#192 Jim Casey Founder of UPS

In "Big Brown: The Untold Story of UPS," author Greg Niemann shares his firsthand account of the company's evolution, from its inception by the tireless and visionary Jim Casey to its rise as a delivery service juggernaut. Niemann recounts his own journey starting as a teenage loader for UPS in 1957, eventually moving into management and witnessing the company's expansion amidst the backdrop of America's shifting economic landscape. He reflects on Casey's unwavering commitment to service and strong values, which guided UPS's growth through the Roaring Twenties, the Great Depression, and the rise of the labor movement. Niemann's narrative also touches on the challenges UPS faced with the emergence of FedEx, a competitor that exploited regulatory loopholes to rapidly grow its air delivery service. Despite this, UPS's culture of employee ownership and dedication to efficient service remained its cornerstone, as Niemann proudly documents the company's legacy and his role within it.

• Greg Neiman began working for UPS at 17 years old, loading trailers in downtown Los Angeles.
• He started at $1.62 an hour and witnessed UPS's 50th anniversary.
• Neiman met UPS founder Jim Casey, who was a persistent figure in the company despite retirement.

"So in June I became a PSSer, even though I wouldn't be 18 until July. Close enough, they said, and I was assigned to load a trailer in downtown Los Angeles, starting at a dollar 62 an hour." "Another UPSer gave me the heads up that one of them was company founder Jim Casey."

These quotes illustrate Neiman's early start at UPS and his introduction to the company's culture and its legendary founder, Jim Casey.

• Jim Casey was the son of Irish immigrants and began working at 11 to support his family.
• He founded the American Messenger Company, which became UPS, in a basement beneath a bar in 1907.
• UPS's history is marked by expansion through various eras, including the Roaring Twenties and the Great Depression.
• Casey's values and leadership were central to UPS's development.

"He was a living legend, Jim Casey, the son of Irish immigrants, working from the age of eleven to support a family of five." "Jim Casey remains the center of the UPS universe."

These quotes describe Jim Casey's influential role in UPS's foundation and growth, highlighting his work ethic and impact on the company's culture.

• Greg Neiman authored "Big Brown: The Untold Story of UPS," the first business biography of the company.
• The book captures a century of American business and culture, detailing UPS's growth from a delivery service for department stores to a common carrier.

"Big Brown, the untold Story of UPS will be the first business biography written regarding this elusive yet highly successful corporation."

This quote emphasizes the significance of Neiman's book in documenting the previously untold history of UPS.

• Neiman compares UPS to FedEx, noting the difficulty in building large physical logistics companies.
• Jim Casey took nearly 60 years to realize his vision of nationwide delivery.
• Fred Smith, founder of FedEx, faced immense challenges, including financial crises and legal troubles.

"It took Jim almost 60 years to actually finally achieve his vision of nationwide delivery." "At the age 30, Frederick Wallace Smith was in deep trouble."

These quotes compare the long-term commitment of Jim Casey to the tumultuous founding of FedEx by Fred Smith, highlighting the perseverance required in the logistics industry.

• Casey's philosophy emphasized discipline, reliability, and humility.
• UPS's culture reflects Casey's personality, with a focus on efficiency and attention to detail.
• The company's operations are meticulously measured and refined for optimal performance.

"Casey pursued a spartan business philosophy that emphasized military discipline, drab uniforms, and reliability over flash." "All movement at UPS are subject to efficiency modifications and institutionalized."

These quotes encapsulate Jim Casey's business philosophy and its translation into UPS's culture of discipline and efficiency.

• UPS drivers have autonomy but operate within a complex, disciplined system.
• The company's rigorous selection process and emphasis on employee ownership align with Casey's values.
• UPS's culture is likened to a cult, with a strong sense of dedication and mission.

"Drivers have a lot of autonomy, but at their back is a byzantine system that evolved over a hundred years." "By the time employees have moved a few mountains of cardboard clad merchandise, they've either caught the UPS commitment or they haven't."

These quotes highlight the autonomy of UPS drivers balanced by the company's structured, values-driven system, and the intense commitment expected from employees.

• Casey's approach to management focused on achieving results through others.
• UPS's success is attributed to aligned incentives and ownership among employees and management.

"Casey's definition of good management didn't draw attention to himself, but instead focused on getting results through other people." "This entire book, is the fact that employees and management and company owners, they were aligned because they had skin in the game."

