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air freight

Early aviation promoters were always looking for practical uses for the airplane. One idea was to use them as carriers of freight. The first practical demonstration of air freight occurred in November 1910 when a department store shipped a bolt of silk by air from Dayton to Columbus, Ohio. Reported in the local Columbus newspaper, the story noted that the shipment had beaten the railroad express between the two cities. In 1919, American Railway Express used a converted Handley-Page bomber in an attempt to fly 1,100 pounds (500 kilograms) of freight from Washington, D.C., to Chicago. A frozen radiator forced the plane to land in Ohio but the company continued its efforts to move freight by air. Airlines across the country flew freight in the late 1920s, benefiting American businesses when they needed parts or merchandise as quickly as possible. The advent of air freight also allowed businesses to keep less inventory on hand.

During the 1920s, the volume of freight shipped by air grew significantly. In 1927, only 45,859 pounds (20,801 kilograms) were shipped. By 1929, the figure had grown to 257,443 pounds (116,774 kilograms), and by 1931 to more than 1 million pounds (453,592 kilograms) per year. In addition to the air freight flown by American Railway Express, 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 (1.36 million kilograms) by the end of 1929. The U.S. Post Office also shipped additional air freight.

Although there were a few attempts to organize air freight airlines from the 1920s on, the first commercial airlines that were all-cargo did not emerge until after World War II.

National Air Transport, one of the companies that originally made up United Airlines, was founded on November 14, 1926, for the purpose of carrying parcels. This airline delivered the first air cargo in the United States on September 1, 1927, between Dallas and New York. Another company that was an early promoter of air cargo was American Railway Express (renamed Railway Express Agency or REA in March 1929), a firm that managed to get a group of small airlines to contract to deliver freight. A competitor to REA was General Air Express, founded in 1932. Because of low rates, neither company made much money in the early 1930s. Air freight at the time contributed just under four percent of all air traffic revenues. Eventually, the two companies, REA and General Air Express, found it useful to combine their operations. Beginning in February 1935, they operated as one.

United Airlines began its own air freight delivery service just before the beginning of World War II. On December 23, 1940, the airline inaugurated what some historians believe was the first all-cargo service in U.S. airline history. The airline used Douglas DC-4 aircraft to deliver mail from New York to Chicago and back. The route was short-lived and ended within five months. Air freight remained a sideline operation to mail and passenger traffic until March 14, 1941 when the “Big Four” airlines—United, American, TWA, and Eastern—formed Air Cargo, Inc., to deliver freight. Air Cargo began operations in December 1941 and operated through most of the war. Its last regular flight was in November 1944. By the end of the war, many of the airlines, including United and TWA, began their own independent air freight services.

In general, entrepreneurs found it difficult to enter the air freight market because of resistance from the established passenger carriers. The passenger airlines believed that new air freight airlines that offered low rates and irregular services would destabilize the whole commercial aviation sector. The established air carriers, who had formed Air Cargo, Inc., were especially afraid of small-time operators such as Slick Airways, Flying Tiger, California Eastern, and others. Through the late 1940s, these small airlines, the established giants, and the government's Civil Aeronautics Board (CAB) wrangled over how to hand out contracts and set the proper rates for freight transport. In August 1949, the CAB finally gave permission to four all-freight airlines to operate. These were Slick, Flying Tiger, U.S. Airlines, and Airnews.

Neither U.S. Airlines nor Airnews survived long. U.S. Airlines operated for a while on the New York-Miami route on Air Force contracts but a series of accidents in 1952 as well as the threat of bankruptcy folded the airline. Airnews met a similar fate in June 1951 after incurring heavy losses.

