In previous Flashback Friday articles, various aspects of the history of trucking, railroads and shipping have been covered. Today’s article is an overview of the history of air cargo. FreightWaves has three experts covering air cargo/air freight on an ongoing basis – Jesse Cohen, Cathy Roberson and Scott Case. Look for their articles on FreightWaves.com.
Aviation begins, and air cargo follows soon thereafter
Orville and Wilbur Wright flew their airplane for the first time on December 17, 1903. Since then air travel has revolutionized the world in countless ways. When airplanes first took to the skies, the mere idea of an airplane (or aeroplanes as they were known then) was astounding. Man had wanted to fly for thousands of years, but now it was a reality. But only 115 years ago, the concept seemed unbelievable. Now, airplanes enable quick travel for millions daily around the globe; and millions of packages are shipped by air freight every day. In addition, advancements in aircraft led to the development of rockets and the beginnings of man’s exploration of space.
In the years following the Wright brothers flew at Kitty Hawk, North Carolina, aviation spread. Within a few years those promoting aviation were seeking practical uses for the airplane. At about the same time that commercial trucks were first being produced, those promoting aviation sought to carry freight by air.
The first practical demonstration of air freight took place on November 7, 1910. Piloting a Wright Model B aeroplane 65 miles from Dayton to Columbus, Ohio, Philip Parmelee delivered a package containing 200 pounds of silk for the grand opening of a retail store. This first shipment was no mere delivery either, it was also a race, pitting an airplane against an express train.
The flight was officially timed at 57 minutes, which was a world speed record at the time. More importantly, It was the first “cargo only” flight, scheduled specifically to transport goods from one point to another. It was also the first flight commissioned by a client, as well as the first example of multimodal air transport, since the silk was transported by automobile from the Columbus aerodrome to the store. The Columbus newspaper officially reported that the air shipment had beaten the railroad express service between the two cities.
It should be noted that although cargo was carried by air beginning in 1910, early aircraft were not powerful enough (or sturdy enough, or large enough) to carry much cargo. Air mail (consisting of mail and small packages) was the primary cargo carried during the earliest years of aviation.
Although the Wright brothers were the first to successfully demonstrate powered flight, men in other countries had attempted it before them, and interest in aviation was not confined to the United States.
Therefore, it should be noted that the world’s first official flight to carry “air mail” occurred on February 18, 1911, in the United Provinces of Agra and Oudh in British-ruled India. Sir Walter Windham organized an exhibition to showcase aviation. He received permission from the Postmaster General in India to operate an air mail service to increase publicity for the exhibition, as well as to raise money for charity.
The first air mail flight was flown by Henri Pequet. He flew 6,500 letters 8.1 miles from Allahabad to Naini (the nearest station on the Bombay-Calcutta rail line). He flew a Humber-Sommer biplane equipped with a 50 horsepower engine; the airplane completed the trip in 13 minutes.
The first scheduled air mail postal service was in the United Kingdom. Air mail was flown between the London suburb of Hendon and the Postmaster General’s office in Windsor, Berkshire, on September 9, 1911. This was also proposed by Sir Walter Windham, who based his recommendation on the successful experiment he had arranged earlier in India. The postal service was part of the celebration around the coronation of King George V. The air mail service only lasted about a month; a total of 35 bags of mail were transported on 16 flights.
Between the World Wars
Airplanes were used as a new machine of war during World War I. After the war, American pilots and other aviation enthusiasts sought to keep airplanes in the news and to make them commercially viable. They hoped to convince the U.S. military, as well as businesses, to help expand the nation’s nascent aircraft industry.
In 1919, American Railway Express sought to fly 1,100 pounds of freight from Washington, D.C. to Chicago. A converted World War I bomber was used for the flight; it was forced to land in Ohio because of a frozen radiator, but the company continued to experiment with airfreight.
Many airlines were started during the 1920s, and a number of those flew freight as the decade progressed. Just as is the case 100 years later, their cargo was often mechanical parts or merchandise that was needed quickly. Nonetheless, during most of the decade air cargo remained primarily a novelty.
But a number of entrepreneurs understood aircraft could move high-value/low-volume consignments faster than railroads, shipping companies and parcel delivery companies. In Europe, the first scheduled flight from London to Paris in 1919 carried only one passenger, but also transported leather for a shoe manufacturer and grouse for a restaurant. Prints of movies and newsreels were a frequent air cargo consignment and distributed across the European continent to cinemas and movie houses.
