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  1. #1
    Atomic Punk lovemachine97(Version 2)'s Avatar
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    10.21.16 @ 10:44 AM
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    Default UPS vs. FedEX: Using Unions as Weapons...

    The short short version:

    Using Unions As Weapons
    UPS and FedEx face off in Congress instead of the marketplace.

    Veronique de Rugy

    Imagine two competing pizza delivery companies that are identical in every way except their delivery methods. Pizza Company A delivers its pizza by car and Pizza Company B delivers its pizza by bike.

    Now imagine that the government has completely different labor laws for pizza parlors with cars and pizza parlors with bicycles. The result is much larger labor costs for Company B than Company A. Is that fair? Should the government care?

    A similar situation underlies a vicious fight between United Parcel Service (UPS) and its main private competitor in the delivery business, FedEx, over archaic labor rules that classify the companies based on their favored forms of transportation. Because 85 percent of FedEx deliveries go by air and 85 percent of UPS deliveries go by truck, the two companies are obliged to obey different labor laws.

    FedEx Express, the company’s air delivery service, operates under the Railway Labor Act (RLA), instituted in 1926 to arbitrate labor disputes in industries (including, by 1936, airlines) that are deemed vital to interstate commerce. Under this law, in order to be recognized, a union must receive a majority of votes from all a company’s employees, rather than merely a majority of those who choose to vote. That makes it much more difficult for labor to organize. As a result, FedEx Express, and therefore FedEx, have been mostly union-free for decades.

    UPS, by contrast, operates under the 1935 National Labor Relations Act (NLRA, commonly known as the Wagner Act). This Depression-era law allows unionization at each individualoffice of a national company, thereby significantly lowering the barriers to labor organizing. As a result, UPS is one of the largest unionized companies in the country. (Like UPS, the FedEx Ground and FedEx Freight divisions of FedEx are covered by the NLRA.)

    This legal distinction has had a significant impact on the two competitors’ labor costs. Average compensation and benefit cost per employee at UPS is more than double that at FedEx—$74,413 vs. $29,310. (See table.). . .

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  2. #2
    Baluchitherium loveevhsince79's Avatar
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    10.23.15 @ 03:49 PM
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    Interesting numbers, UPS pays their employees better pay and benefits and has a higher percentage of net income while Fedex spends more money on lobbying. I guess that the higher wages and benefits can be paid if a company is managed well.
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