Tuesday, April 28, 2009

Jim Casey (More about business innovation)

Our Founder

“One measure of your success will be the degree to which you build up others who work with you. While building up others, you will build up yourself.”—Jim Casey




Jim Casey, founder of United Parcel Service (UPS), revolutionized package delivery around the world. A teenager when he started his own delivery company, Mr. Casey left three legacies by the end of his life: UPS, the Annie E. Casey Foundation, and Casey Family Programs. He always remembered that he had not done it alone.

He consistently gave credit to his mother, Annie E. Casey, for holding their family together after Jim’s father died. As a youngster delivering packages on the Seattle streets, Jim Casey was exposed to the excesses of a bustling city in the midst of the Klondike gold rush. It was the guidance of a strong mother and support of his family that kept him grounded.

The successful businessman sought ways to help those who lacked the family life he knew to be so crucial. With his brothers George and Harry and his sister Marguerite, Mr. Casey created Casey Family Programs in 1966 to help children who were unable to live with their birth parents—giving them stability and an opportunity to grow to responsible adulthood.

1907-1913: Creating a Messenger Service

At the beginning of the 20th century, the United States was about to embark on an era of transformation and innovation. America was focused inwardly on its growth, and the West was largely undeveloped. While Seattle, Washington, was fairly well-established, the city was still rife with opportunity, particularly for service-based businesses.

In 1907, two teenage entrepreneurs created what would become the world's largest package delivery service. Starting in a Seattle basement with a $100 loan, Claude Ryan and Jim Casey opened the American Messenger Company. With telephones and automobiles scarce, the company fulfilled a range of tasks, from running errands and carrying notes on foot or on bicycle, to making home deliveries for drugstore customers. Their fledgling business entered a competitive marketplace, facing numerous firms that also specialized in message and parcel delivery.

Already experienced in business when he began the company, Jim hired other teens as messengers, and his younger brother George joined the firm's leadership ranks. Operating under the principle of providing the best service at the lowest rates, the company prospered. Jim's steadfast commitment to reliability, courtesy, neatness, and high ethical standards helped establish the values that continue to guide UPS today.

1913-1918: Retail Beginnings

A merger with Evert McCabe's competing package delivery business helped the company redefine its primary charge. With enhancements to telephones reducing dependency on messenger companies, in 1913 the American Messenger Company shifted its focus to delivering packages from grocery and drug stores to customers' homes. The company's name changed to Merchants Parcel Delivery, highlighting its new mission.

After adding Evert's motorcycles and a Ford Model T to its transportation reserve, the company began to consolidate its deliveries so that all packages for a specific neighborhood would be loaded onto the same vehicle, maximizing use of resources while keeping expenses low.

The business grew quickly, thanks to the company's dedication to its customers. Jim Casey and his colleagues became experts in fulfilling the needs of the drug and grocery stores. In most cases, the company's employees worked onsite at the stores to ease distribution efforts.

The final founding member of the company, Charlie Soderstrom, joined the firm in 1916. With his expert knowledge of automobiles, he helped manage the company's rapidly expanding fleet of delivery vehicles.

The young company's visionary leaders saw a new opportunity to promote their business, and ultimately persuaded retailers to outsource delivery services to their company. The executives had to create an element of trust and credibility for the retail stores to agree, and those businesses had to overcome faith in their own systems in order to cede to a third party. In 1918, three of Seattle's leading department stores became customers, abandoning their own internal delivery efforts, and turning over business to Merchants Parcel Delivery.

1919-1930: Entering the Common Carrier Era

In 1919, the company made its first expansion beyond Seattle to Oakland, California, where the name United Parcel Service debuted. "United" reflected the company's consolidated shipments, while "Parcel" indicated the kinds of deliveries the company made, and "Service," noted Charlie Soderstrom, "is all we have to offer." During the same year, Charlie was credited with the idea of painting all the company's cars brown, chosen for its stately appearance.

