100th Anniversary of Air Cargo

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November 2010 marks the 100th anniversary of the air cargo industry

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100th Anniversary of Air Cargo

  1. 2. HOW MANY PLANES DOES FEDEX HAVE ? <ul><li>Now </li></ul><ul><li>the </li></ul><ul><li>Grand Prize Question </li></ul><ul><li>For a </li></ul><ul><li>2010 Toyota </li></ul>
  2. 3. 661 aircraft, including: <ul><li>71 Airbus A300-600s </li></ul><ul><li>51 Airbus A310-200/300s </li></ul><ul><li>13 ATR 72s </li></ul><ul><li>26 ATR 42s </li></ul><ul><li>77 Boeing 727-200s </li></ul><ul><li>4 Boeing DC10-30s </li></ul><ul><li>58 Boeing MD10-10s </li></ul><ul><li>14 Boeing MD10-30s </li></ul><ul><li>59 Boeing MD11s </li></ul><ul><li>10 Cessna 208As </li></ul><ul><li>242 Cessna 208Bs </li></ul><ul><li>34 Boeing 757-200s </li></ul>
  3. 4. By comparison UPS 209 Aircraft
  4. 5. HOW MANY WANT TO TRY TO START A PARCEL COMPANY TO COMPETE WITH PURPLE OR BROWN <ul><li>By a show of hands </li></ul>OK GO……..
  5. 7. Jerry Hempstead
  6. 8. Kitty Hawk, NC (North Carolina), December 17, 1903. Orville Wright's famous first airplane flight.
  7. 9. 1910 First commercial airplane flight <ul><li>The first commercial </li></ul><ul><li>transport flight </li></ul><ul><li>with an airplane took place on November 7, 1910, when Phil O. Parmalee carried two bolts of silk </li></ul><ul><li>on his Wright Model B from Dayton to Columbus, Ohio. </li></ul><ul><li>The world’s first air-freight shipment was sponsored by the Morehouse-Martens Department Store as a publicity event. </li></ul>
  8. 10. The first “you freight is out for delivery message”
  9. 11. <ul><li>Reported in the local Columbus newspaper, the story noted that the shipment had beaten the railroad express between the two cities </li></ul><ul><li>Phil Parmelee posing after his historic first cargo flight on November 7, 1910. The 100# cargo of silk (valued at $800) is bundled next to him. </li></ul><ul><li>.He made the historic flight of 62 miles in 62 minutes from Dayton to Columbus, exceeding the expectations and as a result only about 1000 people saw him land. However, shortly thereafter the crowd grew to around 4000. </li></ul>By using a consultant this shipper could have received a 49% lower price UPS would have charged an extra handling fee of $50 for this packaging
  10. 12. Airmail <ul><li>With initial help from the U.S. Army, </li></ul><ul><li>the Post Office in 1918 </li></ul><ul><li>initiated an intercity airmail route. </li></ul><ul><li>The subsequent achievements </li></ul><ul><li>of the Air Mail Service included </li></ul><ul><li>the establishment of a transcontinental route and the development of airway lighting. </li></ul>
  11. 13. American Railway Express <ul><li>Operated the nation's largest ground and air express services. </li></ul><ul><li>It was founded by the U.S. government </li></ul><ul><li>as the </li></ul><ul><li>American Railway Express Co. </li></ul><ul><li>in 1918 , </li></ul><ul><li>when the nation's major express carriers — </li></ul><ul><ul><li>Adams & Co., </li></ul></ul><ul><ul><li>American Express Co., </li></ul></ul><ul><ul><li>Wells, Fargo & Co., </li></ul></ul><ul><ul><li>& Southern Express Co. </li></ul></ul><ul><li>were merged into a public corporation. </li></ul>
  12. 14. 1919 <ul><li>American Railway Express using a converted Handley-Page bomber attempted to fly 500 kilograms of freight from Washington, D.C., to Chicago. </li></ul><ul><li>Unfortunately, the plane was forced to land in Ohio, However this company often moved freight by air . </li></ul>
  13. 15. 1920’s American Railway Express <ul><li>During the 1920s, the volume of freight shipped by air grew significantly. </li></ul><ul><li>In 1927 , only 45,859 pounds were shipped. </li></ul>
  14. 16. American Railway Express <ul><li>By 1929 , the figure had grown to 257,443 pounds </li></ul><ul><li>By 1931 to more than 1 million pounds per year. </li></ul>
  15. 17. 1920’s <ul><li>Henry Ford's express company carried 1 million pounds of freight for the Ford Company when it started in 1925, and averaged more than 3 million pounds by the end of 1929. </li></ul><ul><li>The U.S. Post Office also shipped additional air freight. </li></ul>