The two that did survive were Slick Airways, which was founded by Earl F. Slick in January 1946, and Flying Tiger. When it began service, Slick operated a fleet of 10 Curtiss C-46E aircraft. By the end of the 1940s, the company had become the country's most successful all air freight operator. Although Slick enjoyed moderate growth, it also faced problems. Established passenger carriers such as American Airlines had introduced all-freight flights that offered stiff competition. Since the passenger airlines could rely on established facilities and routes, their fixed costs for transporting cargo were lower. Under threat from the passenger airlines, Slick and Flying Tiger decided to merge into one airline in 1954. Unfortunately, labour problems at both airlines prompted them to abandon this idea. The failure to merge was a big blow to both airlines. Slick continued operations for a while but temporarily closed down in February 1958, unable to compete with the big passenger airlines. The company claimed that lack of government support for all-freight airlines had been the major cause of their downfall. Although Slick resumed operations in October 1962, the CAB eventually suspended Slick's activities in August 1965. The company's operations were acquired by other smaller freight carriers.

Flying Tiger Line fared much better. The airline had been founded on June 25, 1945, by Robert Prescott, a C-46 “Flying Tigers” pilot during the war. 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. Beginning in August 1945, Prescott's pilots were flying coast-to-coast carrying freight. Unlike Slick, Prescott made sure to diversify into both military and civilian markets. The company survived the competition with established passenger airlines partly because of its diversified customers and partly because of favourable CAB judgments. Although Flying Tigers faced stiff competition in the early 1960s from new small-time cargo carriers, it did well. The airline also signed cooperative agreements with rail companies to deliver its freight door-to-door. By the mid-1960s, Flying Tigers was making an annual profit of $20 million and was the largest air cargo airline in the country. Its only real competitor was Airlift International, Inc., a much smaller company that had inherited some of Slick's assets.

Despite widespread hopes for a vibrant industry, the air freight industry did not grow as expected. Air freight, in fact, remained a very small part of total air traffic. Many who tried to break into the air freight business did not survive their heavy losses. Flying Tigers remained an exception; most of the big-time operators such as Slick and Airlift faded from the scene. Major passenger airlines such as United Airlines continued to play a large role in the freight industry. In March 1964, United became the first airline in the country to offer non-stop transcontinental all-cargo service.

It was only in the 1980s that a new airline changed the face of the air freight business. A young entrepreneur named Fred Smith believed that combining passenger air traffic with freight air traffic, as the established airlines were doing, was not the most efficient way of doing business. He believed that the route patterns for the two were totally different. He also argued that combining freight with passenger traffic slowed down cargo delivery. Smith, with a lot of financial support, built a hub in Memphis, Tennessee, for his exclusive freight air delivery service, which he called Federal Express. One of the most important selling points was his idea of next-day delivery, a service that he guaranteed. The company began operations in April 1973 and while the initial years were financially difficult, by 1976, Federal Express was showing a profit. By 1982, the company had as many as 76 aircraft, including 39 Boeing 727s and four Douglas DC-10s. In 1983, the company reported revenues of $1 billion, an unheard of amount for a company that had existed for only ten years.

Flying Tiger flew Boeing 747s in the 1980s

In 1989, Federal Express acquired Tiger International, Inc., the owners of Flying Tigers. The two airlines merged in August 1989. As a result, Federal Express became the world's largest full-service all-cargo airline. In 1994, the company officially changed the name of its operating division to FedEx.

United Postal Service (UPS), one of FedEx's main competitors, also maintains a large presence in both the air freight and airmail markets. The origins of UPS go back as early as 1907 to a bicycle-based delivery service. In its early years of operation, UPS primarily focused on contract service to retail stores. It was only in the 1950s that the company diversified into package delivery for a wide range of customers including private and commercial clients. UPS operated a short-lived air service beginning in 1929, but the company began sustained air service via its UPS Blue Label Air much later—in 1953. In 1988, UPS received permission from the FAA to operate its own airline (as opposed to leasing), known as UPS Airline. Since then, UPS Airline has grown dramatically, and by 2001, was the ninth largest airline in the United States. On average, UPS delivers 2 million air express packages and documents per day. In the 1980s, UPS also expanded into international routes for documents and small packages.

The Fed Ex cargo airline used Boeing 727 aircraft for both U.S. and European service

At the turn of the century, the air freight industry remains a mix of dedicated large companies (such as FedEx), small-time operators (such as OCS Air Freight), and passenger airlines (such as United Airlines) that operate cargo divisions.