WHAT IS THAT STUFF THAT TRICKLES DOWN?

February 18, 2010 04:28 PM EST by Karl Leuba

Organizing labor has never been easy, And FedEx knows that if it ever gets easy they will be well equal to UPS. Here is the way the regulations are, UPS is regulated by the National Labor Relations board, and FedEx is regulated under the Railway Labor Act. The difference is this, Air Lines and Railroads have a de facto protection against union labor, collective bargaining contracts have to cover all workers nation wide to help prevent paralysis in the industries because of local strikes. There are more details HERE from National Public Radio.

Congress is considering changing the status of FedEx, putting them in the same regulatory mix with UPS and other trucking and delivery companies, and making it much easier to organize workers in local terminals. FedEx does not like this idea at all. They have launched a multimillion dollar ad campaign to get the change in status out of the FAA renewal bill now in the Senate. It has already passed the house.

Public Relations Week, says, “Earlier this week, FedEx launched a multimillion-dollar campaign, Brown Bailout, directly attacking its competitor United Parcel Service (UPS) for supporting legislation that could make it easier for some of FedEx’s workers to unionize. FedEx argues that the bill, currently making its way through Congress, is tantamount to a government bailout for UPS, because it would stifle competition.” You can read that story, if you register, HERE. UPS on the other hand says that FedEx has an unfair competitive advantage. It seems clear they do, since UPS employees have very widespread collective bargaining agreements, along with the resultant Higher Wages, Better Working Conditions, Better Health Care Coverage, Better, fully funded, Retirement Plans, and all the other benefits that go with Union Representation.

An Article in Business Week echos that, and shows the difference in the profitability of Each company. FedEx earned 182 million dollars on revenues of 8.14 billion. UPS earned 718 million on revenues of 10.9 billion. This is NOT a mistake. FedEx had a profit of 182 million dollars on 8.14 billion dollars in revenue with a labor force that is non union, earns less than UPS workers, and UPS made 718 Million on 10.9 billion with almost full unionization. For every 49 dollars FedEx earned on their revenue, UPS earned 59. And, the Union Company did more business.

I am having a REALLY TOUGH TIME BELIEVING THIS. But it was published in Business Week, and they have a better reputation these days than the Wall Street Journal. The Business Week article is HERE. It is hard to believe for a very simple reason, I have been told, since I was old enough to read the newspapers, that unions are bad for business.

But that is not the issue here.

The issue here is should FedEx Continue to enjoy a special status designed to avoid disruptions in rail and air travel or should they play on the same field as their competitors, including UPS and other regional, national and international package delivery companies.

The FedEx Ad Campaign is going to tell you NO…they should be treated the same way the airlines are.

From the Hempstead Consulting Website