Fred Smith, FedEx’s billionaire founder and CEO, dies at 80

Fred Smith, FedEx’s billionaire founder and CEO, dies at 80

Frederick W. Smith, who revolutionized express delivery as the founder and longtime chief executive of FedEx, a company that became so ubiquitous its name gained currency as a verb, died June 21 in Memphis. He was 80.

Mr. Smith was a college student at Yale, studying economics and working as a private pilot on the side, when he wrote a term paper in 1965 outlining his idea for a shipping business that would bridge land and sky, using planes to ensure medicine, computer parts and other time-sensitive packages could be delivered door-to-door.

As he later told it when asked about the grade, his paper wasn’t especially well thought-out. “I guess I got my usual gentlemanly C,” he said. Yet while light on specifics, his paper offered a blueprint for FedEx, providing Mr. Smith with the beginnings of an idea that he refined after graduating college, joining the Marine Corps and serving two tours in Vietnam, where he became convinced that a more efficient distribution system was needed to get supplies from one place to another.

His solution was a hub-and-spoke model, in which a central location served as a clearinghouse for deliveries. That concept became an organizing principle for FedEx, originally named Federal Express, which Mr. Smith launched in Memphis in 1973, using a fleet of 14 Dassault Falcon cargo jets to deliver 186 packages to 25 U.S. cities on its first night of operations.

Today, FedEx employs more than 500,000 people around the world and moves more than 17 million shipments a day. Its packages include birthday gifts, business supplies and legal briefs, as well as lifesaving medical devices and pharmaceuticals.

In a single year during the covid-19 pandemic, the company shipped about 300 million coronavirus vaccines across the United States, about half the total vaccines distributed by the federal government to that point.

“You’re delivering the most important commerce in the history of the world,” Mr. Smith often said, instructing employees to look after each package. “You’re not delivering sand and gravel.” (That approach informed the 2000 movie “Cast Away,” in which he played himself in a cameo. The film starred Tom Hanks as a FedEx analyst who survives a plane crash, is marooned on a desert island and holds on to an unopened FedEx box, hoping to someday complete the delivery.)

Mr. Smith in 2018.

Mr. Smith seemed destined for a career in transportation. His paternal grandfather was a steamboat captain, and his father founded a regional bus line in Memphis.

Mr. Smith used some of his family inheritance to start FedEx, although he soon began to run out of money: Roger Frock, an early FedEx executive, wrote in 2006 that not long after the company began making its first deliveries, its bank accounts neared zero. Mr. Smith took the company’s last $5,000 to a blackjack table in Las Vegas, where he made $27,000 and used his winnings to help keep the business afloat.

In part, he said, the company’s struggles were the result of government regulation: FedEx wasn’t able to upgrade its fleet to a larger plane, the Boeing 727, until 1977, after years of lobbying Congress to deregulate the air cargo industry. By 1983, the company was reporting more than $1 billion in annual revenue and preparing to expand to Europe and Asia.

Among major corporations, FedEx had an unusual degree of stability at the top. Mr. Smith served as chief executive for more than 50 years before stepping away from daily operations in 2022, when he took the title of executive chairman. His company’s growth made him phenomenally wealthy — earlier this year, Forbes estimated his net worth to be $5.8 billion — and also influential.

One of his Yale fraternity brothers, President George W. Bush, said in a tribute that he “twice asked” Mr. Smith “to serve as Secretary of Defense, and he declined twice only because of his devotion to his family.” Another close friend, former secretary of state John F. Kerry, was a member with Mr. Smith of Skull and Bones, one of Yale’s exclusive secret societies.

Mr. Smith was a trustee at the Center for Strategic and International Studies, a Washington think tank, and a member of the Business Council, an invite-only association of CEOs. Working alongside Sen. Bob Dole, he co-chaired a fundraising campaign that raised more than $195 million for the national World War II Memorial, which opened in D.C. in 2004.

The previous year, Mr. Smith used some of his FedEx earnings to become a part-owner of Washington’s NFL team, now known as the Commanders. He and two other minority stakeholders sold their shares back to owner Daniel Snyder in 2021, after The Washington Post reported that the trio had become unhappy with Snyder amid a debate over the team’s name. FedEx was the first major corporate sponsor to call on the team to change its name. (One of Mr. Smith’s 10 children, Arthur Smith, is the offensive coordinator for the Pittsburgh Steelers.)