These quotes illustrate Jim Casey's humble approach to management and the importance of employee ownership in aligning the company's interests with those of its employees.

• Jim Casey, founder of UPS, believed in the importance of employees feeling like part of the company, not just workers.
• He emphasized good management as taking a sincere interest in the welfare of the employees.
• Casey was described as a shy, observant man, not seeking attention but always watching and learning.

"Good management is taking a sincere interest in the welfare of the people you work with. It is the ability to make individuals feel that you and they are the company, not merely employees of it."

This quote outlines Jim Casey's philosophy that effective management involves a genuine concern for employees and fostering a sense of unity within the company.

• Jim Casey was known for his meticulous attention to his surroundings, especially concerning his business.
• He was an "internal puzzle solver," always preoccupied with sensory details involving packages.
• His observational skills led to a business opportunity at a UPS national conference in 1972.

"Jim Casey watched the streets carefully. He watched movement. He watched what people sold and what people bought."

This quote demonstrates Casey's dedication to understanding every aspect of his business environment, reflecting his thorough and detail-oriented approach.

• Casey's keen observations led to UPS taking over package deliveries from the US Postal Service at a hotel.
• He was proactive in addressing potential business opportunities, exemplifying his business acumen.
• His actions reflected his belief in always paying attention to find new avenues for growth.

"Say, what do you suppose these packages are here for? He asked me. I think we should be delivering these packages, meaning UPS and not the US Postal service."

This quote shows Casey's active engagement in seeking out business opportunities and his readiness to take initiative to expand UPS's services.

• Despite not having a formal education, Casey was committed to learning and staying informed.
• He engaged in "man on the street" interviews with UPS drivers to assess the company's delivery operations.
• Casey's approach to learning and feedback was similar to other successful founders like Jeff Bezos and Paul Orfalea.

"An unwavering belief and respect for the individual."

This quote captures Casey's philosophy that respecting and empowering individual employees is crucial for a company's success.

• Casey was known for his frugality and minimalism, which was reflected in his office setup and his approach to spending.
• He believed in decentralization and empowering individuals within the company.
• His personal code was discipline, and he valued neatness, humility, frugality, dependability, safety, and a strong work ethic.

"Jim Casey's office was a small, stark room occupied only by a metal desk, several chairs, and a coat tree."

This quote illustrates Casey's frugal and minimalist approach, which also served as a model for how he ran UPS.

• Casey's experience with poverty in his early life had a lasting impact on his business philosophy and practices.
• The hardships faced by his family, particularly his father's health issues, influenced Casey's work ethic and drive.
• His personal experiences underscored the importance of resilience and resourcefulness in business.

"The eldest of four children, Jim was considered the family patriarch. He was not warm and cuddly uncle but a gentle, polite, and considerate person."

This quote provides insight into Casey's character and the responsibilities he shouldered at a young age, which shaped his later business ethos.

• Casey's commitment to UPS was profound, with a career spanning 76 years.
• His dedication to the company was so intense that it seemed he had no private life beyond UPS.
• Casey's influence on UPS's growth and success is attributed to his unwavering dedication and his ethical approach to business.

"Jim Casey, the man was subsumed by something greater than himself."

This quote reflects on how Casey's identity and life were deeply intertwined with the success and ethos of UPS.

• Jim Casey, at 11 years old, was responsible for supporting his family due to his father's ailing health.
• He took on a job as a messenger and delivery boy, which was suggested as suitable work for someone his age.
• Jim's work ethic and maturity were evident from a young age, as he worked long hours to support his family.

"Support, eleven year old Jim Casey had developed a maturity that bellied his age. His family was in a precarious his family was in precarious straits and it was up to him to solve the problem."

The quote highlights Jim Casey's early development of responsibility and maturity in response to his family's difficult financial situation.

• Jim Casey was hired as a driver's helper at a department store for $2.50 a week.
• He learned the fundamentals of delivery, including understanding street numbers and delivering packages.

"Jim Casey asked the personnel manager if the store had any work he might do. The manager said, our driver could use a helper. It's $2.50 a week. Report tomorrow at 07:45 a.m.. Sharp."

This quote describes Jim Casey's entry into the workforce and the beginning of his career in the delivery industry.

