H.R. 915: UPS Pleads for an End to FedEx’s Special Status

Posted by E!! on June 24, 2009
Congress, labor unions

So have you heard about the FedEx v. UPS cagefight over a new bill that would put FedEx drivers in the same category as every other package delivery driver in the country, including those at UPS?  (Hint:  UPS is wearing the “Yes” shorts; FedEx the “No.”)

The outcome of the bill, if passed, is that the U.S. government would start treating the two biggest package delivery companies in the land – both of which use air and ground transportation to provide their worthy services – equally by placing their operations under the same federal labor laws.

On its anti-UPS, anti-HR 915 website, FedEx says the change would “force the world’s most efficient airline to operate under trucking rules that have never applied to airlines.”

Um…  Let’s pause for a quick poll by show of hands:  How many think of FedEx primarily as an airline?  And how many think of FedEx as a package delivery company?  Yeah, me too.

However, when FedEx was originally founded, it was deemed an airline because it flew important documents between cities.  So, in a stroke of typical government-level genius, its employees were placed under the Railway Labor Act (RLA).  (A serious re-write of those labor laws was overdue even then, but…)  FedEx remained under this classification even as the company shifted into the package delivery business.  Which happened after the invention of the fax machine. 

So along comes a bill (H.R. 915) which would keep FedEx Express’s airline employees under the Railway Labor Act – like the employees of other airlines – while moving its truck drivers (and ONLY its truck drivers!) over to the National Labor Relations Act (NLRA) with all the other unionized, non-airborn truck drivers in the industry.  Like the UPS drivers.  And FedEx is having a hissy fit over it.

We’ll get back to FedEx’s specific objections in a sec, but first you should know this:

According to the Bureau of Transportation Statistics for 2007, American Airlines has zero “Transport Related” employees (truck drivers). And United, Delta, Southwest, USAirways and Continental have zero truck drivers. Northwest has 165 truck drivers.  And Mesa has 4. But Express Jet, Sky West, American Eagle, Jet Blue, Comair, Airtran and Alaska also have zero truck drivers. Heck, even UPS, which owns a lot of planes, has zero truck drivers – in its airline operations.

And how many drivers does the “world’s most efficient airline” (FedEx) have?  86,979.

And WHY does FedEx – which is digging its claws into its airline status like a crazed cat clinging to the nearest leg – have 86,000-ish more truck drivers in its “airline” operation than the top 20 U.S. airlines combined?  Because, FedEx says, its drivers are “integrated” into its air operations and, therefore, employees who drive packages around town after they arrive at the airport should be considered airline employees.

Sort of like you are “integrated” into airport operations when you take a cab to your hotel, a limo to your party, or your car to your house.  Right?  No?  Well, what about the handful of airline trucks that carry stuff from the planes to the hangar or a nearby airport warehouse?  Oh – you say those ARE an “integrated part” of an airline because they are driving around IN OR NEAR the airport?  Yes, that does make sense.

So, what about the FedEx driver, who, just like the UPS driver, fills his truck with a bunch of packages at the aiport and then drives all over the state delivering them?  Isn’t he about as “integrated” with airline ops as the UPS driver who does the same damn thing off the back of a UPS plane?  And doesn’t it seem unfair that he still has “special” status because of an archaic law and outdated labor categorization?

This prizefight is expected to go 5 rounds.  I’m with the guy in the “Yes” shorts.

You can check out this site for more on this and related issues.  I’m sure Comments would be appreciated.

And for the FedEx propaganda, go here and give your three cents as well.  Personally, I’ve always loved UPS’ guy-with-the-brown-marker on the whiteboard TV ads.  And FedEx has irritated me by ripping it off in an attempt to smear UPS.  So, guess what FedEx?!  I will be sure to use UPS – and only UPS – from now on no matter WHAT happens with H.R. 915.  And I’ll tell anyone who will listen why they ought to do the same. 

Put that in your 86,979 truck tailpipes and smoke it!

