Three of us were fortunate to study at Northwood University under iconic professors, including Dr. V. Orval Watts, Dr. David E. Fry, Mr. Jeffrey Bennett, and Dr. Dale M. Haywood. It was in Haywood’s business strategy class that we were introduced to one of America’s great entrepreneurs and visionaries: Frederick Wallace Smith.
Fred Smith, founder of FedEx, was born on August 11, 1944, in Marks, Mississippi. He passed away on June 21, 2025, in Memphis, Tennessee, at the age of 80. His father, James Frederick Smith, founded the Toddle House restaurant chain and the Smith Motor Coach Company, which was later renamed Dixie Greyhound Lines after its acquisition by Greyhound in 1931. Fred’s father died when he was four, and his mother and uncles raised him.
A childhood bone disease left him debilitated for several years, but he recovered fully by age ten. He attended Memphis University School and became an amateur airplane pilot while still a teenager. In 1962, he entered Yale University, graduating in 1966 with a degree in economics. At Yale, he served as president of the Delta Kappa Epsilon fraternity and was a member of Skull and Bones. His classmates included future President George W. Bush and Senator John Kerry. Smith and Kerry, both aviation enthusiasts, often flew together.
Following graduation, Smith served as a captain in the U.S. Marine Corps from 1966 to 1969. He completed two tours in Vietnam, flying in the back seat of the OV-10 Bronco as a forward air controller. He earned the Silver Star, Bronze Star, and two Purple Hearts for his service.
A Vision Born at Yale
In 1971, Fred Smith founded Federal Express (now FedEx) in Little Rock, Arkansas, investing $4 million of his inheritance (roughly $32 million today) and raising an additional $91 million in venture capital. He based the company on a concept he outlined in a 1965 Yale term paper, where he proposed a centralized, time-sensitive delivery service that would function like the Federal Reserve’s check-clearing system.
Smith believed society’s growing reliance on automation and technology would create a need for rapid, reliable shipment of items such as computer parts and documents. His idea was simple yet revolutionary: centralize shipping operations and utilize an air-ground network to ensure overnight delivery.
In 1973, FedEx launched operations in Memphis, Tennessee, which became a central hub for the initial 25 cities it served. Smith’s now-famous strategy was encapsulated in a bold slogan: “Everything moves through Memphis.” Even packages traveling short distances, such as those from Detroit to nearby Livonia, were routed through Memphis to maximize efficiency, reduce costs, and ensure accuracy.
Early Challenges and Triumphs
Fred Smith’s road to success was not without its obstacles:
1. Unimpressed professors (and investors):
Smith famously received a “C” on the paper that would later form the foundation of FedEx. His professor thought the idea impractical and the writing mediocre. Investors were initially skeptical, but Smith remained undeterred.
2. Regulatory Barriers:
Navigating regulations from the Civil Aeronautics Board proved difficult. Smith successfully challenged burdensome air taxi weight restrictions, enabling FedEx to grow.
3. A Bet in Vegas:
In a now-legendary story, after a crucial loan was denied, Smith took the company’s last $5,000 to Las Vegas and won $27,000 playing blackjack. The winnings covered a $24,000 fuel bill, buying FedEx one more week to survive.
4. High Start-Up Costs:
Building a national delivery network from the ground up required massive upfront investment. Each state had its own rules, complicating expansion.
Despite these hurdles, FedEx became profitable in 1976, posting $3.6 million in earnings after three years of losses. From there, the company took off. In fiscal 2024, FedEx had $87.7 billion in revenue, $5.56 billion in operating income, and $4.3 billion in net income.
At the time of his passing, Smith’s net worth was estimated at $5 billion, according to The New York Times.
A Patriot and a Philanthropist
Smith’s impact extended far beyond the boardroom. A decorated Marine, he served his country with valor and remained a tireless advocate for veterans throughout his life. He generously supported causes that promote education, veterans’ services, and environmental sustainability.
Smith believed fiercely in the free enterprise system. He championed free trade, global competition, and market-driven innovation as engines of prosperity. He argued that while some regulation is necessary, excessive government interference stifles entrepreneurship and slows economic progress.
He understood that healthy competition drives lower prices, better service, and technological advancement. Smith was also a founding supporter of the Competitive Enterprise Institute (CEI), a Washington, D.C., think tank promoting limited government and individual liberty.
A Lasting Legacy
Fred Smith not only revolutionized global logistics; he also inspired generations of business leaders. Through his philanthropy and business acumen, Smith’s unwavering belief in the power of free markets, personal responsibility, and calculated risk-taking serves as a blueprint for entrepreneurs and executives today.
His story reminds us that vision and patriotism still matter. Smith didn’t wait for the government to solve problems; he created solutions. He transformed an entire industry, helping to make the American economy more efficient and competitive in the process.
In a time when entrepreneurship can seem undervalued and free enterprise underappreciated, Smith’s life is a powerful counterexample. His commitment to country, business excellence, and personal discipline is a model worth celebrating and emulating.
Conclusion
As we celebrate the 4th of July, we must remember that Fred Smith was more than a brilliant entrepreneur. He was a patriot, philanthropist, and relentless advocate for American invention and innovation. He built one of the most impactful companies of the 20th century from a college term paper and a vision most others couldn’t see. He served his country on the battlefield and in the boardroom. And he never stopped believing in the promise of American enterprise.
In a divided world, Smith’s life is a unifying reminder of what’s possible when character, courage, and capitalism come together. America and the world could use more Fred Smiths.
About the Authors
Dr. Timothy G. Nash is director of the Northwood University Center for the Advancement of Free Enterprise and Entrepreneurship. Mr. Bob Thomas is the Chief Operating Officer for the Michigan Chamber of Commerce. Dr. Daniel G. DeVos is president and CEO of DP Fox Ventures and Chairman of the Board of the NBA’s Orlando Magic. Dr. Ed McBrien is CEO of Manhattan Beer Distributors.