Boeing Field to permita routine delivery of 12,400 pounds of packages. Before landing in Seattle,Powell said, "Oh boy, I'm tired. This is hard." His copilot nearly noddedoff to sleep.
On the ground in Portland, the pilots take a taxi downtown to the PortlandHilton for sleep and a 36 hour layover. Nicole will be refueled, servicedand flown back to Memphis this afternoon by a crew that arrived two daysearlier.
The monkey from McLean did not die for naught. His kidneys, having traveled2,724 miles overnight, are delivered at 10:04 by van to the Oregon PublicHealth Lab.