• Jim and his brother worked to support their family on $6 a week.
• Their father, Henry, succumbed to his respiratory condition, increasing the pressure on Jim to provide for the family.

"For a while, the two oldest Casey boys supported their entire family on $6 a week."

The quote emphasizes the financial contribution and the burden shared by Jim and his brother to support their family.

• Jim Casey worked various messenger jobs, including delivering telegrams, mail, and packages.
• He requested the night shift to attempt attending 9th grade, but ultimately left school after two months.
• His job also involved dangerous tasks, such as delivering opium and acting as a detective.

"Jim's job. He picked up and delivered telegrams, mail and packages."

This quote summarizes the range of tasks that Jim Casey undertook as part of his early career in messaging and delivery services.

• Jim Casey aspired to a life of comfort and success, symbolized by the warmth and luxury of hotel living.
• He eventually lived exclusively in hotels, fulfilling his early ambitions.

"To the busy and driven young man, life in a hotel seemed the height of achievement."

The quote reflects Jim Casey's aspirations for a successful and comfortable life, as observed from his early experiences of observing the wealthy.

• At 15, Jim started his own business, initially struggling but persevering with the venture.
• He explored opportunities during the gold rush in Nevada, setting up a messenger service there.

"Okay, so moving forward a little bit, when he's 15, he starts his own business."

This quote marks the beginning of Jim Casey's entrepreneurial journey with the establishment of his own business at a young age.

• Jim Casey and his partner Ryan started American Messenger Company with $100 in a small office.
• The company emphasized courteous service and operated around the clock, with Jim and Claude often sleeping on the desk to handle night calls.
• The business initially provided a variety of services, including babysitting and detective work.

"Casey and Ryan launched american messenger Company on August 2819, seven from a tiny. Basement office beneath a bar."

The quote details the humble beginnings of what would become UPS, highlighting the startup's initial capital and location.

• Jim Casey and his team decided to narrow the focus of their business to delivering packages from retail stores.
• They signed a contract with King Brothers clothing store, offering same-day delivery, which marked the beginning of a more focused and profitable business model.

"The young team cast about for a strategy that would add substance to their business."

This quote demonstrates the strategic thinking that led to a more substantial and focused business model for Jim Casey's company.

• The company invested in technology, starting with a motorcycle and then moving to a Model T Ford for deliveries.
• Charlie Soderstrom's influence led to the use of automobiles and the iconic UPS Brown color for their fleet.

"Invest in technology, the savings compound. And sometimes it can be the difference. Between profit and loss."

This quote underscores the importance of investing in technology for business efficiency and growth, a principle that has remained with UPS through the years.

• Jim Casey aimed for nationwide shipping, a goal that took 68 years to achieve due to regulatory challenges.
• The company expanded by partnering with and acquiring other delivery businesses, often trading shares of UPS stock for acquisitions.

"Jim Casey's ambition had long been nationwide shipping coast to coast to every address. In the 48 continental states."

The quote captures Jim Casey's long-term vision for UPS to become a nationwide delivery service, highlighting the ambition and scope of his goals.

• The ICC was the first regulatory commission in U.S. history, aimed at protecting against railroad malpractice.
• Its jurisdiction extended to various transportation services, including trucking companies, bus lines, freight forwarders, water carriers, oil pipelines, transportation brokers, and express agencies, but not airlines.
• Any business that charged for transporting goods or passengers across state lines fell under ICC regulation.

"The first regulatory commission in us history, it was started to protect against railroad malpractice. But ICC's jurisdiction extended to trucking companies, bus lines, freight forwarders, water carriers, oil pipelines, transportation brokers, and express agencies, too, except for airlines."

This quote explains the purpose and extent of the ICC's regulatory power, highlighting the breadth of its oversight in the transportation sector, with the notable exception of airlines.

• UPS tackled ICC regulations city by city, state by state, or multi-state area at a time.
• They adopted a slow and steady approach likened to Aesop's tortoise, aiming to provide delivery service across America.
• UPS maintained a low profile, using polite persistence to combat the bureaucratic challenges posed by the ICC.
• Their main competition, subsidized by taxpayers, operated at a loss and did not reflect costs in its rates.

"UPS would take on the ICC one city, state, or multi state area at a time."

