FedEx calls foul on Big Brown

Brian Straight June 9th, 2009

So, FedEx Express is spending millions of dollars to prevent what it calls the “Big Brown Bailout” by Congress. FedEx is claiming that legislation currently in Congress includes a “230-word legislative bailout deep inside the FAA Reauthorization Act of 2009.”

What’s got FedEx so up in arms? According to the Wall Street Journal, the bill would place FedEx under the jurisdiction of the National Labor Relations Act rather than the Railway Labor Act. The change, according to the article, would make it easier for FedEx drivers to unionize. UPS, which supports the bill, is heavily unionized already.

FedEx, in addition to creating a multi-million dollar campaign to stop the bill, created a web site, www.brownbailout.com, to defeat the bill. According to the web site, “UPS’ bailout would shoehorn FedEx Express – an airline created in 1971 focused on next-day delivery of essential goods and documents around the world – into the same operating rules as a 100-year-old trucking company. FedEx Express and other airlines operate just fine under airline regulations, but UPS doesn’t like competition. Keep in mind, UPS chose to form as a separate trucking company for its pickup and delivery operations.”

The real issue, it would seem, is about organized labor. FedEx is afraid of labor joining the party and raising costs. “In 1997 UPS experienced a system-wide strike that crippled business and commerce across America. Now it wants Congress to expose FedEx Express to that risk,” said Maury Lane, FedEx Express spokesperson in a press release. “America relies too much on the reliability and dependability of the FedEx Express overnight-delivery network, and we can’t allow this bailout to pass only because UPS wants to harm its main competitor.”

FedEx’s argument is that UPS is a delivery company while FedEx is an airline. In fact, according to the web site, “UPS ships 85 percent of its parcels on the ground. FedEx Express is an airline, flying 85 percent of its packages in the air.”

I guess those white delivery vans with the words FedEx on the side are just my imagination. Next time I’m waiting for a package, I’ll just look to the sky as FedEx drops my delivery from above. I sure hope it isn’t breakable because if it is, I’ll have to call UPS.

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Related Topics: Trucking Regulation, Trucking

4 Comments to “FedEx calls foul on Big Brown”

1. Stephen Naughton Says:
   

   June 11th, 2009 at 9:59 am

   When you separate out all of the “spin,” the question is…If a Fedex driver is governed under the “Railway Labor Act,” and every other driver in the world (that is unionized) is governed under the “National Labor Relations Act.” should this be legal. Fedex drivers do exactly the same job, and should be governed under the same law.

   Fred Smith (FDX Chairman) cleverly got a provision into law in 1996 to keep his drivers from being governed under NLRA. The RLA amendment to the FAA reauthorization act simply puts all non-airline employees (throughout the nation) under the same set of labor laws.

   This has nothing to do with a “bailout.” It is simply Fedex attempting to hide their labor advantage fight as a competitor’s issue.

2. Mark Lutzker Says:
   

   June 11th, 2009 at 2:22 pm

   To me it seems like FedEx is getting the bailout. UPS isn’t asking for money, they’re just backing a law that is supported by truckers. FedEx was an airline that is now a trucking company (I would be suspicious of their claim that 85% of their volume is delivered by aircraft) and now they have to play by the same rules. Currently FedEx has the unfair advantage over UPS. Because of the labor laws that UPS abides by, UPS truck drivers are payed more and have better benefits. By following the law UPS remains competitive with FedEx. This seems like a lot of spin and desperate politics by FedEx.

3. Rex Patton Says:
   

   June 18th, 2009 at 9:55 pm

   Excellent article. you completely hit a home run with this,they are not an airline anymore. If Fedex express employees are happy with the way they are treated then they will not vote for the union so it shouldn’t matter at all to the company as to how they are classified.This is a very bad PR move for Fedex. People just no longer have sympathy for CEO’s that try to methodically eliminate their employees rights. You are exactly right also Mark, where are the numbers that back those claims?

4. matt ceniceros Says:
   

   July 8th, 2009 at 10:52 pm

   Brian–

   As you stated in the article the RLA discussion centers around FedEx Express. While FedEx has grown through acquisition to include FedEx Ground and FedEx Freight, ground trucking companies, FedEx Express has maintained its position as an air express network. This has been done for a number of reasons, but primarily to ensure the safe and expedited delivery of time sensitive, time critical shipments that today’s just-in-time logistics cycle is built around.

   The bailout is simple: any company asking for government assistance to effectively compete in the marketplace is a bailout. FedEx Express has not been provided any assistance, just reassurance that its classification is correct by a number of Federal courts and labor boards. UPS has been denied by those same courts to reclassify itself under the RLA because of the way its network is operated.

   lToday, about 70 percent of transportation workers under RLA are unionized, compared with only 7.5 percent of private-industry workers under NLRA. Again, this important issue is about protecting commerce.

   While you do say FedEx Express couriers and UPS drivers do the same job, it’s important to note that FedEx couriers are a critical piece of operating an air express network. UPS management chose to operate an integrated network. Don’t punish global consumers because of bad management.

   Your readers have commented this about employee rights, but FedEx is a FORTUNE Blue Ribbon Best Place to Work having been on the list for 12 of the 13 years the list has been in existence. It has also been named to Pink Magazine’s Best Place to Work for Women, ComputerWorld’s Best Place to Work in IT and Black Enterprise’s Top Companies for Minorities. If this was about employees rights these distinguished publications would not have included the company on these list year after year.

   FedEx competes on culture, not labor law.

   Thanks for your time and the dialog on this important issue.

   Regards,
   Matt Ceniceros

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