It is not yet 9:30, and all is quiet inside the Federal Express Corp.'s loading dock at Dulles International Airport. A DC10 jet, its cargo doors open, stands ready to take the night's shipments. A horn blast cuts the silence. The first of 15 tractor-trailers wheels around the corner and backs up to one of six ramps on the loading dock. Within minutes, the dock is jammed with large containers, each filled with papers and packages destined for Federal Express' sorting hub in Memphis. Washington is big business for the nation's four major overnight letter and freight companies in the $6 billion industry pioneered by Federal Express 14 years ago. Memphis-based Federal Express remains the industry leader, handling more than half of the overnight express business in the nation.
But United Parcel Service, the 800-pound gorilla of big package shipments, is aiming to expand its 15 percent of the overnight express market at Federal Ex- press' expense. Airborne Express, which is trying to gain customers by offering deep discounts for corporate business, holds about 11 percent of the business. Emery Air Freight Corp., which gained market share last year by buying rival Purolator Courier Corp., is next with a 10 percent slice.
Although analysts said specific figures are hard to come by, Federal Express is believed to hold an even bigger edge in the Washington market than it has nationwide because its special niche is in the speedy, reliable movement of documents. Company officials rank Washington among Federal Express' top six markets.
"Washington is known as a paper market," said David Becker, Federal Express' vice president for domestic and service systems. He and Bradley Barry, managing director for the company's Capital district, estimate that 70 percent of the packages moving to and from the Washington area contain documents, compared with the company's systemwide average of 55 percent to 60 percent.
Moving documents demands high service and high reliability -- Federal Express' specialties -- and generally commands higher prices.
"No one has ever been able to challenge them in that niche," said George V. Robertson, a securities analyst who follows Federal Express for Alex. Brown & Sons Inc. of Baltimore.
"To the extent that Federal Express has half the business nationwide, I would suspect they have a bigger share of the market in Washington" because of the heavy paper flow here, he said.
But maintaining its claimed record of better than 99 percent reliability costs Federal Express money. The company has developed many of the specialized tools that allow it to move parcels on time to the right place. These include hand-carried readers for special bar codes on every package, as well as computers in its trucks -- connected by radio to a central system in Memphis -- that direct drivers to new pick-up locations.
"This is a very, very competitive market, and we're just the fastest in the business," Barry said. "It's not just delivery and pickup. We have to trace, track and respond" to questions about where a package is at any step of the process. This is one of Federal Express' major boasts: that through its computer, it can locate every one of the roughly 900,000 packages that pass through its nationwide system each night.
In addition, Federal Express has 27 storefront offices throughout the Baltimore-Washington region to accept packages, and 12 centers scattered from Springfield to Towson to consolidate the packages into shipping containers and tractor-trailers for the ride to Dulles. Further, a small plane carries Federal Express packages from the Eastern Shore of Maryland to the Dulles center.
UPS, a $9 billion shipping giant that is privately held by its 14,000 managers, doesn't have those facilities -- yet.
With 258 planes handling its package shipments, compared to 155 for Federal Express, UPS has quadrupled its air delivery service during the past five years and is taking aim at Federal Express' overnight service. To do so, UPS is placing special "next day" letter boxes in office buildings and opening a handful of stand-alone air express counters.
These are just a start, however, and still are no match for Federal Express' nationwide network of 12,000 "drop boxes" in building lobbies and the company's more than 500 service centers.
But the very size of UPS -- three times larger overall than Federal Express -- leads analysts to predict that it will improve its market share in overnight delivery.
Robertson and other analysts expect it to be difficult for Federal Express to sustain its remarkable 40 percent annual growth rate of the past five years, as competitors such as UPS muscle into the rest of the overnight express market and improved electronic facsimile transmission cuts into the company's document business.
Federal Express was founded by Frederick W. Smith -- now its chairman -- on the notion that the best way to deliver packages overnight from one city in the country to another was through a sorting hub in Memphis. That idea got a C grade when Smith suggested it in a Yale University business school thesis, but in practical terms it has shown itself to be an A-plus idea.
A recent evening at Dulles illustrated some of the strengths of the company.
With Christmas days away, it was expected to be one of the busiest nights of the year, with the usual Dulles run of documents mixed with small-sized cardboard containers supplemented by last-minute Christmas packages. "This time of year, we play Santa's little helper," said senior ramp agent Sherry Lindley.
In all, Federal Express moved about 125,000 pounds of overnight express packages through Dulles that night, a bit more than usual. There were more lighter-weight packages than usual -- reflecting a heavy run of Christmas presents. They all go to the national hub in Memphis, where all the packages are sorted and forwarded. In addition, another 100,000 pounds of freight was moved by truck to Newark, N.J., where a minihub handles packages for the area north of Washington.
The operation is efficient. As the trucks back into the ramp, loaders and drivers pull off the loaded containers and whirl them across the rotating wheels that make up the loading dock floor. With those wheels, devised by Federal Express engineers, a 6,000-to-8,000-pound container can be moved with ease.
The containers are weighed and loaded onto the DC10. The trucks arrive at the ramp on a schedule set by Lindley, who said, "If they are late they will hear about it." The aim is to get the plane loaded and off the ground by 10:45 -- one hour and 15 minutes after the first truck arrives.
That night things were slow. The number of packages was so great that partially filled containers had to be consolidated on the dock to make sure all the shipments made the plane. That took time, and the plane didn't leave until 10:57 -- 12 minutes late.
Even though everyone realized there was a good reason for being late, there was consternation on the loading dock -- especially because officials from Memphis headquarters were watching the load. "Twelve minutes to us is not good," said Becker, stamping his feet against the cold.
Federal Express attempts to be on the cutting edge in other areas of the business. The company, for example, takes a hands-on approach to management. There were two senior executives from Memphis -- Becker and Senior Vice President Theodore L. Weiss -- watching the operation that December night. The next morning, they were going out with couriers.
The company also follows a policy of promoting from within. Lindley, the senior ramp supervisor, is a former police officer who started with the company in Austin, Tex., as a loader and has risen to her present position in four years. "Anyone can do it if you work hard," she said.