September 29, 2009 09:25 AM UTC

FedEx, UPS and Rural Colorado

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• by: ColoradoMountainGuy

I’m writing here today because I recently learned of an attempt by UPS to sneak a provision into H.R. 915, the FAA Reauthorization Act of 2009, designed mainly to hurt their main competitor – FedEx. UPS claims that they’re just trying to level the playing field, when the truth is that the two shipping companies operate in very different ways and putting them under the same regulatory scheme would only hurt FedEx and help UPS.

This provision buried deep in H.R. 915 would change how FedEx Express is regulated. Currently, FedEx Express operates under the Railway Labor Act (RLA) which was designed to ensure that vital services (such as the country’s rail and air transit systems) would be able to continue running uninterrupted, even while labor disputes were being settled. FedEx Express, which functions primarily an express air courier, falls under the jurisdiction of this act. As a whole, FedEx operates as four distinct units: FedEx Office, FedEx Ground, FedEx Corporation and FedEx Express. FedEx Express is the only unit of FedEx that operates under the RLA. The other three units, which are more analogous to the operations of UPS, operate under the National Labor Rights Act (NLRA); the same act that regulates UPS operations.

While operating under these two different sets of labor acts, these two companies have been able to carve out two distinct business models, offering different types of services to their clientele. FedEx Express operates as an express courier, and their ability to function as such depends on their ability to promise uninterrupted, timely service to all parts of the country.

In my own experience, my gravest concern over this possible labor law change would be how it affects the rural parts of this country. Colorado, of course, is comprised largely of rural areas and I myself am fortunate enough to live in one of those areas. Because of where I live, I’ve been able to see firsthand the kind of problems that will arise for my – and many other folks’ – part of the state.

In my own experience, I’ve had to deal with express courier services that attempted to replicate FedEx’s delivery times but without the benefit of being run under the RLA. In my rural area, service was infrequent and typically poor. In my own experience with FedEx, which because of the regulatory system it follows has been able to develop a much more robust presence in rural parts of our state, deliveries are able to arrive daily and at the specific times I’ve contracted FedEx to deliver a package by.

For myself, this kind of precision isn’t usually critical, but for rural hospitals and clinics, not mention time sensitive professions like law firms, being able to have a reliable express shipping company can mean the difference between getting critical documents, supplies and medicine on the day they’re needed or having to wait until the next delivery stops by a couple days later.

Now, I’m a strong supporter of worker rights and I wanted to make sure that the RLA actually provided the appropriate avenues for workers to redress their grievances and concerns. Sure enough, after doing a little looking, I found that FedEx is consistently ranked one of the best companies to work for in the United States (Source). So, the issue really comes down to whether we want to support our rural areas or whether they’re expendable in favor of UPS winning a feud with a rival.

For anyone interested in learning more or letting our congressmen know that it’s important to support the needs of rural Colorado too, you can visit: http://www.brownbailout.com/ to get more information and learn what you can do to act.

LATEST UPDATE – On 9/23, Congress voted to grant a 90 day extension on FAA funding. The extension did not include UPS’ anti-competitive language, but UPS is still seeking to legislative changes when the FAA extension expires in a few months time. If you’re interested in this issue, please visit the website previously mentioned, http://www.brownbailout.com/