The Evolution of Air Cargo

On November 10, 1910, seven years after the Wright brothers recorded the first flight, air was broken on the use of an aircraft to ship cargo.  Max Morehouse, founder and president of the Morehouse-Martens Company in Columbus, Ohio decided to commission the use of an aircraft to ship palates of silk from a wholesaler in Dayton to his department store in Columbus.  In order to make this novel and cutting edge idea a reality, Morehouse contacted the Wright brothers and executed a contract for the commercial use of an aircraft to ship goods domestically.  For $5,000, the Wright brothers furnished Morehouse with a Wright B Flyer and aviator Philip Orin Parmelee to complete the mission.  While the stunt was largely for publicity purposes (proving extraordinarily successful in that capacity) it also turned the ignition on what would become a global, multi-trillion-dollar industry that would revolutionize the transport of goods.

Today, in most countries distance is not an obstacle to obtaining or sending goods (domestic or international), and doing so quickly.  Want peonies for a December wedding? No problem.  Need a document to arrive in Philadelphia (go birds!) from San Francisco by 10 AM the next morning? Done.  One hundred and eight years after the advent of air cargo, we have the luxury of taking the industry’s availability and sophistication for granted.  However, the path to success for the air cargo industry was more of a protracted puddle-jumping marathon than a direct flight, as early companies struggled to achieve profitability and longevity in the space. 

According to Century of Flight, the reaction to Morehouse’s maiden cargo shipment was swift and steep as the demand for expedited cargo transport via aircraft amplified quickly.  The result was a dramatic increase to the annual weight load transported by air.  In 1927, total pounds shipped topped off at 45,859; but just four years later, the amount of cargo carried by aircraft exceeded one million pounds.  While the established passenger carriers fluctuated between operating autonomously and entering into joint ventures to maximize capacity and profitability throughout the early 1940’s, the smaller entrepreneurs in the space struggled to compete.  Ultimately, the majority of small carriers went out of business or were acquired by the big operators.  One of the few survivors of the air freight attrition was the Flying Tiger Line, Inc., pioneered by Robert Prescott.  Founded in June of 1945, through shrewd civilian/military market diversification and strategic cooperation agreements, Flying Tigers emerged as the industry leader generating over $20 million a year in profits by the mid 1960’s. 

Unfortunately, while Flying Tigers was soaring as a company, the industry as a whole had stalled.  In the face of high expectations, air cargo was only able to occupy a minuscule portion of overall air traffic.  This disappointing plateau in growth persisted until the 1980’s, when a new kid on the block named Federal Express ( est. 1971) led by Fred Smith indelibly changed the air cargo business model.  According to Century of Flight, “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 conducting 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.”  Thus, the leader of what would become a multi-trillion-dollar industry was born.  Within 12 years of inception, Federal Express became a billion-dollar company.  In 1989 Federal Express became the biggest exclusively-cargo air carrier in the world by merging with the number two industry leader, Flying Tigers by way of acquisition.  The company continued its expansion and re-branded to FedEx in 1994.  Today, according to their website, FedEx Express generates over $60 Billion a year, employs nearly 400,000 people and operates in 12 transport hubs around the globe.

In addition to providing a staggering enhancement to market availability, the success of the air cargo industry is critical to the health and well-being of the greater global economy.  While supplying the world with quick and easy access to material goods, it simultaneously enables globalization, allows businesses (big and small) to flourish, makes life saving vaccinations available to the masses, provides vital nutrient based food to needy consumers and acts as an essential means to completing humanitarian aid efforts. 

According to an IATA fact sheet, air cargo represents 35% of global trade by value ($6.2 trillion USD), but only 1% of global trade by volume (52 million metric tons).  This means that the majority of goods transported via air cargo are relatively small, high-dollar items.  Annually, the air cargo industry transports over $6 trillion (USD) worth of goods in total, including 62,500 tons of humanitarian aid and vaccinations that save over 2.5 million lives.

Much like the majority of consumers today, I am no stranger to online shopping, nor am I shy about exploring international markets to find exciting new products.  So, as the click-and-deliver shopping habits of the masses proliferate, we can feel good about supporting an industry that began as a publicity stunt and evolved into, among other things, a lifeline for some of the world’s most vulnerable communities.