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House T&I Committee signs off on FAA reauthorization

By Jeff Berman, Group News Editor
February 18, 2011

Following the introduction of the FAA Reauthorization and Reform Act of 2011, H.R. 658 by the leadership of the House Transportation and Infrastructure Committee last week, the bill was approved by the committee this week by a 34-25 margin.

Since the previous FAA authorization expired in 2007, it has been kept afloat by a series of 17 extensions, also known as continuing resolutions.

The four-year bill, which covers fiscal years 2011 to 2014 with an overall funding level of $59.7 billion is comprised of various measures, including:
-providing approximately $4 billion in savings compared to current funding levels;
- streamlines processes and provides funding for priority NextGen air traffic control modernization projects planned in the next four years and sets deadlines and metrics for better measurement of NextGen progress and to ensure more effective cost management; and includes binding arbitration for air traffic controllers and other FAA employees to resolve labor impasses.

As LM has reported, absent from the bill is a labor-related provision which has served as a bone of contention between parcel industry heavyweights FedEx and UPS.

In previous versions of this legislation, a measure in the House version which called for “express carrier employee protection” which has the potential to change the labor status for FedEx Express employees—except for pilots and aircraft maintenance workers— from Railway Labor Act (RLA) to the National Labor Relations Act, which applies to UPS employees. If this bill with this provision were to be signed into law, many industry experts said that it would have made it less challenging for the Teamsters Union to organize FedEx Express workers.

An amendment in previous versions introduced by Former House T&I Committee Chairman James L. Oberstar-aimed to amend the RLA to clarify that employees of an “express carrier” shall only be covered by the RLA if they are employed in a position that is eligible for certification under FAA’s rules such as mechanics or pilots, and they are actually performing that type of work for the express carrier. It added that all other express carriers would be governed by the NLRA. The Senate version of this bill in the previous Congress did not include this amendment.

Since this amendment was first introduced, FedEx has steadily maintained that this amendment is essentially a bailout for UPS.

In literature for its campaign entitled BrownBailout.com, FedEx says that this amendment would force FedEx Express to operate under a law not designed for airlines and express companies. FedEx has previously defended its position by explaining that UPS and FedEx are “fundamentally different companies,” with UPS shipping 85 percent of its parcels on the ground, and FedEx primarily functioning as an airline, flying 85 percent of its packages in the air.

And in comments provided to LM by FedEx late last year, the company said:
“We hope the new Congress will act quickly to develop and pass a new bill, without the anti-competitive bailout provision that benefits only UPS, and has nothing to do with the bill’s main purpose. It was clear from the election that voters are tired of backroom deals that put corporate interests ahead of the public good. Americans deserve the benefits of important air safety improvements and next generation navigation systems, as well as the thousands of jobs that will be created by improving airport infrastructure.”

Even before this week’s vote, it was widely understood that the labor provision would not garner the required support to be included in the bill, according to Jerry Hempstead, president of Hempstead Consulting. This became clearer, he said, when the House Republicans became the majority after the mid-term elections.

“The opportunity to organize FedEx is and will remain to be the Holy Grail for the Teamsters,” said Hempstead. “FedEx Express has a couple of hundred thousand employees in which this provision applies to. In order for those drivers to get organized, they would have to get more than 50 percent of all drivers nationwide to go union. The Teamsters don’t have the ability to organize the whole country, and the legislation would allow them to organize a few large terminals like New York or Chicago, where there is tremendous sympathy for collective bargaining. Once you have some major markets organized, you can go to other terminals and create a domino effect. The current set-up is a barrier to entry for organized labor to bring collective bargaining to FedEx drivers.”

Hempstead said the “Brown Bailout” campaign by FedEx was essentially a move to level the playing field so that both FedEx and UPS could compete on the same level, even though as things currently stand he explained FedEx as a unique advantage, with more work rule flexibility and lower labor costs than UPS has.

What’s more, an article published today by Dow Jones Newswires quoted UPS spokesman Norman Black as saying the current Congress “doesn’t appear disposed to addressing this,” acknowledging little chance of success at least for the next two years.

Black also said that UPS has stopped its lobbying effort around the pending FAA reauthorization because the company no longer expects Congress to use a new version of the FAA bill as a means of enacting the labor clause. And he said that UPS will “continue exploring other avenues to address the [labor] issue.” He said the company is still lobbying Congress on it in terms of “educating members and looking for other legislative vehicles” to advance it.

For more articles on air cargo, please click here.

About the Author

Jeff Berman headshot
Jeff Berman
Group News Editor

Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. .(JavaScript must be enabled to view this email address).


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Article Topics

News · Air Freight · Air Cargo · UPS · FedEx · All topics

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