Last month, Congress passed a funding extension to the Federal Aviation Administration and imposed stricter training mandates on pilots, and required passengers to be notified when a flight was being operated by a smaller commuter carrier on behalf of another airline. These changes were designed to address safety issues that led to the crash of a Colgan Air flight near Buffalo, N.Y., in February 2009 that killed 50 people.
However, the bill that passed was significantly pared down from a larger overhaul that had been stalemated in part by a controversial 250-word provision which has erupted into a confusing public spat between shipping giants UPS and FedEx. The simmering conflict will now be postponed until after the August congressional recess.
The struggle centers on several sentences that would amend the arcanely named Railway Labor Act (RLA), which governs labor relations for airlines. The language essentially forces non-airline employees of FedEx Express, like truck drivers, to be governed by the National Labor Relations Board (NLRB). This would allow them to organize locally instead of nationally, as they can under the RLA. In other words, it would make it easier for employees of FedEx to unionize. (UPS is already heavily unionized and governed by the NLRB).
Not surprisingly, FedEx is not pleased with this section of the legislation, while UPS is supportive. After all, having a more heavily unionized workforce could add to FedEx’s labor costs, which, the company claims, could add a 10 percent surcharge on packages.
At the heart of FedEx’s argument is the claim that FedEx Express and UPS are very different companies. UPS is a 100-year-old parcel delivery company, while FedEx was founded in 1971. FedEx claims that 85 percent of FedEx Express packages are delivered via air, whereas 85 percent of UPS packages are transported via ground (a figure that UPS disputes). UPS counters that its operations are similar to those at FedEx: Both transport packages by air, but final deliveries are handled by a truck driver. UPS also points out that FedEx is the only express delivery company whose drivers, loaders and sorters are governed under the RLA.
But instead of having a civil and constructive debate in Congress (when was the last time that happened?), FedEx has taken its case directly to the public and gone extremely negative in the process.
In June 2009, FedEx launched Brown Bailout, a website portraying the rule change as a “bailout” for UPS. The site includes testimonials from business that rely on overnight shipping, a blog and videos attempting to explain the issue with a poor man’s doppelganger of the UPS whiteboard guy (and The Postal Service soundtrack).
Not to be outdone in the court of Internet opinion, UPS has launched its own information page, attempting to refute the FedEx talking points while also taking shots at FedEx’s “multimillion dollar campaign to distort reality.”