Saturday, November 28, 2009

Finally, Something FedEx and UPS Can Agree On
November 25, 2009

In a column published in the October 2009 issue of Reason magazine, Veronique de Rugy writes:

"Imagine two competing pizza delivery companies that are identical in every way except their delivery methods. Pizza Company A delivers its pizza by car and Pizza Company B delivers its pizza by bike. Now imagine that the government has completely different labor laws for pizza parlors with cars and pizza parlors with bicycles. The result is much larger labor costs for Company B than Company A. Is that fair?"

Well, of course not. Yet that is exactly how the government is currently treating FedEx Express and UPS package delivery drivers.

FedEx, which enjoys a competitive advantage because of this unfairness, wants to keep things exactly as they are. UPS, which is getting screwed in the deal, wants the situation fixed. Who can blame them?

You see, FedEx Express drivers fall under the Railway Labor Act because when the company was founded it was primarily an overnight airline service. The Railway Labor Act makes it far more difficult for workers to form a union.

UPS drivers are covered under the National Labor Relations Act because when the company was founded it was primarily a long-distance trucking company. Its drivers are represented by the Teamsters union.

Over the last decade or so, however, both companies have expanded into the same market in the air/ground express delivery business. FedEx Express now has a fleet of ground delivery drivers and UPS now has a fleet of airplanes.

So unlike the two hypothetical pizza delivery drivers Ms. de Rugy references in her column, the express delivery drivers for both FedEx and UPS now deliver packages in the same manner and should now be covered under the same labor law. As UPS has been saying all along, a driver is a driver is a driver.

With that principle of equal protection under the law in mind, UPS is supporting an amendment in the pending Federal Aviation Administration reauthorization bill which would place FedEx Express drivers under the same labor law as UPS's express drivers.

In other words, leveling the playing field.

After all, FedEx Express uses its special legal status to frighten prospective customers, selling them on the notion that FedEx is more dependable because they are non-union and, therefore, not subject to labor unrest or strikes like its competitor, UPS.

Indeed, FedEx Express is even using its protected non-union status as a selling point in its PR campaign against the current law change with Congress.

Understandably, conservatives and Republicans (not necessarily the same thing) have asked "Why not put UPS under the RLA instead of putting FedEx Express under the NRLA?" Good question.

Short answer: They tried.

"In 1993," de Rugy writes, "UPS argued to the NRL Board that all of its activities, 'including ground operations,' should be subject to the RLA 'because the ground operations are part of the air service.'"

And while, according to columnist George Will, "FedEx supported UPS's efforts" publicly, some suspect that FedEx founder Fred Smith actually has used his considerable lobbying power and extensive congressional relationships to scuttle any such effort behind the scenes.

In any event, de Rugy notes that UPS's request "was denied, opening the path to today's battle."

So you see, UPS tried to get the government to treat its express delivery drivers in the same favorable manner as it treats FedEx's express delivery drivers. But because Congress refused, UPS now has little choice but to support legislative efforts to level the playing field by getting Congress to treat FedEx's express delivery drivers in the same unfavorable manner as the law treats UPS's express delivery drivers.

Equal protection under the law. A driver is a driver is a driver.

Ms. de Rugy, however, thinks UPS should "continue pushing for reclassification, or just competing fair and square under current law."

But that's exactly the point. Current law does NOT treat UPS "fair and square." Current law gives FedEx Express a significant competitive marketing advantage - and there's no way on God's green earth that today's Democrat-controlled White House and Congress are going to reclassify UPS under the RLA.


The ideal solution, of course, would be to scrap the Industrial Revolution-era NLRA set of labor laws entirely, as well as the RLA, and start from scratch developing a new set of labor laws which would better reflect the modern day era's high-tech and service-oriented workforce. But that makes too much sense, so don't hold your breath waiting.

Plus, Congress has a health care system to ruin. Priorities, you know.

In any event, don't blame UPS for this mess. Blame the government. That should be something UPS and FedEx can both agree on.

Happy Thanksgiving, everyone!

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