James E. Casey and Claude Ryan, who were both 19, had only $100 between them and most of it was borrowed. But hard work, great service, constant innovation and a little luck would eventually transform the American Messenger Company into the global giant United Parcel Service.
Casey, the company’s main visionary and leader, was born on March 29, 1888, in Candelaria, Nev., a small mining town. Soon afterward, the Caseys moved to the fast-growing city of Seattle. The family welcomed three more children and enjoyed a reasonably comfortable life until the father’s health began to decline. James had to quit school at age 11 to help support the family.
He took a job as delivery boy for a department store, earning $2.50 a week. He soon added a second job delivering telegraphs. What he lacked in formal education, Casey made up for in ambition and a keen eye for business. He recognized that the demand for reliable and fast messenger service was growing steadily. Seattle’s population was booming — up from 81,000 in 1900 to 237,000 in 1910. These were the days when few homes and small businesses had telephones and most people relied on messenger companies for local communication. Casey also recognized that the messenger business had what economists term “low barrier to entry” — that is, a would-be entrepreneur needed little formal education and capital to start a company.
Early on, Casey was determined to start his own company. He partnered with two other messengers in 1903 (when he was 15) to start a company but sold his interest two years later. After a brief and unsuccessful sojourn to Nevada to try his hand at mining, Casey returned to Seattle, borrowed some money and joined with Claude Ryan to start the American Messenger Co. Their modest operation consisted of six messengers and a small basement office under a saloon owned by Ryan’s uncle.
Competition was keen since there were nine rival messenger companies in Seattle. But Casey and Ryan poured all their early profits into advertising, mainly to purchase small posters promoting their company and promising “Best Service and Lowest Rates.” These they placed at public telephones all across the city. Casey also insisted his employees dressed neatly and spoke courteously to customers. He soon instituted 24-hour message delivery service, seven days a week, including holidays, features that set the American Messenger Co. apart from the competition.
One of the hallmarks of Casey’s long career was his ability to anticipate changing market conditions and make adjustments in his business strategy. The first such instance occurred just weeks after starting the company when Casey decided to add package-delivery services. It proved a brilliant move as the rapid expansion of telephone service would soon eliminate the message delivery market. Soon the American Messenger Co. signed contracts with some of Seattle’s biggest department stores to handle all their package deliveries. By 1912, five years after opening for business, Casey’s company had 100 employees and a second office.
The next year the company merged with one of its rivals, the McCabe Motorcycle Delivery Service, to become Merchant’s Delivery Service, with James Casey as president. One of his first decisions was to buy the company’s first automobile, a Ford Model T that they subsequently converted into a truck.
In 1917 (the year Claude Ryan sold his interest in the company), Casey revolutionized the package delivery business by reorganizing the way delivery schedules were created. Instead of sending a truck or motorcycle filled with packages for delivery all over the city, he had them loaded according to neighborhood. The result was a dramatic increase in efficiency and profits. It was also around this time that the company adopted the color brown for its uniforms and trucks.
Casey’s next big decision came in 1919 when he expanded operations to Oakland, Calif., and renamed the company United Parcel Service. In 1922, UPS bought a delivery company in Los Angeles and introduced many of its innovative practices — automatic daily pick-ups at established locations, acceptance of checks in lieu of COD, weekly billing and standardized shipping documentation — to UPS operations everywhere. Two years later UPS introduced yet another major innovation, the conveyor belt for sorting and moving packages. By 1930, UPS dominated delivery service on the West Coast and made its first expansion to the East Coast by opening an office in New York City.
Despite this record of success, Casey and UPS faced many challenges in the coming decades. The boom in auto sales, mall construction and suburbanization in the 1940s and ’50s led to a steep decline in retail package delivery for department stores. Casey thus took aim at the huge market for delivering parcels of all sorts for private and commercial customers nationwide — a market dominated by the U.S. Postal Service. To do so, however, required changes in a tangle of federal and state laws that sharply curtailed the ability of private companies to move parcels across state lines (so-called “common carrier rights”), laws that did not apply to the postal service. From the 1950s to the ’70s, UPS waged a long, expensive and eventually successful legal battle that resulted in the common carrier rights being offered to private delivery companies.
All the while Casey continued to innovate and adapt to the changing market. UPS initiated two-day air service in 1953, international service in 1975, and next-day delivery in 1982. Casey, 94 years old at the time of this latter development, still headed the company. He never married and despite his riches lived a quiet and simple life in Seattle. He died in 1983.
The company he built grew still stronger over the next two decades. Today UPS earns $30 billion a year by delivering 3.4 billion packages annually (13.3 million per day). It has 360,000 employees worldwide and operates 88,000 brown delivery vehicles and 265 jet aircraft.
All this from a company started in 1907 with a largely borrowed $100.
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