Is FedEx Afraid to Take Off Its Training Wheels?
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I came across an interesting piece of news via DenverBrown Blog. Apparently, FedEx is crying about proposed changes to the Railway Labor Act that would level the playing field between them and other shipping companies like UPS. Apparently FedEx considers it a “bailout” for UPS that legislators are considering calling FedEx what it really is: a delivery company.
You see, for years FedEx has been pretending to be an airline. This masquerade has made it easy for them to avoid unionization of the majority of their workforce who have nothing to do with the airline operations.
On the propaganda website they’ve set up to spread their lies and distortions (brownbailout.com), they do a lot of clever things: they persistently refer to themselves as an “airline” and to UPS as a “trucking company.” Both characterizations are less than genuine.
The fact is FedEx and UPS engage in the same basic core business. Both operate substantial airlines to facilitate their core business, which is package delivery. But FedEx wants the world — or at least Congress — to believe that what they do is significantly different from what UPS does. They cry that if the changes to the Railway Act go through, they will no longer be able to offer competitive services.
In other words, FedEx is openly admitting that they’re incapable of doing what UPS has done for years: make a profit with a unionized workforce. They apparently don’t believe their management teams can cope with the same situation UPS has managed for years. I don’t normally hold up UPS management as beacons of unparalleled genius, but apparently the folks at FedEx see them that way.
FedEx claims it can’t run a profitable, efficient business if it has to operate on the same level as other delivery companies. FedEx is claiming that for them to lose that crutch amounts to a bailout for UPS, but what they’re hoping you won’t notice is that their fake status has been bailing them out for years.
Essentially, with their bogus “airline” classification under the Railway Labor Act, FedEx has been riding with training wheels since birth. Asking them to take off the training wheels isn’t a “bailout” to UPS; it’s just common sense — at some point the execs at FedEx need to prove they’re capable of running their business without artificial advantages.
If you want to help FedEx take off the training wheels, use the “Write to Congress” page to let your governmental representatives know the Railway Labor Act revisions need to pass, and that FedEx has to be put on a level playing field with other delivery companies at long last.
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I’m confused. If UPS started as a trucking company in 1900(?) and FedEx Express started as an airline in 1975(?) wouldn’t UPS still be a trucking company? They have added express packages into their ground network and deliver them with their ground drivers. FedEx Express drivers deal directly with the planes, they don’t deliver ground packages, they won’t pickup ground packages, and according to my delivery driver, they are in a different facility that runs on a different network from the express drivers. If you took the planes away from FedEx Express, they would have absolutely 0(zero) packages to deliver. It seems to me as though the airplane network is an important part of their dynamics. The FedEx Ground drivers I am told are NOT classified in the “Railway Act” and can unionize at their discretion. FedEx Ground seems to be the equivalent of UPS and they can already unionize. Help me to understand how UPS thinks that they are identical to FedEx Express. If you took the ground packages away from UPS would they be able to survive on their express freight alone? Again, I’m confused!
They offer the same services, Andrea. That’s why they “think” they are identical. That one of them (Fedex) runs an intentionally disjointed operation to try to fit into a loophole doesn’t make them different, just wasteful.
Fedex’s delivery employees are not airline employees, no matter how much the company tries to segregate the air from the ground business. The Railway Act exemption was intended for actual airlines, not delivery companies that include airline operations.
Both UPS and Fedex own airlines and run legitimate airline operations, but Fedex is trying to pretend that’s the only thing their express business does.
The local Fedex facility in my area is not at an airport, and the majority of its employees (several of whom I know personally) never come into contact with airplanes during the course of their jobs.
Maybe, if Fedex wanted to just fly the packages and have other people do the pickup and delivery for them, then they could rightly claim to be just an airline. But if they want to run a business that’s primarily focused on door to door delivery, the exemption shouldn’t apply.
Andrea,
Mark hit several nails right on the head. What you may not realize is that the UPS air delivery volume is actually more substantial and more profitable (even with a union) than you probably think. Chances are you suffer from a common misconception about the amount of air express business UPS does.
But the bottom line is the airline exemptions were intended for businesses that were primarily airlines.
So maybe the better question (considering your use of hypotheticals) would be whether FedEx could function as a business if you took away all their operations that weren’t directly connected to the actual airline (in other words, no delivery drivers or package handlers whose jobs are mirrored by UPS employees).
I highly doubt it, and if they couldn’t survive just as an airline, then why should they be classified as one?
First of all, FedEx would really like you to believe that no trucking is used in the transportation of express packages. Nothing can be further from the truth. Once packages are picked up they are sent to the assigned airport ramp via truck, then onto the Memphis or Indy hub by plane, then flown back to the ramp, then trucked again to the local FedEx stations for delivery. Then it’s on to individual delivery trucks for drivers to deliver. So as you can see there is much more trucking involved than meets the eye. FedEx comes off as a team of corporate spoiled brats who paid off congress years ago and now are crying because they can’t have their own way. What goes around comes around. Now what if all the ramp agents, drivers and service associates all ask congress for a “special deal?”
It’s about time politics and Fred’s associations in Washington were cast aside so that obvious justice can be afforded.
The admission by Fedex that they would not be able to compete with UPS if Fedex Express drivers unionize is more to gain a measure of sympathy from readers or customers, but when it comes to the perceptions of those on the inside, it shows ,if true, that Fedex managers aren’t worth their salt.
There is also a bit of arrogance involved here as well, for Fred Smith was always and will always be against unions. You would think someone that hates unions that much would be willing to do whatever it takes to make the employees happy, instead of doing the very things that screams union involvement.
[...] I’ve written previously about FedEx’s misclassified workers and the pending legislation in Congress to level the playing field. It’s an amendment to the Railway Labor Act in this year’s FAA reauthorization bill. If you’d like a little more background information on the whole issue, please click here. [...]