Records are spotty from the early years of U.S. air cargo service, but 45,859 pounds of freight were carried by American Railway Express in 1927. The company was an early entrant in air cargo and contracted with a number of small airlines to deliver freight (rather than have its own fleet). In March 1929, the company was renamed Railway Express Agency, or REA.
Another company, National Air Transport was founded on November 14, 1926 to carry parcels by air. Later, it was one of the companies that were combined to create United Airlines. National Air Transport delivered the first air cargo in the United States on September 1, 1927, between Dallas and New York.
Two years later, in 1929, the amount of freight carried by air had grown to over 257,000 pounds. By 1931, more than 1 million pounds of air cargo were shipped.
Auto pioneer Henry Ford also started an air freight service for his company. (In addition, Ford built the Ford Tri-Motor airplane, which still has admirers for its design although only 199 were built.) The Ford air subsidiary carried 1 million pounds of freight for the company when it was founded in 1925, and averaged more than 3 million pounds by the end of 1929. The U.S. Post Office also shipped mail and freight by air.
Another competitor of REA was General Air Express, which was founded in 1932. Because of competition and low rates, neither company generated significant profits in the early 1930s. The two companies merged and operated as one entity as of February 1935.
Despite the number of companies carrying air cargo, of all air traffic-related revenues at that time, air freight consisted just under four percent.
United Airlines began its air freight delivery service on December 23, 1940. A number of historians believe United’s all-cargo service was the first in U.S. airline history. United utilized Douglas DC-4 aircraft to deliver mail on a New York-Chicago-New York route. However, the service was suspended less than five months later.
Air freight (other than U.S. air mail) was a minor part of airline operations; the focus was on passenger service. However, the four largest airlines at the time (United Airlines, American Airlines, TWA and Eastern Airlines) created Air Cargo, Inc. on March 14, 1941 to deliver freight.
Air Cargo’s operations began in December 1941; it operated during most of World War II (its last flight was in November 1944). By war’s end, many of the airlines offering scheduled passenger service were starting their own air freight services.
In an earlier Flashback Friday article, the story of Malcolm McLean and his commercialization of shipping containers was profiled. It was noted that what spurred the post-war use of shipping containers was their use in World War II by the U.S. Armed Forces to move materiel from the U.S. to far-flung war zones.
Similarly, the aviation industry and the development of aircraft moved forward because of World War II. As the war progressed, both the Axis powers and the Allies built faster and more powerful airplanes. Essential to the war effort, aircraft delivered troops, supplies and bombs across the Pacific, African and European theaters of war.
To help win the war, aircraft technology grew exponentially in less than a decade. Engines were designed that were more powerful, which led to bigger aircraft that could fly longer distances. Multi-engine aircraft were built by the thousands, and the jet propulsion engine was developed for the German Luftwaffe. (Providentially, the development of the jet engine came late in the war and was not able to be fully utilized. German scientists also developed the first rocket engines, which were used in the dreaded V-1 and V-2 rocket bombs.)
All of the developments used for warfare were later used for commercial purposes, including by the air cargo industry.
Post-World War II
The International Air Traffic Association was founded in 1919, the year of the world’s first international scheduled air service. Its successor was founded even before World War II ended. The International Air Transport Association (IATA) was formed by 57 airlines at a conference held in Havana on April 19, 1945. It is still working on behalf of the industry today and it has 290 member airlines, primarily major carriers, representing 117 countries.
Using the technology developed during World War II and surplus aircraft from various air forces, the air freight industry grew in the post-war years. The commercial airlines moved into the sector aggressively. Moreover, dedicated all-freight airlines and companies were started.
Nonetheless, it was a major incident in post-war Europe that showcased the capabilities of using aircraft to move freight. The Berlin Airlift also fueled public interest in air cargo in a way nothing else had done.
Post-war German was jointly controlled by the U.S., the United Kingdom, France and the USSR. The nation had been divided into zones controlled by those four powers. The city of Berlin was also divided into similar sectors. However, Berlin was located in the zone controlled by the USSR, and land access to Berlin also was controlled by the USSR.
