The UPS bailout

There is a fight at full boil in Washington DC over a loophole in a law that allows FedEx to operate without interference from such issues as labor unions and labor concerns. I am just now becoming aware of this issue as it has not drawn much attention from the AP which seems to be the only news source on the web. CNN, MSNBC, and many others post AP stories directly or a rewrite of them in some form.

The fight, as I understand it, boils down to this. UPS is a company that must operate under the National Labor Relations Act. Under this act, it is less difficult for employees to unionize and demand acceptable standards of pay and benefits. FedEx on the other hand operates under the Railroad Labor Act, which makes it much more difficult to unionize and when they can unionize, the unions have few if any teeth they can use for bargaining.

The fight on the UPS/Teamsters side of the issue is that both companies are essentially the same. Both have trucks that pick up packages at businesses and deliver them anywhere in their network, again by truck, for a fee. UPS has a fleet of planes that they use for expedited shipping of packages. FedEx has a fleet of planes that they use for expedited shipping of packages. Both will ship ground.

FedEx on the other hand states that it ships 85% of its packages via air while UPS ships 85% of its packages via ground. Further FedEx states that this law will stifle competition. By keeping the FedEx employees under the more restrictive Railroad Labor Act, it makes it easier for companies to be competitive.

I went to both sites for a comparison of shipping times. I entered into both UPS and FEDEX shipping calculators the following information:

• 1 package with a weight of 5 pounds
• the origination zip code of 33612
• the termination zip code of 11530
• checked the option box for residential delivery

Here is what I found out. Both companies cheapest option takes 3 days. I did not look at the price as that would tell me nothing as far as how things were delivered. What I did notice is that FedEx calls this option, Home Delivery and UPS is a bit more honest simply calling it UPS Ground. 3 days for each, is FedEx doing something in their process that UPS isn't wherein they use planes or trains to move this stuff?

Here's the rub. FedEx says that if they are forced to work under the National Labor Relations Act, this would put the shipping industry into very grave danger because a strike would cripple the industry world wide. Lets look at that, shall we.

According to UPS, there are 45 other parcel delivery options available to customers if you don't include FedEx and UPS. I will only examine 1, the United States Postal Service. When the Teamsters union walked out at UPS a few years back, did the mail stop running? UPS openly stated that the walkout cost them market share. Did they earn it back, I don't know, but they are still running a company that is still number one in the business. If FedEx was shut down by a strike, would the parcel delivery system just stop. Would UPS be put into jeopardy because of it.

Having its own fleet of planes, UPS does not rely heavily, if at all, on FedEx to move UPS packages overnight from NYC to LA. The USPS also has overnight options for letters and small packages, so if all else fails, they can do what USP and FedEx wouldn't be able to in an almost impossible to happen simultaneous strike.

With the advent of fax and e-mail, how much business did everybody loose because we can now send a text document from Keokuk Ia. to Auckland NZ. electronically? I didn't see FedEx or UPS put up a stink about that.

My point is this. They are both working the same businesses as seen by the consumer. Both offer essentially the same services to the consumer. Both have 8 shipping options with 1 difference between the 2. FedEx offers a same day delivery option and UPS will get it there the next day by 9am. If FedEx went away for good, would the shipping business be in such trouble that UPS and the Postal Service would just fold up? Why should FedEx be allowed to operate under a different set of rules then UPS. I've never been a fan of unions having worked in one and seen that it does nothing for its employees. A comment on the internet under a commentary article about this issue stated we shouldn't need unions, but business has a habit of treating its employees very poorly. Now is a time when I've never in my 50+ years seen such bad behavior by employers and poor treatment of employees on such a grand scale. I'm changing my take on unions in general.

Finally, FedEx is saying that because it can't improve performance, UPS is looking to cripple the competition with unique laws aimed expressly at FedEx. If you call UPS and state that you need late delivery to a residence, they will do their best to oblige. FedEx on the other hand will be happy to tell you tough luck. Who has the better customer service? By the way, that is my personal experience after receiving several packages from both.