Absolutely, Positively

Posted by George Hamlin
on Friday, April 17, 2020

FedEx; no mistaking the strong graphics on the sides of the trailers in Norfolk Southern’s intermodal train 211 (northern New Jersey to Atlanta) on Sunday, March 29, 2020, at Audley, Virginia, the north end of what was previously known as the Berryville siding on the NS H-line. The siding (which 211 is not taking) ends just south of Main Street in Berryville, the modest seat of Clarke County. 

A decade ago, you weren’t likely to have seen this company’s trailers on the railroad, either here, in the shadow of the Blue Ridge Mountains, or anywhere else, for that matter.  For that matter, wasn't FedEx basically an airline, or at least, didn’t they start as one?  And therein lies a tale.

Prior to the early 1970s, if you wanted to ship a small package, or even an envelope within the U.S. (or, effectively within any geographic region of the world), your basic alternative were the postal services of the world.  This typically involved not knowing how long the parcel/envelope would take to get to its destination. 

Even if you were willing to pay for some type of expedited service, about all that was available was “Special Delivery”, which was of some use on occasion, particularly if you needed delivery on a Sunday, which postal services typically provide.  At one point, the U.S. Post Office offered, for a modest premium, “Air Mail” service, which clearly was faster than mail sent by surface modes (including rail), at least if anything over a few hundred miles distance was involved.  However, over time this vanished as a separate product when virtually all long-distance mail in the U.S. was moved to air carriage (and FedEx is now the principal carrier for the air portion of the journey). 

In the early 1970s, Federal Express, based initially at Little Rock, Arkansas, before moving to Memphis, Tennessee, initiated the modern concept of an “integrated” small package/parcel/envelope carrier operating on an “expedited” basis.   “Integrated” meant that FedEx (which began as a nickname, and now has been adopted as the marketing/brand name for the service) took care of all aspects of getting the shipment from the customer to the recipient, both on the ground at both ends of the journey, and, for the line-haul using the combination of small jet aircraft (initially, converted business jets) and a “hub-and-spoke” operating system to get traffic to and from many locations, literally overnight (and was willing to provide a money-back guarantee that this would occur).

Not as well-known to the general public in that era, UPS, the United Parcel Service, had evolved an integrated system that relied principally on trucks and highways.  UPS also made use of use of the freighter aircraft that were operated by both the passenger airlines (including American Airlines, TWA and United), as well as the Flying Tiger Line, a U.S. all-cargo airline, for a product called “Blue Label” service, which featured “second-day” delivery for a reduced price versus “standard” airfreight.  And, of course, UPS moved into rail intermodal service, via TOFC (trailer on flat car) service, more popularly known as “Piggyback”, in a big way.

As the 1970s progressed, UPS took note of the FedEx (literal) “overnight success”, and by the early 1980s, began operating its own express air hub operation at Louisville, Kentucky.  Initially this involved contractors operating the aircraft (exclusively) for UPS; by the 1990s, it had established an air division, and moved the flying (at least of full-size jet aircraft) under its overall corporate umbrella.  Notwithstanding its very visible foray into the air express field, UPS’s ground business continued to be considerably larger from a traffic standpoint, however.

Returning the compliment in reverse, FedEx in more recent times has entered the ground-shipping business, both for small parcels and larger, heavier freight.  Growth has slowed in the express field (in the internet era, there is not as much need to move physical documents, for example), and thus, FedEx is looking to the surface business to supply traffic and revenue growth going forward.

And, as a result, rail intermodal has gotten a little more colorful, including the TOFC portion.  Furthermore, both UPS and FedEx have a new integrated competitor, for both surface and air, in the form of Amazon.  Last fall, that company announced that they will be obtaining intermodal services directly from railroads; will it be possible, if you’re lucky, to get a shot with all three competitors’ trailers in close proximity on a train rolling across the countryside in the not distant future?

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