This quote outlines UPS's methodical strategy for expansion, indicating a meticulous and localized approach to dealing with regulatory challenges.

"Like ASOP's tortoise, UPS was sure and steady, plodding towards its objective of providing delivery service all over America."

The metaphor of Aesop's tortoise is used to describe UPS's consistent and humble strategy for growth, emphasizing perseverance and subtlety.

• The government's parcel post operated at a loss and required subsidies to maintain low package delivery rates.
• As a government agency, the parcel post enjoyed numerous advantages, such as tax exemptions, zoning law exemptions, and access to cheap government credit.
• UPS faced the challenge of competing with a subsidized entity that did not need to reflect its costs in its rates, putting UPS at a significant disadvantage.

"This was the case despite the fact that the government's parcel post." "A loss and needed to subsidize package delivery to keep its rates as low as they were."

These quotes highlight the financial challenges faced by UPS in competing with a government-subsidized service that could afford to operate at a loss due to taxpayer support.

• Jim Casey almost sold UPS, but the deal fell through due to the onset of the Great Depression.
• The deal would have involved a holding company purchasing UPS for $2 million and 600,000 shares of Curtis Airplane stock.
• After the deal, the UPS partners would have remained in management control for five years.
• Casey regretted the potential loss of employee ownership and doubted the new management's commitment to loyal employees.
• The stock market crash of 1929 allowed for the deal to be undone, and after four years, UPS stock was returned to employees.
• Employee ownership is credited with significantly contributing to UPS's success.

"He almost sold ups. And if it wasn't for the financial." "Crash that starts the Great Depression, he." "Would have sold ups."

This quote reveals the historical context in which UPS was nearly sold, and how the Great Depression inadvertently preserved the company's independence and employee ownership structure.

"Their independence was preserved. Jim Casey recalled. We learned in those four years lessons that should never be forgotten."

The quote reflects on the importance of maintaining independence and the valuable lessons learned during the period when UPS's ownership was at risk.

• FedEx was established as an airline, not a ground delivery company, which exempted it from ICC regulations.
• By being classified as an airline, FedEx fell under FAA jurisdiction instead, allowing it to avoid the common carrier regulations that burdened UPS.
• FedEx's nationwide concept with a single hub revolutionized air delivery and outpaced UPS, which took eight years to respond seriously to next-day air delivery.
• UPS was initially dismissive of FedEx, failing to recognize the threat it posed.

"That FedEx was established in 1973 as an airline, not a ground delivery company, is an important legal distinction."

This quote points out the strategic move by FedEx to establish itself as an airline, thus circumventing the regulatory hurdles that UPS faced, showcasing a clever exploitation of legal classifications.

• UPS's complacency led to a slow response to FedEx's innovative approach.
• The company's success and expansion efforts made it overlook the emergence of FedEx as a serious competitor.
• UPS's failure to acknowledge FedEx's impact is compared to Henry Ford's reluctance to innovate beyond the Model T.
• History shows that companies often repeat the same mistakes due to human nature, not historical repetition.

"Most UPS took the ostrich approach, ignoring the new company."

This quote captures the initial reaction of UPS to the rise of FedEx, illustrating a common pattern of established companies underestimating new entrants into the market.

• The podcast reflects on the inevitability of all companies' decline over time, as expressed by Charlie Munger.
• Companies and their business models become obsolete as new dreams and innovations emerge.
• The discussion includes a comparison of UPS's traditional business model with modern tech businesses that operate with far fewer employees and higher revenue per employee.
• The podcast emphasizes the importance of enjoying the work and recognizing the transient nature of business success.

"Over the long term, all great companies will die."

This quote from Charlie Munger encapsulates the natural life cycle of businesses, which, like biological organisms, eventually decline and are replaced by new entities.

• Jim Casey's belief in employee ownership as a cornerstone of UPS's success is reiterated.
• The podcast concludes with a reflection on the enduring impact of books and the wisdom they contain from individuals long gone.
• The message is one of continuous progress and the cycle of innovation, where old methods give way to new advancements.
• The podcast encourages listeners to take work seriously, serve others, and have fun, recognizing that everything has its time.

"The basic principle, which I believe has contributed more than any other to the building of our business as it is today, is the ownership of our company by the people employed in it."

Jim Casey's quote underscores the value he placed on employee ownership, linking it directly to the success and culture of UPS.