DC Velocity - June 2010

But for pure spin, perhaps nothing
matches the ongoing fight over
which labor law should govern the
operations of the FedEx air unit,
known as FedEx Express. As
Congress debates whether the unit
should be reclassified under a differ-
ent labor statute—one that would
make it easier for unions to organize
the unit—both sides have staked out
strong advocacy positions and have
public relations resources at the
ready.

status would give unions the power to call job actions within a city or a region, creating a negative ripple effect across the entire network, the company has said. Such a change could also trigger a $5 billion “hidden package tax” on shippers and consumers by forcing FedEx to implement costly contingency plans to deal with local work stoppages that could jeopardize the reliability of delivery operations systemwide, the company said.

Last June, FedEx launched a website called “Brown Bailout,” on which it claims that UPS, which supports the change, is seeking what amounts to a government bailout to mask its inability to compete with FedEx in the marketplace.

UPS argues that it’s a question of fairness. It contends that FedEx Express employees like drivers, sorters, and load-ers have nothing to do with aircraft operations. Those workers, UPS said, should be governed by the same labor law that covers trucking labor, not airline workers. Berkley, the UPS spokesman, said UPS has kept a low PR profile, noting it devotes only one page on its website to the issue. Yet in recent weeks, a Washington-based group called the Same3 Coalition has emerged to lobby on behalf of UPS’s position and against FedEx. Kevin Kearns, the group’s executive director, did not respond to an e-mail request for comment. Berkley said he was unaware of the organization.

A deep-rooted dispute

At the heart of the debate is how the two companies are classified. Since its founding in the early 1970s as Federal Express Corp., FedEx has been considered an airline and its operations have been governed by the RLA, a 1926 law that allows for government intervention to end strikes and that requires a company to be organized as one national bargaining unit instead of being organized terminal by terminal. Congress enacted the RLA to prevent local walkouts from disrupting a nationwide rail network, at the time the near-exclusive means of intercity freight transportation.