The Berlin Blockade (June 24, 1948 – May 12, 1949) was one of the first major international crises of the Cold War. The Soviet Union blocked the Allies’ railway, road and canal access to the sectors of Berlin under Western control. The Soviets offered to drop the blockade if the Allies withdrew the newly introduced Deutsche Mark from West Berlin.
An airlift was the only viable option to get increasingly urgent deliveries of food, coal and other supplies to West Berlin. The Allies organized the Berlin Airlift (June 26, 1948 – September 30, 1949) to carry the necessary supplies to West Berlin, which was a very difficult undertaking considering the size of the city’s population. Aircrews from the U.S. Air Force, the Royal Air Force, the French Air Force, the Royal Canadian Air Force, the Royal Australian Air Force, the Royal New Zealand Air Force and the South African Air Force flew over 200,000 supply missions in one year, providing up to 12,941 tons of necessities per day. Luckily, the Soviets did not disrupt the airlift, fearing this action might lead to open conflict.
By spring 1949, the airlift was clearly succeeding, and by April it was delivering more cargo than had previously been transported into the city by rail. On May 12, 1949, the USSR lifted the blockade of West Berlin, although the U.S., U.K. and France continued to supply the city by air because they were concerned that the Soviets would resume the blockade after disrupting the supply chain that had been created. The Berlin Blockade highlighted the competing ideological and economic visions for postwar Europe between the West and the Soviet Union.
The Berlin Airlift was a massive undertaking and a great humanitarian effort. The airlift lasted 330 days; a total of 2.26 million tons of cargo were airlifted to Berlin, an average of 6,800 tons a day. About 80 percent of the total was delivered by the United States and about 20 percent by the United Kingdom.
The airlift also put an international spotlight on the capabilities of air freight through the ongoing coverage it received in media around the world.
The rise of all-freight airlines
Despite the advances in aircraft and the strongest U.S. economy in decades, it was difficult for entrepreneurs to begin air freight companies because of opposition from the established passenger carriers (which had started their own cargo departments after the war).
Executives of the passenger airlines believed that all-freight airlines would destabilize the commercial aviation sector by offering lower rates and irregular services. The passenger-focused airlines were especially fearful of small all-cargo operations like Slick Airways, Flying Tiger, California Eastern and others.
During the late 1940s, these small air cargo carriers, the established airlines and the Civil Aeronautics Board (CAB), which was the federal government’s regulatory body at the time, sought to set rates and distribute contracts for air freight. The CAB gave permission to four all-freight airlines to operate in August 1949. The companies were Airnews, Flying Tiger Line, Slick Airways and U.S. Airlines.
Of the four, Airnews and U.S. Airlines operated for a relatively short time. Airnews declared bankruptcy in June 1951 after running heavy losses. U.S. Airlines operated a New York-Miami route due to U.S. Air Force contracts, but financial losses as well as a number of accidents in 1952 caused the airline to shut down.
Slick Airways was founded by Earl F. Slick in January 1946. By 1950 the company had become the country’s most successful air cargo airline. Although it grew, Slick Airways encountered numerous problems. The established passenger airlines fought back, introducing all-freight flights to compete with the all-cargo airlines. The passenger airlines had established facilities and routes; therefore their fixed costs to transport cargo were lower. By 1954, competition from the passenger airlines caused Slick Airways and Flying Tiger to seek a merger. But labor issues at both carriers caused the proposed merger to fail. Slick Airways continued to operate but found competition with the passenger airlines even more difficult. It temporarily shut down operations in February 1958, claiming that its problems were due primarily to lack of government support for all-freight airlines. Slick Airways resumed operations more than four years later (October 1962), but the CAB suspended the company’s activities in less than three years (August 1965). Slick Airways’ assets were acquired by a number of other freight carriers.
Flying Tiger Line was started on June 25, 1945, by Robert Prescott, who had flown C-46 “Flying Tigers” during World War II. It was the first U.S. scheduled air freight airline. By August 1945, Prescott and his pilots were flying freight across the United States. Unlike Slick Airways, Prescott served the military and civilian markets. While Flying Tiger also competed with the passenger airlines, it did better than Slick Airways in part because of its diversified customer base as well as favorable CAB judgments. (The agency was similar to the Interstate Commerce Commission at the time; it was very involved in what are now considered “free market” decisions.) By the early 1960s Flying Tiger Line was competing for cargo with the passenger airlines as well as new all-freight carriers. It was also a major military charter operator during the Cold War era, carrying cargo and personnel. In addition, it had contracts with railroads to deliver their freight door-to-door.
