A Brief History of the Package Delivery Industry

Topics: United States Postal Service, United Parcel Service, FedEx Pages: 9 (3075 words) Published: May 12, 2011
May 5, 2003

I. Overview

The package delivery industry, which consists of small package and express letter shipments, has changed dramatically over the years. Radical changes have occurred in the goods transported, the geographic scale of the marketplace, customers needs, the range of service options that carriers offer, and the transportation and communications technology that carriers employ. The market today bears little resemblance to the market of 30 years ago (at about the time of the Postal Reorganization Act). It bears even less resemblance to the market of 100 years ago (at about the time Parcel Post service began). It is therefore illogical to consider the package market from 30 years ago, or 100 or more years ago, and draw meaningful public policy conclusions for today and for the future. For example, which carrier entered the market “first” is irrelevant for evaluating the potential role of the Postal Service, or any of the carriers, in the modern package delivery market.

The following provides a brief overview of the various phases of the evolution of the package delivery industry and the key players. The history of the industry reveals a story of innovation, adaptation, risk-taking and customer demand driving development, with the private sector at the forefront.

II. Early Package Movements (Mid-1800’s to Turn of the Century)

Wells Fargo was founded in 1852. While not the only private express company at the time, Wells Fargo provided a central and colorful role in the early package delivery industry. They created a formidable enterprise for mail and package delivery and banking, especially in the West. In addition to its banking and mail carriage role, it exemplified the early private package industry. One of the founders, Henry Wells, had been a partner in a mail and package delivery business in the East (and even at one time considered acquiring the Post Office ).

At the time of its founding, the package and banking businesses were unregulated. Mail delivery, however, had been subject to the statutory monopoly of the Postal Service since 1792 and the enactment of the first “Private Express Statutes”.

Wells Fargo opened its 12 California offices in 1852 and, according to their promotional material, provided national service: “A typical ad stated that Wells Fargo specialized in shipping ‘gold dust, bullion, specie, packages, parcels, & freight of all kinds, to and from New-York, and San Francisco” then to other locations throughout the West. Included in their shipments were newspapers, which were carried for free so that other newspapers could reprint the stories, in that pre-wire service time. This helped bind the nation together, and at the same time provided Wells Fargo with free promotion since they often were credited with delivering the news. Historian Carl I. Wheat wrote “Wells, Fargo & Co’s Express was at this period the most important agency for both express and mail service throughout California and particularly in the mining regions. By 1858, Wells, Fargo went everywhere, did almost anything for anybody, and was the nearest thing to a universal service company ever invented. Next to the whiskey counter and gambling table, Wells Fargo’s office was the first thing established in every new camp or diggin’s.” Wells Fargo was “the single most widespread institution in the early West, being even more omnipresent than the U.S. government.”

Mail and package transport technology was changing rapidly. Coast-to-coast commerce and travel had been provided predominantly by sea. From 1848 to 1858 (from when gold was discovered in California to when the Overland Mail Company inaugurated service ) most mail traveled across the continent by steamship with land carriage over the Isthmus of Panama. The travels of Henry Wells from New York to California in December 1852 by boat and then by mule over the...
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