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Parcel shipping: FAA reauthorization gets 1-month extension

House’s version of FAA Reauthorization contains a labor-related provision which has served as a bone of contention between parcel industry heavyweights FedEx and UPS
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By Jeff Berman, Group News Editor
June 30, 2010

The House of Representatives yesterday voted to extend funding and taxing authority for the Federal Aviation Administration until August 1. Funding was set to expire on July 3.

As LM has previously reported, the House’s version of FAA Reauthorization contains a labor-related provision which has served as a bone of contention between parcel industry heavyweights FedEx and UPS.

The main issue between the outfits is based on a measure in the House version which calls for “express carrier employee protection” and 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. And as LM has previously reported, if this bill is signed into law, many industry experts contend that it will make it less challenging for the Teamsters Union to organize FedEx Express workers.

In the House version, an amendment-which was included by Representative James L. Oberstar (D-Minn.)-would 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 does not include this amendment.

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

And it 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.

A May Bloomberg report noted that a change in labor status for FedEx Express would give unions the power to call job actions within a city or region and create a negative ripple effect across its entire network, which could trigger a $5 billion “hidden package tax” on shippers and consumers to implement costly contingency plans to deal with local work stoppages that could jeopardize the reliability of delivery operations worldwide.

“With today’s vote for yet another extension on the FAA Reauthorization Act, Transportation and Infrastructure Committee Chairman James Oberstar has once again allowed special-interest provisions benefiting UPS and labor to block legislation that funds the FAA and makes air travel safer,” said Maury Lane, FedEx Director of Communications, in a statement. “The U.S. Senate made it clear months ago that it is ready to act in the nation’s interests. But the House, following the direction of Rep. Oberstar, continues to turn a deaf ear to public pleas for safer air travel.”

In a recent interview with LM, Lane said that this bill could be in legislative quicksand and added that it is unclear why Oberstar continues to push so hard for this amendment, saying it creates an unlevel playing field for FedEx and its ability to compete in the marketplace fairly.

UPS spokesman Norman Black said in an interview that is not the case, explaining that drivers at every transportation company in America—except one—are covered by the same law.

“The only drivers who are improperly exempted from that law are the drivers at FedEx,” said Black. “And the idea that there is any difference between a FedEx driver and a UPS driver is just silly. There is no justification for treating them differently and the House of Representatives twice in the last three years has decided that it wanted to eliminate that disparity. So far FedEx’ lobbying in the Senate has delayed passage of this bill and has prevented Congress from addressing the inequality that exists today. If UPS and FedEx go to market in the same way—we each have an airline, and our pilots are covered properly by the RLA, our drivers for some reason continue to be treated differently.”

House Transportation and Infrastructure Committee spokesman Jim Berard told LM that this amendment is a matter of fairness, explaining that a truck driver from UPS is treated one way under the law and a driver from UPS is treated another way under the law.

“Mr. Oberstar feels that people doing the same work should be treated equally under national labor laws and so therefore he wants to remove the special exemption that FedEx has for its drivers and put them under the same laws as UPS or anybody else engaged in this kind of business,” said Berard.

And Senate Commerce Committee Chairman Senator Jay Rockefeller (D-WV) made it clear he does not support changing the labor status of FedEx employees, which could also make it more difficult for the Teamsters to organize FedEx.

“I have said very clearly that I believe FedEx workers should have the same right to organize as UPS workers do,” Rockefeller said in a statement. “At the time the Senate took up the FAA bill, it appeared this provision could not pass. But the effort goes on and I am continuing to work with Democratic leadership to secure a strong vote on this issue.”

In a Wall Street Journal report, Rockefeller said that he favors the House amendment but knows that it won’t get the Senate votes needed for passage.

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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