Overall, air freight was a very small portion of total air traffic (in both the U.S. and worldwide). The total global air cargo shipped in the mid-1950s was about 800,000 tons. At that time, the European economies (and lesser economies around the world) had recovered from the war. Defeated in war, Germany and Japan were beginning to reap through business and trade what they could not win with arms. The United States was enjoying an era of unrivaled economic dominance.
Despite the economic prosperity, most of the U.S. air freight companies were unable to survive the small profit margin and heavy losses they incurred because of intense competition. Flying Tigers remained an exception; by the middle of the 1960s the company was generating a profit of $20 million annually and was the dominant air freight airline in the United States. Flying Tiger was later purchased by Federal Express.
The major passenger airlines continued as the primary competitors to the all-cargo airlines. In March 1964, United Airlines became the first U.S. passenger airline to offer non-stop transcontinental all-cargo service. While carrying freight was (and still is) a secondary market for passenger airlines, several realized that carrying “belly cargo” could be very profitable. About 50 percent of all air cargo is carried in the cargo holds of scheduled passenger aircraft.
A major leap forward in aircraft design occurred in 1968. Boeing brought the four-engine 747 to market. It was the industry’s first wide-body aircraft. The Boeing 747 was the first airplane that was able to transport full pallets in its cargo hold, which revolutionized the air cargo industry.
The next revolutionary change occurred about five years later. It was the start of a business rather than the introduction of a new type of aircraft. Fred Smith founded Federal Express and the company began operations in April 1973. He convinced a number of investors that combining passenger service and freight service, which was the passenger airlines’ business model, was inefficient. It was inefficient because the route patterns for passengers and cargo were different, and that combining the two slowed the movement of freight.
A key sales point for Federal Express was Smith’s guarantee of next-day delivery. Within three years Federal Express was profitable. The Federal Express hub was built in Memphis, Tennessee, exclusively for Federal Express aircraft, which totaled 76 by 1982. In 1983, ten years after the company was founded, Federal Express had revenues of $1 billion.
Federal Express acquired Tiger International, Inc., the parent company of Flying Tiger Line, in 1989. The two companies merged in August 1989. Federal Express became the world’s largest full-service, all-cargo airline. The company officially changed the name of its operating division to FedEx in 1994.
United Postal Service (UPS), a major competitor of FedEx, also has a dominant role in both the air freight and airmail markets. UPS traces its history back to a bicycle-based delivery service that began in 1907. UPS started a short-lived air service in 1929, but did not have sustained air freight service (UPS Blue Label Air) until 1953. In the 1950s UPS diversified into package delivery for private and commercial clients. In 1988, UPS sought and received permission from the FAA (the successor agency to the Civil Aeronautics Board) to operate its own airline (instead of leasing aircraft) – UPS Airline. Also during the 1980s UPS began international routes for documents and small packages. By 2001, UPS Airline was the ninth-largest U.S. airline.
Express parcel delivery, the internet, global commerce and e-commerce
Because of the rise of FedEx, UPS and their competitors in express parcel delivery (DHL and TNT, for example), the amount of air freight grew during the 1990s (and since). A technological innovation also generated greater traffic. FedEx provided computer software to thousands of its customers in 1992, which gave the customers the ability to track their shipments via computer.
Thanks to the internet, the ability to have real-time flight data and track-and-trace have increased visibility within the air freight industry. However, what fueled the growth of air cargo and the increase in air freight service even more was the growth of global commerce. Moving goods from one country or continent to another became established business practice. The explosion of e-commerce in the past decade has made the movement of freight by air even more central to the global economy.
Donna Aldridge (“Air Freight Forwarding Specialist to West Africa”), wrote the following, which is a fitting end to this article. “In an era of globalization, air freight has become essential. While goods once took weeks, if not months, to travel across the world, these days air freight operators can deliver goods to the African bush, or from New York to Beijing, in just a matter of days.” (And since she wrote that in 2016, the timeline has been compressed even more.)
FreightWaves thanks the following sources for information and photographs used in this article – Century-of-flight.net, Wikipedia, Azee Shipping & Trading Co. and Donna Aldridge.