This video was made possible by Squarespace. Build your website for 10% off at Overnight shipping is an absolute masterpiece
of logistics that happens every single night. It may not be cheap, but you can get a package
shipped from Miami, Florida on a Monday night to Anchorage, Alaska, by 8:30 AM on
Tuesday. In fact, you can even ship a package, for
example, from Edinburgh, Scotland on a Tuesday and have the package arrive in Anchorage,
Alaska by 9am on Wednesday. The speed and efficiency of these worldwide
delivery networks is mind-blowing and it all happens while we sleep. The three major consumer courier companies
are FedEx, DHL, and UPS and each is as impressive as the last. FedEx has more planes than Emirates, Etihad,
and Qatar Airways combined; DHL delivers to every country in
the world including North Korea; and UPS flies to
more than double as many destinations as the largest passenger airline. Each has a global
network that allows for lightning fast shipping at relatively low prices. Behind all this speed are
enormous air networks that connect the entire world daily. Each of these three operates hundreds
of flights nightly, but FedEx is the best example since their operations make them the
largest cargo airline in the world. They have 650 planes flying to 400 destinations
carrying 6 million packages every single day and the vast majority
of these flights operate to or from one of their
hub airports. FedEx’s hub airports are spread out all
across the world and serve as sorting points where
packages are transferred from one plane to another. They has hubs in Singapore, Guangzhou,
Shanghai, Seoul, Osaka, Anchorage, Oakland, Dallas, Indianapolis, Greensboro, Miami, Newark,
Toronto, Paris, Cologne, Milan, and Dubai, but the most important hub of all is the one
in Memphis, Tennessee because that’s their
SuperHub. Memphis is not a huge city—only about 650,000
people live there—but the reason FedEx centers their worldwide operations in this
city is because of it’s location. Memphis is not actually
in the geographic center of the US as might make sense, but it is central. You see, only about 200
miles away in Wright County, Missouri is the mean population center of the US. This is the
average location of every resident in the US meaning that the FedEx SuperHub in Memphis
is the best location to reach the most people
in the shortest amount of time. For similar reasons,
UPS has their equivalent global hub, Worldport, nearby in Louisville, Kentucky. The scale of
FedEx and UPS’ operations in these relatively small cities is staggering. This is the size of the
commercial terminal at Memphis Airport while this is the size of FedEx’s Superhub. The
difference at Louisville airport is even more pronounced where this is the commercial terminal
and this is UPS’ worldport. You can’t even fly to the west coast non-stop
on a commercial airline from Louisville and yet UPS flies from this
small city to five different continents. FedEx’s
operations in Memphis, meanwhile, make this airport the second busiest cargo airport in
the world above those of enormous cities like
Tokyo, Paris, Dubai, Shanghai, and falling short only
to Hong Kong. How the FedEx superhub really works is that
every night, about 150 planes fly in from all
around the world between the hours of 10pm and 1am. Immediately upon arrival, the planes are
unloaded and their packages are put into the hub’s automated sorting system. Within only 15
minutes, each package arrives at a staging area for its next flight where it’s loaded
into containers. Planes therefore can start taking off again
at 2am and continue to until 4am which means that everywhere in the US can have a
FedEx plane arriving by 6am, but there are some
destinations that don’t ship enough packages to need a non-stop flight to Memphis. To get to
small towns fast, FedEx runs flights in small propeller aircraft from the destinations of
their larger jets. Presque Isle, Maine, for example, is far too
small of a town at about 10,000 residents to fill a full-size plane so, every morning,
once the larger planes from Memphis arrive in
Manchester, New Hampshire and Portland, Maine, packages bound for Presque Isle are sorted
into smaller prop planes that continue north. With this system, even small towns like Presque
Isle get their packages by 9am as every spoke in
the system essentially functions as a mini-hub. Packages are transferred from planes, to smaller
planes, to trucks to reach their destination as fast
as possible. Now, it’s important to note that not every
FedEx package runs through Memphis. That
would be incredibly inefficient if a customer wanted to, for example, ship a package from
Phoenix, Arizona to Seattle, Washington. While only 1,100 miles separate Seattle from
Phoenix, a routing through Memphis would total over
3,000 miles and six hours in flight. The package
would still make it overnight, but FedEx would be wasting fuel carrying that package an extra
1,900 miles, so that’s why they have secondary hubs. In this case, FedEx’s Oakland hub has
flights to both Phoenix and Seattle so the package would take a relatively efficient