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19 Comments to H.R. 915: UPS Pleads for an End to FedEx’s Special Status

Mark Moran
24 June 2009

This is a tough one…I actually worked for Fed Ex Home Delivery for a couple years…we were all contractors which means basically we were employees with no benefits. However, it was work and I did get paid, so as a true capitalist I cannot complain.

UPS on the other hand is controlled by the Teamster’s Union, which by principle, I am against because of that reason.

Fed Ex should not be forced to be unionized, which appears to be the objective of this bill if I am reading it correctly.

Govt. should take a hands off approach to private industry. Let Fed Ex do their thing, and UPS do theirs. There is room for both.

David Hinz
24 June 2009

Sorry, you have this entirely wrong. UPS and the TEAMSTERS union desperately wants the FEDEX money — FEDEX is not union and most employees do NOT want to become unionized.

If FEDEX is put under the NLRB then the teamsters can unionize one or two single stations and f-up the entire nationwide package delivery system.

Maybe YOU think this is a good thing, but not many people look at the unions organizing FEDEX as a good thing.

David Hinz
24 June 2009

And to double down on what I already posted, destroy FEDEX as an air carrier, and you can kiss the American economy good-bye.

Christmas presents? Expect them by Easter.

And the next time the US Military needs a whole s***load of ordinance moved halfway around the world overnight for free? Good luck!

Givemeliberty
24 June 2009

While I don’t really disagree with your logic, why in God’s name would you want to make it easier to unionize any company’s employees? What did FedEx ever do to you? How about allowing UPS to be reclassified under the Railway Act? Better yet, why not adopt national Right To Work law? And then repeal the Wagner Act altogether! While we debate the term “socialist” to describe our current president, he has taken Chrysler and General Motors away from the proper capitalist bondholders and given them to the UAW, meaning the workers. That’s not socialism, that’s outright communism, and not once have I seen that even mentioned in the mainstream media. It seems to me that the unions are being amply rewarded for their support already. UPS should look at the big picture and team up with FedEx to fight the administration, not facilitate even more power for the unions!

matt ceniceros
25 June 2009

Thanks for taking the time to talk about this important issue. FedEx CEO Fred Smith discussed this topic in a blog post http://blog.fedex.com/RLA

Here are some key facts for you and your readers:
1. Do not confuse all FedEx couriers, drivers, etc., The FedEx Corp. operating company in question is FedEx Express. FedEx Express was Federal Express and was founded under the RLA classification.
2. The Railway Labor Act was originally passed by Congress in 1926 to limit economically crippling strikes. The law was a direct response to damaging local strikes that had bottle-necked railroads, the national transportation system of that period, and hobbled the economy.
3. The Ninth Circuit Court of Appeals decided in 1991 that FedEx is the kind of integrated system covered by the Railway Labor Act. The Supreme Court declined to even hear the case because of the soundness of the ruling.
4. In 1996, Congress also reaffirmed that FedEx Express employees were classified properly under the RLA.
5. UPS has been under the NLRA since that law was passed in 1935 because they have always been a ground company. However, UPS does not handle their air shipments in a separate and distinct network that ties directly into their air operation, as FedEx Express does. That’s why their pickup and delivery employees have remained covered by the NLRA.
6. The RLA does not prevent employees from unionizing—after all, more than 70 percent of employees covered by the RLA are represented by unions.

Regards,
Matt Ceniceros
@mattceni

Brian
25 June 2009

Elizabeth – You missed the boat. The whole issue is not how to classify one company versus another, how many employee drive trucks, how many planes they have, what airlines do, what other trucking companies do, etc.

Why should the Federal government even care? Oh, right, $$$. When will someone read the 10th amendment.

OK – maybe I’m applying my personal libertarian leaning views to corporations that do interstate commerce.

While we are at it – lets abolish the dog license.

Mark
25 June 2009

My business delivers 10-30 packages per month. I use the most efficient low priced service for this task. Fed-Ex by far over the years has been the most consistent with the best price for what they deliver. I DONT CARE

Mark
25 June 2009

I DONT CARE if they ship to Tehran, use disabled workers, or make there employess deliver packages on mopeds. it does not matter to me where they invest their corporate profit, if they pay their taxes, or if sexual harrasment is part of their corporate culture. I only care about how good is their service and how much I have to pay.

