Spokane7
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September 1, 2009 in Opinion
Editorial: Government meddling isn’t healthy for business
When skeptics start beating up on President Barack Obama’s health care ideas because the so-called public option would put private enterprise at a disadvantage, he is quick to point out United Parcel Service’s success at wresting parcel-handling business from the U.S. Postal Service.
He needs a better analogy.
At least he should check in with the folks at UPS’ much smaller private-sector competitor, FedEx, which has been claiming loudly of late that UPS has turned to Congress and its federal authority to put FedEx at a disadvantage.
That is, UPS and the Teamsters union successfully lobbied the House of Representatives on behalf of a measure that would require FedEx’s labor relations to be governed under the National Labor Relations Act instead of the Railway Labor Act. That would overturn a decades-old federal policy while threatening the reliability on which FedEx has built a favorable reputation with its customers.
The Senate hasn’t followed suit, but the two bodies are expected to reconcile their differences before the end of this month. That’s the deadline for the Federal Aviation Administration’s reauthorization bill, which contains the provision in question.
The heart of the issue is this: Under the NLRA, labor organizing can take place locally, but under the Railway Labor Act, it has to be at the nationwide level. That’s because Congress wanted a safeguard against local strikes disrupting an entire national transportation network such as a railroad, or later an airline.
As a company, FedEx is broken up into various sectors, most of which fall under the NLRA already. But the overnight express parcel service falls under the Railway Labor Act, because it is considered an airline. It was established as an airline, and the 9th U.S. Circuit Court of Appeals has affirmed in a California case that it is an airline that uses trucks for local movement of cargo at the departure and termination points of its flights.
But if trouble flares up at just one of those points – Spokane, Seattle, Oakland, Calif., or anywhere else in the country – shipments can be stymied potentially anywhere, and the reliability that shippers demand disappears.
To suddenly face that risk would derail FedEx’s competitive stance, even though the rationale behind the Railway Labor Act is as valid today as it ever was.
UPS and FedEx are both vigorously competitive and innovative businesses and should be allowed to thrive or fail in a free-market environment. Congress shouldn’t be trying to choose the winners. That’s the consumers’ job.
Tuition attack is wrong 
WSU Text-to-Win Contest 
EWU Text-to-Win Contest 
Enter to win tickets to see Adam Carolla at the Knitting Factory 
liarsinnews on September 01 at 5:21 a.m.
Have you ever noticed with the US Postal service, junk mail is never mentioned. It boils down to corporate welfare letting large corporations mail ads for a few cents.
Ninch on September 01 at 9:10 a.m.
Good that this is now an editorial that many may read.
Unions are pushing Congress to make their competitors LESS COMPETITIVE (includes UPS Teamsters and USPS unions as well as UAW). One would think instead that unions would work with employers to improve their services and increase profits instead of setting up scenarios where costs are increased at the same time services are reduced (e.g. USPS).
Unions serve a legitimate purpose but lobbying Congress for special privileges (GM and Chrysler bailouts) or to punish the competition is way out of boundaries.
Gary D Rhodes on September 01 at 10:20 a.m.
The workforce at UPS seems happy enough. They have a very good contract.
But the bottom line is this, UPS, zero NASCAR wins, FedX, one.
No, the bottom line is; the US postal service could go out of business tomorrow and not be missed.
The private carriers are prohibited from carrying first class mail, thus propping up the postal service.
End this prohibition.
And go David Ragan!
RufusDot on September 01 at 11:51 a.m.
Where were you 10 years ago when FedEx lobbied to add the exemption to the FFA bill at the time? Dig a little deeper next time. UPS doesn’t want the government to meddle in business either, they want to have the consumer decide as well. But, with a government mandated exemption for FedEx, the “business” playing field isn’t the same. UPS and FedEx compete for the same packages, using identical services carried on the same type of system of airplanes, ground tractor trailers and delivery trucks. Why are the rules different? Because Fred Smith has lobbied long and hard for those differences.
And, you must have read FedEx’s press release about the possible “dangers” of packages getting delayed. Won’t happen and anyone who knows the business knows they’re just blowing smoke. Again, simply reading a press release is poor journalism.
chickenhead on September 03 at 9:51 a.m.
When UPS failed to get their whole operation listed under rla they wish to push the cause in their direction.
Just a few independant actual facts no poor journalism here:
The Journal of Commerce: Regulatory Watch
“UPS refers to the apparent uneven playing field created from having portions of the UPS operation governed under NLRA and RLA on its Web site, where an illustration shows two companies performing the same type of home delivery but with different labor laws governing the three major components of the network. It highlights the problem Congress has created by having different laws based on the mode of transportation. Uninterrupted flow of commerce is not practical with different components of the network governed under different labor laws.
UPS supports an effort in Congress that would change the legal coverage for FedEx Express’ pickup and delivery operations to have that covered under the RLA. But what Congress should do to level the playing field is replace the RLA with a broader Transportation Labor Act that would reflect the current dynamics of the transportation sector.”
– Satish Jindel, “Clarifying Labor: RLA Should Be TLA,” The Journal of Commerce
Read entire piece
Buckeye Institute for Public Policy Solutions
“This dispute between UPS and FedEx is only the latest in a long line of incidents where one company tries to give itself a competitive advantage not through serving customers better but through manipulating the political landscape to hurt its rivals.”
– Marc Kilmer, “You Can’t Change the Game by Changing the Players,” Buckeye Institute
Heres ome more facts:
Remember that 85 percent of FedEx Express packages travel by plane, while 85 percent of UPS packages travel only by truck.
We believe that all UPS operations, including ground operations, are now probably subject to the Railway Labor Act because the ground operations are part of the air service.”
- UPS, 1993
“Throughout my over 25 years with the NMB it always was clear to the agency’s professional staff that FedEx appropriately was covered by the RLA due to its closely integrated operations with the company’s air transport activities. UPS … does not have this type of functional integration.”
- Ronald Etters, retired General Counsel, National Mediation Board