Yesterday’s FreightWaves article was FreightWaves Classics: Aviation begins; air cargo follows quickly (Part 1). In Part 2, the article continues with the post-World War II era.
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 significantly in the post-war years. The commercial airlines moved into the sector aggressively. Moreover, numerous 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.
The Berlin Airlift
Post-war Germany had been divided into zones jointly controlled by the U.S., the United Kingdom, France and the USSR. 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 (currency) 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 the 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 per day. About 80% of the total was delivered by the United States and about 20% 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.
(Photo: Kansas City, Missouri Public Library)
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.
A Flying Tiger Line cargo plane on the runway in a tropical or semi-tropical location. (Photo: John Harris/abpic.co.uk)
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 for aircraft 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 and Flying Tiger Line
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 staff celebrating the company’s start of scheduled services/routes. (Photo: FlyingTigerClub.org)
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 generally 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.
This was a United Airlines DC-4, used for all-cargo flights. (Photo: United Airlines)
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% of all air cargo is carried in the cargo holds of scheduled passenger aircraft.
(Image: The Simmonds Collection)
The 1960s-1980s – and the rise of FedEx
A major leap forward in aircraft design occurred in 1968 when 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. Federal Express’ primary hub was built in Memphis, Tennessee, exclusively for Federal Express aircraft, which totaled 76 by 1982. In 1983, 10 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 Parcel 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.
A UPS airplane at one of its airport cargo facilities. (Photo: Jim Allen/FreightWaves)
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 for example), the amount of air freight grew during the 1990s (and ever 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 an 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.)
Today. air cargo (generally) moves quickly and seamlessly in most parts of the world. Trucking companies that move significant amounts of air cargo packages (either to send them on their way or to pick them up) integrate their schedules with the air cargo companies. Systems are in place that were unheard of even 50 years ago. And there is little doubt that the industry will continue to evolve and progress.
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.