House Provision Could Cost FedEx Millions, Stall Deliveries

FedEx will unveil a PR effort to fight unionization legislation favored by bigger rival UPS.

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By Paul Bedard, Washington Whispers

Federal Express is preparing to launch a multimillion dollar public-affairs campaign to derail House-passed legislation that would put the airline-based freight company under labor rules governing United Parcel Service, FedEx's trucking-based competitor. Worried that its costs could surge and overnight deliveries could be stalled by wildcat strikes if the changes are put into place, FedEx on Tuesday is expected to lay out a multimedia campaign using the Internet, TV, and paid advertising.

At issue is a provision in the Federal Aviation Administration reauthorization bill that would make it easier for FedEx drivers to be organized by the Teamsters. The House OK'd the bill largely on party lines. Its fate in the Senate is in doubt. In the past, FedEx has killed the provision that would remove the company's drivers from the Railway Labor Act's jurisdiction, which requires companywide labor-organizing votes, and put them under the National Labor Relations Act, which lets unions organize on a location-by-location basis. FedEx argues that the RLA is more appropriate because the company is jet based, and Congress in the past has worried about letting strikes impact aviation-based commerce—especially critical today when internationally traded products and medical supplies and even body parts travel on overnight flights.

FedEx is less than half the size of UPS and delivers much of its goods by air. Much of UPS's goods go out by truck. FedEx has called the legislation a bailout for the larger company.

UPS, however, argues that it's only fair for both companies to operate under the same rules. And the Teamsters, who have long tried to organize FedEx drivers, agree. FedEx retorts that its workers are happy and don't want union intervention.

The campaign to stop the legislation from winning Senate approval will not target just wavering lawmakers. It's to be national in scope to also target customers and explain the difference in how each company is run. Unclear is whether it will also pick up on some FedEx charges that the provision is a bone to UPS and labor unions by Democrats in Congress. Also unclear is the impact of the company's threat to cancel its order for 30 Boeing 777 freighters if the Senate OK's the legislation.

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