KEEP WASHINGTON OUT OF THE PRIVATE SECTOR AND LET THE CONSUMER CHOOSE FREELY

Bill
25 June 2009

Hold on now. ALL the employees in three out of four FedEx divisision — Freight, Services, and Ground — have been covered by the NLRB sice they were established, but not ONE of those employees has joined a union. I don’t buy the idea that the company would suddenly unionize just because FedEx Express divers were classified the same way their fellow employees in Freight, Services and Ground divisions have been classified all along.

Steven Dexter
25 June 2009

Thanks for this E. I work for UPS, and am heartened this info is getting out there. Both businesses are the same and should work under the same laws. We have the ninth largest airline in the world with a fleet of 266 aircraft, and we fly more than 1,900 flights a day into 800 airports in more than 200 countries and territories around the world. Same kind of deal for FedEx, for whom I have a lot of respect. Same law for both though.

E!!
25 June 2009

Mark Moran wrote: “Fed Ex should not be forced to be unionized, which appears to be the objective of this bill if I am reading it correctly. Govt. should take a hands off approach to private industry. Let Fed Ex do their thing, and UPS do theirs. There is room for both.”

But the bill does not force FedEx to “unionize.” It simply puts FedEx and UPS under the same law when it comes to any/all unionization issues and makes sure all the players are playing under the same rules. I’d love for government to keep its hands out of this altogether, but since the law as it exists gives one company an unfair advantage over its competitors, that law should be changed.

E!!
25 June 2009

David Hinz wrote: “UPS and the TEAMSTERS union desperately wants the FEDEX money — FEDEX is not union and most employees do NOT want to become unionized.”

If this is true, and it probably is, then FedEx Express drivers would not be unionized by the Teamsters even if they ARE put under the same law as every other express delivery company.

In fact, none of FedEx’s other drivers who are currently/already under the same law as UPS drivers have unionized.

E!!
25 June 2009

Givemeliberty wrote: “How about allowing UPS to be reclassified under the Railway Act? Better yet, why not adopt national Right To Work law? And then repeal the Wagner Act altogether!”

I agree, wholeheartedly, but it’s been tried. As even FedEx notes on its anti-UPS website, “When UPS began to compete with Federal Express with airline-based services, ‘Big Brown’ too sought to operate under RLA status” but the change was blocked.

As for the other suggestions made here….fine. Put those those bills forward and I’ll support them. The reality, however, is that NONE of those changes were made even when Republicans were in charge.

The only field-leveling proposal on the table which has a chance to pass is HR 915.

Bob Beers
25 June 2009

Blast from the past! I haven’t heard about this for a couple of years, ever since UPS pulled its budget to secretly hire bloggers to make its case.

Raymond Newberry
28 June 2009

This is a clear case of Government attemting by force to extract extra dollars where it sees prey. Fed and UPS both perform outstanding services and both are reliable at twhat they do. One happens to be under more control of Gov. than the other. My take is for UPS to take notes and fight the fight to preserve what Fed/ex is trying to hold on to. Then I want UPS to fight the same fight to take back their dignity, why should the government want a piece of them? GREED.

Now that makes me FED/UP

Thomas Dunville
28 June 2009

I see no reason to impose change on a system that seems fair and functional without government intrusion. The two companies do have different designs even if they perform the same services overall. And twice the government has ruled FedEx is correctly classified. If a change should be made I would give UPS the option of removing said restriction on them, reduce Federal regulation so it can compete in the market with FedEx. When given the choice, ALWAYS choose LESS Federal government intervention!

Troy
9 July 2009

the solution to government interfering causing an imbalance, is not more government interference.

ups is going about this all wrong.

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[...] Business, Congress, capitalism, labor unions I’ve blogged on the UPS / FedEx thing before.  Here and [...]

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