  16. 18. Airmail Act of 1925 <ul><li>Authorized the Post Office to contract with private airlines to transport mail. </li></ul><ul><li>The Airmail Act created American commercial aviation and several of today's airlines were formed to carry airmail in the late 1920s </li></ul>
  17. 19. REA <ul><li>An association of railroads bought out American Railway Express in 1929 and began to operate it as the Railway Express Agency. </li></ul><ul><li>Its name was changed to REA Express in 1970. </li></ul><ul><li>Poor management, strikes, and competition led to heavy losses </li></ul>
  18. 20. 1920’s <ul><li>National Air Transport, one of the companies that originally made up United Airlines, delivered it’s first scheduled air cargo in the United States on September 1, 1927, between Dallas and New York. </li></ul>
  19. 21. Lindbergh's Transatlantic Flight: New York to Paris May 20-21, 1927
  20. 22. UPS <ul><li>Operated a short-lived air service beginning in 1929 . </li></ul>
  21. 23. 1930’s <ul><li>General Air Express formed in 1932 as a competitor to Railway Express Agency and due to aggressive competition between the two companies, </li></ul><ul><li>neither did well </li></ul><ul><li>until </li></ul><ul><li>they merged in 1935 . </li></ul>
  22. 24. 1930’s <ul><li>By the mid 30’s, air freight made up 4% of revenues from all air traffic. </li></ul>
  23. 25. 1930’s <ul><li>These amounts increased during the 30’s as air freight became a more widely publicized way of moving goods between cities. </li></ul>
  24. 26. Regulation <ul><li>In 1938, the Civil Aeronautics Act transferred the federal civil aviation responsibilities from the Commerce Department to a new independent agency, the Civil Aeronautics Authority. </li></ul><ul><li>The legislation also expanded the government's role by giving them the authority and the power to regulate airline fares & to determine the routes that air carriers would serve. </li></ul>
  25. 27. Regulation <ul><li>President Franklin Roosevelt split the authority into two agencies in 1940, the Civil Aeronautics Administration (CAA) and the Civil Aeronautics Boar d (CAB). </li></ul><ul><li>CAA was responsible for ATC, airman and aircraft certification, safety enforcement, and airway development. </li></ul>
  26. 28. Regulation <ul><li>CAB was entrusted with safety rulemaking, accident investigation, and economic regulation of the airlines . </li></ul><ul><li>Both organizations were part of the Department of Commerce. </li></ul><ul><li>Unlike CAA, however, the CAB functioned independently of the Secretary. </li></ul>
  27. 29. First Air Express Round-the-World Shipment <ul><li>In 1939 Kellogg's Corn Flakes sponsored the Howie Wing Radio Program. </li></ul><ul><li>Airlines had bridged both the Pacific and Atlantic Oceans and the public's interest in aviation was peeking. </li></ul><ul><li>To stimulate interest in the Howie Wing program, Kellogg's chose to sponsor the First Air Express Round-the-World shipment. </li></ul>
  28. 30. First Air Express Round-the-World Shipment <ul><li>They prepared two suitcases. One would be sent by air Round-the-World in an easterly direction and the other to the west. </li></ul><ul><li>It would be a race to see which suitcase would win its Round-the-World trip. </li></ul>
  29. 31. First Air Express Round-the-World Shipment <ul><li>The suitcases would travel on: </li></ul><ul><li>Eastern Airlines </li></ul><ul><li>American Airlines </li></ul><ul><li>Pan American Airways </li></ul><ul><li>Air France </li></ul><ul><li>KLM Airlines </li></ul><ul><li>Imperial Airways </li></ul><ul><li>United Airlines </li></ul><ul><li>Transcontinental & Western Airlines </li></ul><ul><li>Chicago & Southern Airlines </li></ul>
  30. 32. First Air Express Round-the-World Shipment <ul><li>Schedule: 02/22/39 Suitcases departed Battle Creek, MI 03/06/39 At 11:30 AM the suitcases crossed paths while on KLM planes flying between Calcutta and Allahabad, India. </li></ul><ul><li>03/18/39 West suitcase arrived back to Battle Creek, MI </li></ul><ul><li>03/22/39 East suitcase arrived back to Battle Creek, MI </li></ul>
  31. 33. Results <ul><li>Winner: West Suitcase went Round-the-World in 25 Days ! </li></ul><ul><li>Loser: East Suitcase went Round-the-World in 29 Days </li></ul><ul><li>Details: Each Suitcase made approximately 75 different stops while traveling 31,188 miles Round-the-World. </li></ul><ul><li>Customer Service claimed the eastbound bag had a bad address and refused the delay claim </li></ul>
