Christopher Hinton, writing in the Wall Street Journal last week, affirmed the fact that a loophole in the nation’s labor laws tilts the express package delivery market in FedEx’s favor.
“Last month, the House of Representatives passed a bill that would put FedEx express-shipping drivers, sorters, loaders and others under the National Labor Relations Act, while keeping pilots and airplane mechanics under the Railway Labor Act,” Hinton wrote. “(FedEx) Chairman and Chief Executive Frederick Smith was so incensed by the potential change in law, which would take away a significant advantage (emphasis ours) over rival United Parcel Service Inc., that he reportedly threatened to halt delivery of new Boeing jets to make up for the extra costs.”
Two points:
1.) As the Wall Street Journal article notes, FedEx currently enjoys a “significant advantage” over UPS and other express delivery carriers because of a loophole in the law that treats FedEx Express drivers differently from every other driver in the nation.
2.) This “significant advantage” – not from market factors, but an inequity in federal law – is so valuable to FedEx that its chairman essentially issued Congress nothing short of an economic threat if it rights this wrong.
Two questions:
1.) Will 98 senators allow FedEx to keep this “significant advantage” over its competitors simply because of a filibuster by two protectionist senators from the company’s home state?
2.) Can the Senate really be pressured into doing the bidding of one major company at the expense of others by issuing an economic ultimatum?
If so, this is a very troubling precedent. It means any major corporation can potentially use Congress as a weapon against its competitors which puts Congress in the position of picking winners and losers in the free market. Will the Senate next pass a law which gives Target a “significant advantage” over Wal-Mart if Target threatens not to open any new stores?
It’s never too late to do the right thing. We continue to urge the Senate to eliminate the FedEx loophole.