Evolution of Success: Railway Express and Flying FedEx Tigers Amazon.com

Clients Drive Change. Are You Listening?

Recently a friend shared with me some perspective he gained from 33 years working for Western Airlines and then Delta Airlines. Eight to 10 years of his career was spent in air cargo where he witnessed one of the big consumer driven industry changes that often go unnoticed if we aren’t directly participating in the changes over time. I think it’s a great example of how clients and consumers drive change in business which brings up one of the major questions I address with my coaching clients – Are you listening to your customers?

Listening to our clients and customers not only helps us to improve our customer service and product, but may lead us to launch the next multi-billion dollar business if we spot a major shift or need in consumer demand or the market place. Take the example of cargo or more simply – the delivery of packages to customers in an ever-increasing timely fashion. The consumer’s need for faster and more convenient delivery resulted in two of the most recognized brands in the world – FedEx & Amazon.

flying-tigers-amazon-fed-ex-success

In 1974 my friend worked his first stint in Western Airlines Air Cargo at Stapleton International Airport in Denver, Colorado. He was surprised to find a Railway Express office in the cargo complex. In 6 months it would be gone – as express package service evolved beyond the capability of the railroads.

railway expressThe Railway Express Agency (REA) was a national monopoly set up by the United States federal government in 1917. Rail express services provided small package and parcel transportation using the extant railroad infrastructure much as UPS functions today using the road system. The United States government was concerned about the rapid, safe movement of parcels, money, and goods during World War I and REA was its solution to this problem. REA ceased operations in 1975, when its business model ceased to be viable.

At the end of WWII a group of pilots formed what was to become the largest air cargo carrier in the world – Flying Tigers.

FlyingTigers CargoFlying Tiger Line, also known as Flying Tigers, was the first scheduled cargo airline in the United States and a major military charter operator during the Cold War era for both cargo and personnel (the latter with leased aircraft). The airline was bought by Federal Express in 1988. The airline was named after the Flying Tigers fighter unit of World War II, officially the 1st American Volunteer Group. Ten former AVG pilots formed the Flying Tiger Line after returning to the United States in 1945

Major airlines, air cargo carriers and the U. S. Post Office were able to meet consumer demand for package delivery up until consumer demand for more convenience and faster delivery created an opportunity.

The concept for what became Federal Express came to Fred Smith while he was studying at Yale University. For a class there, he submitted a paper which argued that in modern technological society time meant money more than ever before and with the advent of miniaturized electronic circuitry, very small components had become extremely valuable. He argued that the consumer society was becoming increasingly hungry for mass-produced electronic items, but the decentralizing effect induced by these very devices gave manufacturers tremendous logistic problems in delivering the items. Smith felt that the necessary delivery speed could only be achieved by using air transport. But he believed that the U.S. air cargo system was so inflexible and bound by regulations at that time that it was completely incapable of making sufficiently fast deliveries.

fedex federal expressIn his paper, Smith proposed a new concept—have one carrier be responsible for a piece of cargo from local pick-up right through to ultimate delivery, operating its own aircraft, depots, posting stations and delivery vans. Smith founded the Federal Express Corporation in 1971.

When the Internet and eCommerce exploded on the scene the volume of small package deliveries skyrocketed.

amazon-drones deliveryAmazon.com was founded in 1994, spurred by what Jeff Bezos called his “regret minimization framework”, which described his efforts to fend off any regrets for not participating sooner in the Internet business boom during that time. After reading a report about the future of the Internet which projected annual Web commerce growth at 2,300%, Bezos created a list of 20 products which could be marketed online.

UPS, FedEx and the USPS are competing for more of the Amazon package pie – even as Amazon experiments with delivering small packages directly to consumers’ door steps with small drones.

Listening to client demands and staying abreast of industry trends are two critical components of effective leadership. Everyone doesn’t need to launch the next multi-billion dollar business, but keeping our eyes open and our ear to the ground may help our business to keep from fading into the past like Railway Express.