FedEx, UPS labor showdown nears

[Omaha Steve]

http://www.dcvelocity.com/articles/20100503fedex_ups_labor_showdown/

By Mark B. Solomon

For years, the two have wrangled over the labor status of FedEx's air operations. Now, the fight is coming to a head on Capitol Hill.

By Mark B. Solomon

In a mid-March interview with Bloomberg News, FedEx Corp. Chairman Frederick W. Smith revealed that in 2001, he had arranged a meeting with Jim Kelly, then chairman of rival UPS Inc., to discuss ways ground workers at FedEx's air express unit and at UPS could both be covered under the Railway Labor Act (RLA), a federal labor law that applies only to airlines and railroads. (While FedEx workers are governed by the RLA, UPS is covered by a separate law.)

The meeting was set for Sept. 13, 2001, Smith told Bloomberg. But it was canceled after the Sept. 11 terrorist attacks and never rescheduled, he said.

UPS has a different version of events. No meeting between the companies was ever on the calendar, according to Malcolm Berkley, a Washington-based UPS spokesman.

The anecdote demonstrates that in business, like war, often the first casualty is the truth. And few would dispute that the history of FedEx and UPS has been anything other than warlike. For well over 30 years, the companies have fought over market share, shipper hearts and minds, and just about anything concerned with one-upping the other.

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 different 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.

FedEx has made no bones about its opposition to the reclassification. A change in the unit's labor 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.

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