Monday, May 3, 2010

Package Giants Slugging It Out

UPS and FedEx battle in Congress over provision in FAA re-authorization bill

You know something is going on when UPS and the Teamsters are on the same side in a fight.

On the other side of the dispute is FedEx, making a lot of noise about “bailouts” and “special interest” legislation. FedEx has spent $21 million lobbying against a provision working its way through Congress that would reclassify FedEx truck drivers as non-airline employees, opening the door for the Teamsters to organize them, and ending a competitive advantage FedEx enjoys over rival UPS.

“It really boils down to this: When you receive a delivery from a FedEx driver, it’s not a pilot, it’s a driver,” said Ken Hall, director of the Teamsters’ delivery-truck drivers unit.

“This legislation was written by UPS, for UPS, and benefits only UPS,” countered Maury Lane, Fedex’ director of corporate communications. Their aversion to special-interest bailouts depends on the situation; the current law protecting FedEx from the unions was slipped into a must-pass aviation bill in 1996.

Brown has not been shy about spreading around the green, either – together with the Teamsters, UPS has put over $11 million into lobbying efforts, and delivered another $3 million in campaign contributions.

All those dollars funneled to Washington, of course, are your money, if you are a small package shipper. The most FedEx and UPS customers can hope for is that the two giants keep each other honest to some degree. The U.S. parcel delivery market, ever since DHL exited it, has been a “duopoly,” and the only thing worse than a duopoly is…a monopoly.

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