Fred Smith, the founder of FedEx, died on June 21 at age 80. The revolutionary businessman, who built one of America’s largest cargo and commerce networks, leaves behind a legacy of genius in turning bold ideas into reality.
1. Original thinking starts with you—trust your gut
Before FedEx was a global brand, it was a bold idea conceived in a college dorm room. While studying at Yale, Smith wrote a term paper proposing a new system for delivering urgent shipments—a vision that treated shipping as a strategic advantage rather than a logistical strain. Though his paper became known for receiving an unimpressive grade, the idea would go on to revolutionize American commerce.
Smith envisioned a system where shipments from across the country would all be funneled into a single central location each night. There, packages could be sorted quickly and efficiently, then loaded onto planes bound for regional airports for final delivery. This concept evolved into the familiar hub-and-spoke system now widely used in industries like aviation, logistics and telecommunications to provide point-to-point delivery.
This was a radical departure from traditional methods, where goods traveled on numerous direct routes, often inefficient and slow. At that time, most packages were transported alongside passengers on commercial planes or by truck. Smith’s idea promised to dramatically speed up delivery times by cutting out unnecessary stops and making overnight delivery across America possible for the first time.
Smith’s pioneering approach accelerated the evolution of U.S. logistics and essentially gave birth to the entire express shipping industry. Back in the 1970s, many skeptics questioned whether a centralized overnight air-delivery system could overcome the high expenses of air freight and the complexity of managing nationwide routes efficiently. Today, FedEx and its competitors, giants such as Amazon, UPS and DHL, all rely heavily on this fast-delivery concept, and most online consumers now expect package delivery within 24-48 hours of purchase.
Smith faced significant skepticism early on, but he didn’t let doubts hold him back. Instead, he trusted his instincts and pushed forward, proving that believing in your ideas—even when others don’t—is key to success. It’s fortunate he didn’t let initial criticism derail his vision.
2. Embracing risk is part of the game
Though FedEx is now a global logistics powerhouse valued at over $50 billion, its early years were fraught with challenges. In 1973, just two years after launching, FedEx was on the brink of bankruptcy due to high operating costs, limited customer adoption and intense competition in the shipping industry. The company was hemorrhaging cash, and investor confidence was waning. In a bold and desperate gamble, Smith risked the company’s last $5,000 in Las Vegas. His daring bet paid off, securing vital capital that enabled FedEx to persevere and learn from earlier mistakes.
With emergency funding secured, FedEx turned its attention to refining its innovative overnight delivery system and revisiting aspects of its strategy and operations that were eroding value and driving up costs. Smith understood that the revolutionary overnight delivery system he envisioned would only succeed if it was dependable and scalable.
By 1978, less than 10 years after its founding, FedEx was ready to go public. The initial public offering (IPO) raised much-needed capital, which Smith used to expand the fleet, improve infrastructure and invest in technology. This financial stability allowed FedEx to continue refining its service, grow its customer base and expand its geographical reach.
From that turning point onward, FedEx experienced steady growth as American commerce flourished throughout the 1980s and 1990s. The company expanded its operations, acquired key shipping routes and extended its reach internationally. This strong foundation positioned FedEx perfectly to capitalize on the explosive growth of the dot-com era and the rise of e-commerce.
3. Build strategies that thrive on change
Though FedEx faced early obstacles, it has consistently demonstrated strength in sticking to its mission and adapting to change. Commerce has shifted enormously since the 1970s, but FedEx’s expansive, adaptable vision has enabled continued success. Smith’s masterful strategy ensured that emerging trends like online shopping and digital trade only enhanced the robust system FedEx had been constructing for decades.
FedEx’s organizational model, supported by a transport network refined over many years, allowed it to effortlessly adapt to the surge in e-commerce. Delivery services lacking the infrastructure or technology to keep pace couldn’t compete with FedEx’s advantage when the dot-com boom transformed online delivery into the fastest and most efficient way to ship products. This e-commerce explosion also fueled increased demand for international trade, and with its well-established fleet and global network, FedEx became more a resource for the web than the other way around.
From the very beginning, Smith’s vision was to transform an outdated system into one driven by efficiency and innovation. Long before it became standard, he foresaw the tech revolution and positioned FedEx to lead with digital tracking and automation. At the heart of every advancement is taking calculated risks and anticipating what lies ahead—a fundamental principle in any good strategy.
Smith’s visionary leadership laid the foundation for FedEx, a company that today connects more than 99% of the world’s GDP across 220 countries and territories. His legacy lives on through a global network that continues to transform commerce and bring people and businesses closer together. Good ideas can transform the world.
Photo by Sundry Photography/Shutterstock
