A package deal: FedEx vs. UPS gets ugly
I noticed an online ad, sponsored by FedEx, blasting UPS for allegedly asking Congress for a "bailout." At first glance, I thought it was "just another bailout," but an hour later on another website, the ad returned. To be so blunt in a campaign directly targeted at competition is very suspicious. That was when I decided to look into this matter.
To my surprise, I discovered that people were being fooled by these FedEx ads. The employees of both companies are at the heart of this battle. Here's the scoop:
We all know that UPS and FedEx have similar business models; however, these two companies have very different labor structures. Since FedEx began as an airline, nearly all of its 100,000 hourly workers comply with the Railway Labor Act (RLA). This law is designed to keep US skies and railroads functioning safely at all times despite labor disputes. This means that if FedEx employees get upset with the company, they cannot organize a strike that will shut down the operations that are crucial to global delivery via air and ground. Instead, employees are allowed to sue in federal court, undergo negotiations etc.
On the other hand, UPS employees are protected under the National Labor Relations Act (NLRA). This law is more liberal because it allows employees to easily organize a union.
Due to the recession, more companies are cutting costs and employees are often the first to feel the pinch. Taking into account both labor laws, if UPS decided to cut labor costs by decreasing pay, employees can fight back with a strike.
Imagine no big brown trucks, or backed-up mail. If this were to happen, UPS would take a serious financial hit and lose customer trust and plenty of big corporate accounts. FedEx employees don't have this option, and operations would continue as normal. Sound unfair to you?
UPS has lobbied Congress to reauthorize the RLA since the 1980's, when it launched its air service. This will ensure fairness and perhaps allow both companies to adhere to the much favored RLA (which FedEx employees comply with).
FedEx jumped back with a forceful campaign to stop UPS from its heavy lobbying. It states that the "wording" used in UPS' proposal is similar to a "bailout." UPS fired back with a PR release which states that they are in no way asking for a bailout. They are instead lobbying for fairness in the law.
UPS may face some difficulty, because unlike FedEx, it began as a ground delivery company, and remained this way during NLR's enactment in 1935. Being that it then expanded into air delivery, should it still adhere to NLR? Keep in mind that FedEx operates both air and ground, which is the same as UPS, but the law remains unchanged.
This will be an interesting battle, with much importance. Employees should be closely involved, and FedEx needs to properly inform the public.