WHAT’S a bloke to do when his fledgling freight-forwarding company is millions of dollars in debt, losing a further US$1m a month in 1973, and the only reason your air freighters are still flying is because your pilots are fuelling them on their credit cards as no financiers will loan you another cent?
In the case of Frederick (Fred) Smith, you get the company’s last $5000 cash, fly to Las Vegas, and hit the blackjack tables.
And turn that $5000 bucks into $27,000 – enough to have you rushing back to Memphis to keep your planes and trucks gassed-up, while you hammer home to financiers that your unique freight business is a true goer.
And in 15 years grow it to the world’s biggest overnight freight service.
It was FedEx Express that Fred Smith founded in 1971 with a US$4m family inheritance and $80m in loans and equities, and on its first day in business it flew 186 urgent packages overnight to 25 cities across America in eight small Falcon jet aircraft.
Until that night, urgent time-sensitive packages like medicines, computer parts and electronics were sent on space-available passenger planes, but Smith saw the potential for freight-only aircraft to move them more speedily in the dead of night when skies and airports were virtually empty.
His first two years were hard ones, and after he’d taken that last $5000 to the blackjack tables, a senior vice president demanded of him: “You took our last $5,000 – how could you do that?”
Smith’s response? “What difference does it make? Without funds for fuel, we couldn’t have flown anyway.”
Today FedEx Express owns over 680 aircraft and countless fleets of vans, trucks and semi-trailers world-wide, carries ten million packages a day between 220 countries and territories, and has a turnover of US$3billion a year.
And Fred Smith is still at the helm.