The C-40 combines the Boeing 737-700 fuselage with the strengthened wings and landing gear of the larger and heavier 737-800. It also has auxiliary fuel tanks allowing an unrefueled range of up to 5,000 nautical miles (9,300 km) compared with 3,010 nmi (5,570 km) for the standard 737-700.^[3]

First flight took place in April 2000 and the first of the C-40A aircraft entered service in April 2001.^[4]

The U.S. Navy Reserve was the first customer for a 737 Next Generation based "combi" aircraft (capable of transporting cargo and passengers).^[5][6] The Clipper was ordered by the U.S. Navy to replace its fleet of aging C-9B Skytrain IIs. The C-40A is the first new logistics aircraft in 17 years to join the U.S. Navy Reserve. The Navy Reserve provides all of the Navy's medium and heavy airlift capabilities.^[4] The Clipper meets or exceeds international noise and environmental requirements, which the fleet of Naval Reserve C-9s did not. It is also more fuel-efficient and offers increased range and payload capabilities. The Clipper is certified to operate in an all-passenger (121 passengers), all-cargo or combination ("combi") configuration that can accommodate up to three cargo pallets and 70 passengers on the main deck.
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