  32. 34. 1940’s <ul><li>Some historians believe that when United Airlines began it’s own freight service in 1940, </li></ul><ul><li>that this was the first all-cargo service in U.S . airline history carrying mail between New York and Chicago. </li></ul>
  33. 35. 1940’s <ul><li>By 1941, the “Big Four” airlines— </li></ul><ul><ul><li>United, </li></ul></ul><ul><ul><li>American, </li></ul></ul><ul><ul><li>TWA, </li></ul></ul><ul><ul><li>& Eastern </li></ul></ul><ul><li>— formed Air Cargo, Inc. which carried air freight but in the end, many of the airlines involved started their own air freight businesses . </li></ul>
  34. 36. 1940’s <ul><li>During the 1940’s some of the other well known air freight carriers were </li></ul><ul><ul><li>Slick Airways, </li></ul></ul><ul><ul><li>Flying Tiger </li></ul></ul><ul><ul><li>& California Eastern. </li></ul></ul>
  35. 37. 1940’s <ul><li>There were many small air freight carriers and regional airlines were also carrying some freight. </li></ul><ul><li>In August 1949, the government's Civil Aeronautics Board (CAB) finally gave permission to four all-freight airlines to operate. </li></ul>
  36. 38. World War II Made Air Freight <ul><li>10,655 DC-3s were built at </li></ul><ul><ul><li>Santa Monica, California, </li></ul></ul><ul><ul><li>Long Beach, California, </li></ul></ul><ul><ul><li>& Oklahoma City </li></ul></ul><ul><li>in both civil DC-3 (607) </li></ul><ul><li>& military C-47 (10,048) versions. </li></ul>The Douglas Company produced more of this plane than any other aircraft that has ever been built and some are still operating
  37. 39. Flying Tiger Line <ul><li>Founded on June 25, 1945, by Robert Prescott, a C-46 “Flying Tigers” pilot during the war. </li></ul><ul><li>Prescott started with a fleet of 14 Budd RB-1 Conestoga aircraft, bizarre-looking wafer-thin stainless steel planes that did not have very good flying characteristics. </li></ul>
  38. 40. Flying Tiger Line <ul><li>Beginning in August 1945, Prescott's pilots were flying coast-to-coast carrying freight. </li></ul><ul><li>The company survived the competition with established passenger airlines partly because of its diversified customers and partly because of favorable CAB judgments. </li></ul>
  39. 41. 1949 All air cargo airlines <ul><li>These were </li></ul><ul><ul><li>Slick, </li></ul></ul><ul><ul><li>Flying Tiger, </li></ul></ul><ul><ul><li>U.S. Airlines, </li></ul></ul><ul><ul><li>& Airnews. </li></ul></ul>
  40. 42. Flying Tiger Line <ul><li>The airline signed cooperative agreements with rail companies to deliver its freight door-to-door. </li></ul><ul><li>By the mid-1960s, Flying Tigers was making an annual profit of $20 million and was the largest air cargo airline in the country. </li></ul><ul><li>Its only real competitor was Airlift International, Inc., a much smaller company that had inherited some of Slick's assets. </li></ul>
  41. 43. Emery <ul><li>Emery Worldwide </li></ul><ul><li>Emery started in 1946 and was the first freight forwarder to receive a carrier certificate from the United States Government. </li></ul><ul><li>For 40 years, Emery was the largest freight forwarder/integrated air carrier in the US. </li></ul>
  42. 44. <ul><li>1946: Airborne Flower Traffic Association of California begins shipping exotics from Hawaii. 1947: Pacific Air Freight is founded in Seattle. 1968: Airborne and Pacific merge. 1980: Airborne buys Midwest Air Charter and Clinton County (Ohio) Air Force Base. </li></ul>
  43. 45. The Berlin Blockade (24 June 1948 – 12 May 1949) <ul><li>Western Allies organized the Berlin Airlift to carry supplies to the people in West Berlin. </li></ul><ul><li>Over 4,000 tons per day required by Berlin during the airlift </li></ul><ul><li>The United States Air Force, Royal Air Force, and other Commonwealth nations flew over 200,000 flights providing 13,000 tons of food daily to Berlin in an operation lasting almost a year. </li></ul><ul><li>By the spring of 1949, the effort was clearly succeeding, and by April the airlift was delivering more cargo than had previously flowed into the city by rail. </li></ul>