Mr. Smith in 2014.

Under Mr. Smith, FedEx became one of the first transportation companies to offer online package tracking. It later expanded its reach by acquiring companies including Caliber System, which pioneered the use of barcodes to track deliveries, and Kinko’s, the retail chain of office supply and printing stores.

Mr. Smith had less success with Zapmail, a short-lived electronic mail service he developed at FedEx at a time when fax machines were still a novel invention. By the time the venture was discontinued in 1986, it had cost the company more than $300 million.

“I’m not afraid to take a swing and miss,” he later told Fortune Small Business.

“We couldn’t just sit there,” he added. “Companies that don’t recognize that their business is going to be commoditized and don’t take some risks — some of which are going to work and some of which aren’t — are going to end up getting punched up by the marketplace.”

Mr. Smith, right, at the opening of FedEx's European sorting center in France in 1999.

Frederick Wallace Smith was born in Marks, Mississippi, on Aug. 11, 1944. He grew up in Memphis, 60 miles north, where his father started the Smith Motor Coach Co., later known as Dixie Greyhound Lines. His father drove the first bus himself, chaired the company’s board and used the proceeds from its sale to Greyhound to invest in Toddle House, a restaurant chain that expanded around the country.

Mr. Smith was 4 when his father died of a heart ailment. His mother later married a barnstorming pilot who helped launch FedEx’s flight operations and served in the Tennessee Air National Guard.

As a child, Mr. Smith walked with crutches while being treated for a hip disorder, Legg-Calvé-Perthes disease. By the time he was a teen, he was able to play football and was also taking flying lessons.

Mr. Smith graduated from Yale in 1966 and served four years in the Marine Corps, including aboard an OV-10 Bronco observation plane in Vietnam. While commanding a company of Marines outside Danang, he led a successful assault on a North Vietnamese battalion, at times rushing through the firefight to carry casualties from the battlefield. He was later awarded the Silver Star for valor.

As Mr. Smith told it, the Marine Corps served as an informal business school, introducing him not only to broader issues of logistics but to the fundamentals of leadership. After being honorably discharged with the rank of captain, he returned home and founded FedEx in 1971, basing the company out of Little Rock before starting delivery operations in Memphis, which had ample hangar space and offered a central location for U.S. deliveries.

The company’s early years coincided with a tumultuous period in Mr. Smith’s personal life, which journalist Vance Trimble later recounted in “Overnight Success,” a 1993 book about the company.

Mr. Smith was sued in 1974 by his two half-sisters, who alleged that he had been irresponsible in investing some of their inheritance — money from a family trust — in his fledgling business. Months later, in 1975, he was indicted by a federal grand jury, accused of forging loan documents on behalf of the trust.

That February, he was arrested in connection with a hit-and-run incident in Memphis that took the life of George Sturghill, a parking lot employee in his early 50s. The Memphis Commercial Appeal reported that Mr. Smith was charged with leaving the scene and driving with an expired license.

Those charges were later dropped, and Mr. Smith was acquitted in the forgery case. He reached an out-of-court settlement with his sisters in 1978.

His first marriage, to Linda Black Grisham, ended in divorce the previous year. According to FedEx, survivors include his wife, Diane Smith; nine children, Stacey Rokas, Laurie Hooper, Richard Smith, Kathleen Forbush, Molly Heussenstamm, Arthur Smith, Rachel O’Neal, Sam Atkinson and Cannon Smith; 31 grandchildren; and two great-grandchildren.

His daughter Windland Smith Rice, a nature photographer, died of a heart disorder in 2005, at age 35.

Mr. Smith in 2006.

Outside of FedEx, Mr. Smith was a board member of companies including Holiday Inn and General Mills. He also financed movies such as “Devotion” (2022), about the friendship between a Black and White naval aviator during the Korean War, and donated to the University of Memphis, the Memphis Zoo and other institutions in his adopted city. Rep. Steve Cohen, a Democrat whose district includes much of Memphis, called him the city’s “most important citizen.”

Looking back on the history of FedEx in a 1998 interview for the American Academy of Achievement, Mr. Smith attributed much of his success to “being in the right place at the right time.” He added that serving in Vietnam, where he had seen friends maimed or killed, also gave him a different perspective.

“I was willing to take a chance,” he said, “because losing wasn’t the worst thing in the world that could happen to you. I had seen that very clearly.”