Frederick W. Smith established FedEx in 1971 after proposing an overnight-delivery network in a Yale term paper. Smith argued that urgent shipments would be handled more efficiently through a hub-and-spoke air network rather than by routing them through existing passenger systems.
The company was incorporated as Federal Express Corporation in 1971 and began operations in 1973 from Memphis, Tennessee. Memphis was selected partly because of its central location and favorable weather for aviation. The first night, the company delivered 186 packages to 25 U.S. cities.
Federal Express changed its name to FedEx Corporation in 2000. It is sometimes confused with UPS because both provide parcel delivery, but the companies were founded separately and developed different corporate histories and networks.