  44. 46. UPS 1953 <ul><li>UPS begins a steady expansion of its common-carrier parcel business, through which it picks up parcels from anyone and takes them to anyone else. </li></ul><ul><li>UPS Air is launched as a two-day air express service connecting major cities on the East and West Coasts. </li></ul>
  45. 47. <ul><li>Standing for D alsey, H illblom and L ynn </li></ul><ul><li>Today a division of Deutsche Post DHL providing international delivery services. </li></ul><ul><li>Founded in 1969 to deliver documents between San Francisco and Honolulu </li></ul><ul><li>Used on board courier and counter to counter </li></ul>
  46. 48. Airline Deregulation Act of 1978 <ul><li>The government phased out CAB's economic regulation of the airlines </li></ul><ul><li>At this time there were 354 air freight forwarding companies with CAB operating certificates </li></ul><ul><li>Emery, Airborne, Schulman, Jet, Novo, AEI, WTC, Bor Air, Amerford, Profit by Air, Surf Air, Right-O-Way </li></ul><ul><li>The CAB ceased to exist at the end of 1984. </li></ul>
  47. 49. FedEx <ul><li>began operations in April 1973 </li></ul>
  48. 50. REA <ul><li>An association of railroads bought out American Railway Express in 1929 and began to operate it as the Railway Express Agency. Its name was changed to REA Express in 1970. </li></ul><ul><li>Poor management, strikes, and competition led to heavy losses </li></ul><ul><li>REA filed for bankruptcy in 1975. </li></ul><ul><li>FedEx was broke but the only carrier advertising </li></ul>
  49. 51. FedEx <ul><li>1976, Federal Express was showing a profit. </li></ul><ul><li>By 1982, the company had as many as 76 aircraft , including 39 Boeing 727s and four Douglas DC-10s. </li></ul><ul><li>In 1983, the company reported revenues of $1 billion, </li></ul>
  50. 52. Automation <ul><li>Customer premise automation devices introduced in 1982 </li></ul><ul><li>EDI billing introduced in 1882 </li></ul><ul><li>In 1986, the FedEx introduced the “SuperTracker”, a hand-held bar code scanner which brought parcel tracking to the shipping industry for the first time. </li></ul>
  51. 53. FedEx <ul><li>In 1989, Federal Express acquired Tiger International, Inc., the owners of Flying Tigers. </li></ul><ul><li>The two airlines merged in August 1989. </li></ul><ul><li>Federal Express became the world's largest full-service all-cargo airline. </li></ul><ul><li>In 1994, the company officially changed the name of its operating division to FedEx. </li></ul><ul><li>1997 buys RPS </li></ul>
  52. 54. <ul><li>In 1988, UPS received permission from the FAA to operate its own airline (as opposed to leasing), known as UPS Airline. </li></ul><ul><li>By 2001, was the ninth largest airline in the United States. </li></ul><ul><li>On average, UPS delivers 2 million air express packages and documents per day. </li></ul><ul><li>In the 1980s, UPS also expanded into international routes for documents and small packages. </li></ul>
  53. 56. WHO IS THE LARGEST TRANSPORTATION AND LOGISTICS COMPANY ? <ul><li>Test Question </li></ul>
  54. 57. The U.S. Duopoly <ul><li>UPS </li></ul><ul><li>Revenues $51.5 Billion </li></ul><ul><li>Earnings $3 Billion </li></ul><ul><li>FedEx </li></ul><ul><li>Revenues $35.5 Billion </li></ul><ul><li>Earnings $98 Million </li></ul>
  55. 58. <ul><li>UPS </li></ul><ul><li>Revenues $51.5 Billion </li></ul><ul><li>Earnings $3 Billion </li></ul><ul><li>FedEx </li></ul><ul><li>Revenues $35.5 Billion </li></ul><ul><li>Earnings $98 Million </li></ul><ul><li>Revenues $76 Billion </li></ul><ul><li>Earnings $ -2.3 Billion </li></ul>Deutsche Post
  56. 59. The Antonov AN-225 is the world's largest cargo plane.
  57. 60. The Airbus A300-600ST Super Transporter (otherwise known as the Beluga)
  58. 61. Smallest recorded shipment highest price per kilo Useless fact
  59. 62. Perhaps the biggest air cargo payload 230,000 pounds Takes 65,000 of space cargo up Useless fact
  60. 63. Outstanding Books to read on the topic
  61. 64. If you liked what you heard <ul><li>My name is Jerry Hempstead </li></ul><ul><li>If you did not like what you heard </li></ul><ul><li>My name is Fred Smith </li></ul>
  62. 65. Thank you for having me it was nice being had <ul><li>Jerry Hempstead </li></ul><ul><li>1724 Buckhorn Pl </li></ul><ul><li>Orlando Fl 32825 </li></ul><ul><li>407-342-3825 </li></ul><ul><li>[email_address] </li></ul><ul><li>www.hempsteadconsulting.com </li></ul>

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