1,300 mile routing. Memphis essentially serves as the backup hub
in case there’s not a more efficient routing. The secondary hubs, such as Oakland, in general
have flights to destinations that are already served by flights to Memphis, but
the destinations from Oakland are high demand destinations that will ship enough packages
solely to the west coast to fill entire planes to
Oakland. Some destinations, such as Albuquerque, New
Mexico, ship enough packages to fill entire planes to Memphis, but not enough to
fill flights to Oakland with west coast bound packages so a package shipped from here to
the west coast would likely take a rather inefficient
routing backtracking to Memphis. But FedEx’s most ingenious hub is here in
Anchorage, Alaska. Anchorage, with fewer
than 300,000 residents, is home to the forth busiest cargo airport in the world. This is, once
again, thanks to geography. If you draw a straight line from FedEx’s
Memphis hub to the one in Osaka, taking into account earth’s curvature,
it goes directly over Anchorage, Alaska. This
airport is just the perfect stop-over point for flights from the US to Asia. Now, dozens of cargo
airlines operate in Anchorage but most of them just use the airport as a refueling and
crew swap spot. Modern airplanes can fly non-stop from the
contiguous United States to Asia, but doing so
requires taking more fuel which requires taking less cargo. It’s just cheaper to stop in Anchorage,
but FedEx and UPS use the stop for something else—sorting. If FedEx wanted to maintain
current shipping times without the Anchorage hub, they would likely have to run non-stop
flights from each of their Asian hubs to each of their
American hubs, but they just don’t have the
demand to fill this many planes. Instead, they run flights from their Asian
hubs to Anchorage then flights from Anchorage many of their
American hubs. While stopped in Anchorage,
packages from Asia are processed through customs and sorted to be put on the plane bound
closest to their destination. This helps cuts down on shipping time and
cost. Shipping is an incredibly price-sensitive
business. These courier companies rely on
enormous contracts with retailers and, when some of these retailers are shipping millions
of packages per day, every cent matters. In a lot of ways, however, the express shipping
model is inherently expensive largely because of how
couriers use their most expensive assets—planes. So much is centered around those few sorting
hours at the big hubs so FedEx’s planes all have to
wait around to arrive at the exact right moment. Some FedEx hubs, such as Memphis, do sort
packages during the day, but the overwhelming majority of their business happens overnight. FedEx’s flight from Memphis to Oklahoma
City, for example, leaves at 4am and arrives at
5:20am, but then the plane waits around until 10:10pm to fly back to Memphis. That’s over 17
hours sitting in Oklahoma City and, on that route, the plane is only flying for about
two hours per day. Meanwhile, commercial airlines regularly fly
their planes for more than 12 hours per day meaning they have six times higher aircraft
utilization. FedEx would never be profitable if they
bought all new multi-hundred million dollar aircraft to use for mere hours per day, so
they don’t. Overwhelmingly, FedEx and other cargo airlines
use old aircraft at the end of their lives. You’ll
almost never see Airbus a300’s flying for passenger airlines anymore, yet FedEx, UPS,
and DHL collectively own hundreds of them because
they’re cheap. They didn’t spend much purchasing
these aircraft, so they don’t have to worry about using them enough to offset their cost. UPS does
have some brand new 747-800 aircraft, which are highly efficient, but they specifically
schedule these planes on their longest routes so that
they can recuperate their high purchase price through
lower fuel costs. With older aircraft, fuel costs might be higher
since the planes are less efficient, but overall it’s worth it since it allows
FedEx to profitably leave their planes sitting for all but a
few hours each day. Some passenger airlines, such as Allegiant
Airlines in the US, uses the same strategy purchasing cheaper planes to allow
them to fly fewer hours per day profitably and its
now a tested and proven business strategy. Express shipping is one of those businesses
that requires enormous networks to make work which is why you don’t see small shipping
companies. It’s almost impossible to get started
in this business unless, of course, you can make your own demand. Amazon, which ships more
than a million packages per day, is getting into the delivery business. They’ve established a fleet
of 32 aircraft and are building out their logistics network. When shipping so many packages,
Amazon is operating at a scale where they can profit by taking the shipping companies
out of the equation. FedEx, UPS, and DHL, meanwhile, are continuously
focusing on further increasing the efficiency of their networks since in this
business more than any, time is money. As you may have noticed, Wendover Productions
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