But when I saw this, I couldn’t help but weigh in and have some fun with it. It’s called the “Brown Bailout” and essentially it’s another bill that will benefit one company over another and make the general public the victims.
The mammoth business of UPS is looking to cut out its competition, FedEx, by changing the rules. In reality though, it’s only going to drive up the prices of express shipping and hurt the public.
It’s the FAA Reauthorization Act, and under Section 806, it will change the labor jurisdiction of FedEx workers from the Railway Labor Act to the National Labor Relations Act. The effects of this makes changes the way unions can organize on a location-by-location basis.
Essentially, it will force FedEx Express to change its business model and give a big boost to UPS’ ability to edge out its competition.
It’s a bailout – and it’s rotten.
I have put together the following quick animation to show how a potential, simplified conversation between a UPS lobbyist and a member of the senate might go down …
James Spencer can be reached at jspencer@publicceo.com
Note from the editor, after reading comments from readers …
Since it seems that many of you have come to the same conclusion about the ‘bailout’ based on erroneous information, I will clarify. The bill would only change the labor status of FedEx Express; FedEx Ground employees currently operate under the same labor jurisdiction as UPS. It also seems that many of you are not aware that UPS and FedEx Express are fundamentally different companies.
UPS is a 100-year-old trucking company and ships over 85% of its packages by ground. FedEx on the other hand is the world’s largest airline and moves over 85% of its packages by air. Also consider that UPS’ revenues – $50 billion annually – are twice that of FedEx Express.
Changing the labor status of FedEx will not “level the playing field” – it will force the world’s largest airline to conform to labor laws that have never applied to airlines before.
The RLA is in place to ensure that commerce continues immune to any local disputes – protecting the arrival of your critical medicines and other vital packages. The NRLA does not have this luxury, and UPS knows from experience (1997) just how disastrous local strikes can be.
Since their hands are tied by union participation and they can’t compete in the express shipping market with FedEx’s reliability, UPS is merely trying to knock FedEx Express down to their level. If UPS is successful with its maneuver, they will be the only winner here. They will have successfully destroyed the reliability of FedEx Express’ guaranteed overnight shipping, limited their competition and increased shipping rates for the biggest loser in the deal – you and I.
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