UPS slams FedEx-USPS service-sharing plan

By Staff -- Logistics Management, 10/1/2000

United Parcel Service Inc. has come out swinging against the proposed sharing of service between its rival FedEx and the U.S. Postal Service (USPS). The plan, which has not been officially announced but was reported by both The Wall Street Journal and the Associated Press, would allow the federal agency and the private express carrier to begin sharing express and ground deliveries by next spring.

Not so fast, says UPS. "From a public policy standpoint, we don't think it's right for a government-funded service to interfere in private enterprise," Robert Clanin, UPS's chief financial officer, told an audience at the Credit Suisse-First Boston logistics conference in New York City last month. "It's like the [U.S. Department of Agriculture's] partnering with Burger King and excluding McDonald's."

The proposed sharing of services reportedly would have postal workers delivering goods for the "last mile" to consumers and providing residential pickup service for FedEx. Postmaster General William Henderson has publicly speculated that the Postal Service might provide FedEx drop-boxes at post offices and deliver FedEx parcels to post-office boxes.

That has UPS seeing red. "It's not OK for FedEx to have access to post-office boxes," Clanin asserted. "It's not OK to put FedEx drop-boxes on Postal Service property."

For his part, Henderson has said in published interviews that he sees the plan as a way to save the Postal Service some money. The proposed deal with FedEx would not be exclusive, he said. The USPS already has contracts with other private carriers, including Airborne Freight Corp., DHL Worldwide Express Inc., and Emery Worldwide Airlines.

Any agreement between FedEx and the USPS is far from a done deal. FedEx spokesman Steve Barber told Logistics Management, "Any agreement we might reach with the USPS would be in the best interest of consumers. FedEx has a long history of working to break down barriers to competition to improve services for customers and the public. We continue to talk with the Postal Service about a broad range of areas for strategic cooperation, but a lot of work needs to be done between now and a final deal."