Frederick W. Smith, who bet everything he had on a plan to revolutionize freight transport, courting disaster early on but ultimately winning vindication in the form of power in Washington, billions in personal wealth and changes in how people all over the world send and receive goods, died on Saturday. He was 80.
His death was announced by FedEx in a statement that did not provide further details.
FedEx was conceived in a paper that Mr. Smith wrote as a Yale University undergraduate in 1965. He argued that an increasingly automated economy would depend on fast and dependable door-to-door shipping of small packages containing computer parts. He got a C.
Today, FedEx employs more than half a million people and operates the world’s largest fleet of cargo aircraft. On an average day, the company ships more than 16 million packages in about 220 countries and territories.
Like Google, FedEx created a new service that came to be seen as so essential that the corporate name is now a widely recognizable verb.
Mr. Smith was celebrated as one of the great business minds and executives of his time.
He was well prepared for the industry he helped create. He flew planes as a teenager and then served two tours of duty in Vietnam as a Marine Corps pilot. His father, formerly chairman of the Dixie Greyhound Lines, was known as the Bus King of the South.
Aside from seeing the need for national overnight delivery, Mr. Smith’s greatest innovation was a hub-and-spoke system of routes. He based the sorting of packages in Memphis, where he found an unused airplane hangar. He flew his planes at night, when the skies were relatively empty.
A novelty at the time, the hub system has since been adopted throughout the airfreight industry.
Other milestones in Mr. Smith’s career included adopting bar codes on packaging from retail; outmaneuvering competitors like Emery Worldwide; and closing down an unsuccessful document delivery service, Zapmail, before it would have been swamped by email. He changed the corporate name from Federal Express to FedEx and embarked on ground shipping, which put FedEx in competition with itself but gave customers a more affordable option. As a result, FedEx gained insulation from the booms and busts of the broader economy.
The New York Times regularly ranked Mr. Smith as one of the highest-paid chief executives in the United States. At the time of his death, Forbes estimated that he was worth more than $5 billion.
Success translated into decades of influence in national politics. Mr. Smith got a personal meeting with President Bill Clinton in the Oval Office. He was a pallbearer at Senator John McCain’s funeral. In the mid-1990s, George J. Mitchell, the former Democratic leader of the Senate, and Howard H. Baker Jr., the former Republican leader of the Senate, both served on FedEx’s board.
All the planes helped. Mr. Smith provided a personal aircraft for a prisoner swap with Russia, and the shipping of swabs by the federal government during the early months of the Covid-19 pandemic. Corporate jets shuttled officeholders to political events around the country.
He was closest to President George W. Bush, who was a pledge of the DKE fraternity when Mr. Smith was its president. Mr. Bush later succeeded him in the role. Mr. Smith was widely reported to be in the running to serve as Mr. Bush’s secretary of defense before withdrawing from consideration.
After Mr. Smith’s death, Mr. Bush released a statement hailing Mr. Smith, “my Yale fraternity brother,” as “one of the finest Americans of our generation.”
Though Mr. Smith criticized President Donald Trump’s trade policy, the two found much else to agree on. The Times reported that, thanks to the corporate tax cuts Mr. Trump signed into law, which FedEx had lobbied for, the company’s tax bill plunged to zero, from $1.5 billion. Mr. Smith had said that businesses like FedEx would respond to the windfall with major new investments, yet FedEx reduced its capital expenditures and increased its spending on stock buybacks.
Frederick Wallace Smith was born on Aug. 11, 1944, in Marks, Miss. He grew up in Memphis. His father, James (who was also called Fred), ran a chain of restaurants called Toddle House, in addition to the bus line. His health declined after a heart attack, and he died when his son was 4 years old. The boy was raised by his mother, Sally (West) Smith, and her brothers. She later married Fred Hook, an air force officer.
Despite being born with a hip disorder that required him to walk with crutches, Fred Smith was on the basketball and football teams by high school. He had a passion for flying and crop-dusted as a hobby.
He earned a bachelor’s in economics from Yale in 1966. He was honorably discharged from the Marines in 1969.
Accounts of FedEx’s early years sometimes refer to the company’s struggle to find customers and pressure from investors. The story is retold that Mr. Smith got desperate enough that he traveled to Las Vegas on a whim. He supposedly cleared about $27,000 playing blackjack.
In a 1993 book, “Overnight Success: Federal Express and Frederick Smith, Its Renegade Creator,” the journalist Vance Trimble uncovered evidence that the early years were turbulent.
In November 1974, his half sisters, Fredette Eagle and Laura Ann Patterson, sued Mr. Smith for “illegal and irresponsible” investments from their father’s trust in Federal Express that were wiping out their inheritance. The next January, Mr. Smith informed his corporate board that he was being federally indicted.
The case revolved around the charge that he had used a fake business document with a signature he had forged to obtain a $2 million loan from a bank. Just days later, driving home from his office in a blue 1972 Ford, Mr. Smith ran over a handyman, George Sturghill, killing him, and sped away. He was swiftly arrested, charged with leaving the scene, and found to have an expired license.
Over the next few years, Mr. Smith’s fortunes changed. Federal Express began turning a profit. A jury found him not guilty of fraud. Charges in the hit-and-run case were dropped; relatives of Mr. Sturghill told Mr. Trimble they did not even know how he had died. By 1979, when Mr. Smith reached a settlement with his sisters, Federal Express’s annual revenue was almost $300 million.
He won many other fights. He consistently beat back efforts to unionize FedEx’s work force, and he stared down his pilots, who did unionize, when they threatened to strike. Yet he also spoke proudly about having a no-layoff policy, and when he cut pay during the 2008 financial crisis, he docked himself 20 percent of his salary.
In 2010, The Times reported that FedEx spent 1.5 percent of its pretax profits on charitable giving, compared with the 0.9 percent corporate average.
Mr. Smith’s other business activities included an up-and-down career funding movies, largely through a company called Alcon Entertainment, and part ownership of the Washington football team, whose change of name from the Redskins to the Commanders he was involved with.
Information about his survivors was not immediately available.
In 2022, he stepped down as FedEx’s chief executive.
“FedEx has changed the world by connecting people and possibilities for the last 50 years,” he said in a statement on the company’s website. “As we look toward what’s next, I have a great sense of satisfaction.”
Alex Traub is a reporter for The Times who writes obituaries.
The post Fred Smith, Billionaire Founder of FedEx, Is Dead at 80 appeared first on New York Times.