In addition to changing its name, United Parcel Service continued to develop new approaches to its operations. In 1922, the company acquired a business in Los Angeles that offered "wholesale delivery" service, shipping products from the manufacturer to the distributor. This section of the company quickly began providing its product transportation services to the public, in the same way that the U.S. Postal Service did. This was known as common carrier service. The acquisition of common carrier rights enabled the company to deliver packages to private and commercial customer addresses. This step placed UPS in direct competition with the USPS. The offerings included daily pickups, cash-on-delivery payment acceptance, automatic return of undeliverable packages, and weekly billing, all at rates competitive with the post office. Common carrier services began slowly at UPS, spreading first throughout southern California.

The 1920s marked a period of technological and service innovation. A major new development occurred in 1924, when the company introduced an innovative conveyor belt system used for package handling. Then in 1929, UPS began to offer air service through private airlines. The economic downturn in the U.S., along with a lack of volume, led to the end of the service two years later.

Geographic expansion emerged as a bold new opportunity for the company. Through the end of the 1920's, UPS expanded its retail delivery service to encompass all major cities along the coastline of the Pacific U.S., including San Francisco, San Diego and Portland, Oregon. In spite of the economic conditions after the U.S. stock market crash of 1929, UPS expanded eastward the following year, opening operations and moving its headquarters to New York City. 

1930-1975: Expansion and Transformation

UPS grew throughout the 1930s and early 1940s by acquiring delivery responsibilities for department stores in Chicago, Cincinnati, Milwaukee, Minneapolis, and Philadelphia. Fuel and rubber shortages during World War II, combined with rationing of most retail goods, led stores to limit delivery services and encouraged customers to carry their packages home themselves.

After the war ended, America witnessed the development of the suburbs, and new consumer trends emerged. More Americans were buying cars and shopping at suburban malls with large parking lots. UPS recognized that its role in home delivery services for department stores was limited, and its management pursued new growth opportunities.

UPS management sought to expand its breadth of services. In 1953 UPS began common carrier operations by providing package transportation services to the public in cities where the company did not require authorization by the state commerce commissioner or the Interstate Commerce Commission to do so. During the same year, Chicago became the first city outside of California in which UPS offered common carrier service. Amid the determined pursuit of common carrier service deregulation, the company reintroduced air service, offering two-day delivery to major East and West Coast cities in 1953. As with the previous effort, UPS shipments flew on regular commercial flights.

The expansion effort was fraught with challenges. Strict state and federal regulations limited access and entry to major markets. In some instances, shippers were required to transfer a package between several carriers before it reached its final destination. UPS faced unprecedented legal battles to obtain the proper certification to operate over areas wide enough to satisfy growing public demand for its unique services. Over the course of 30 years, UPS pursued more than 100 applications for additional operating authority. By winning these challenges, UPS effectively laid the groundwork for other delivery companies to compete in the marketplace. In 1975, UPS became the first package delivery company to serve every address in the 48 continental United States. This momentous convergence of service areas became known within UPS as the "Golden Link." 

1975-1990: International Growth and UPS Airlines

UPS increased its reach in the mid-1970s by growing internationally and at home. In 1975, the corporate headquarters moved from New York City to Greenwich, Connecticut. That same year, UPS went abroad for the first time when it began offering services in Toronto, Canada. The following year saw the start of operations in Germany. Over the next decade, UPS expanded its service throughout the Americas and Europe. After purchasing IML, a British document and parcel delivery company, in 1989, UPS extended service to the Middle East, Africa, and the Pacific Rim.

The need for air shipment increased in the 1980s, and UPS focused on expanding its presence in the skies. Deregulation of the airline industry allowed new opportunities for UPS, as some established commercial carriers reduced flights and even abandoned some routes completely. In order to ensure the company's reputation for dependability, UPS took steps toward creating its own fleet of airplanes.

With increasing public demand for quicker service, UPS entered the overnight air delivery business. By 1985, UPS Next Day Air service was available in all 50 states and Puerto Rico. That same year, UPS introduced international air package and document service between the U.S. and six European nations. In 1988, UPS won approval from the Federal Aviation Administration (FAA) to operate its own aircraft, thus launching UPS Airlines. Organized in slightly more than one year with all the needed technology and support systems, UPS Airlines was the fastest airline start-up in FAA history. Today, it is the world's eighth largest airline.

Currently, UPS runs an international package and document network in more than 200 countries and territories. With its worldwide services, UPS moves nearly 15 million packages through its network each business day.

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