FedEx May Cancel Jet Orders

The Journal reported that a FedEx spokesman said the company may cancel plans to purchase the planes, valued at nearly $8 billion, if Congress passes a bill that would remove certain employees at FedEx from the jurisdiction of the federal Railway Labor Act of 1926, the law that today also governs labor organizations at airlines.

Congress is currently debating a bill that would move FedEx to the jurisdiction of the National Labor Relations Board, an organization that generally covers trucking companies.

FedEx was formed as an airline and thus is able to enjoy the benefits of the RLA, which has provisions that complicate union organizing.  This is seen as a key advantage over rival UPS (UPS 47.24) which was formed as a trucking company and is governed by the National Labor Relations Act, which allows for easier union organization.

Opportunities for Anticompetitive Behavior in Postal Services

In the United States, the delivery monopoly is over letter mail. The Private Express Statutes prohibit the private carriage of "letters or packets," and the Postal Service defines a letter as "a message directed to a specific person or address and recorded in or on a tangible object." The courts have accepted the Postal Service's broad test for a letter as, "the presence or absence of an address."

The USPS's definition of a letter, adopted by the Postal Service in 1974, differs from earlier definitions and is much more expansive. Indeed, the Post Office and then the Postal Service has consistently expanded the scope of its monopoly over a 200-year period. Such an expansive definition leads naturally to monopolization of materials not intuitively considered letters, such as bills and advertising matter, which constitute a substantial and increasing proportion of the mail stream. According to the Postal Service's definition, an addressed grocery store advertisement is a letter.

A substantial portion of USPS revenue comes from monopolized activities. In 2002, 57 percent of the Postal Service's revenues were from monopolized first-class mail, while almost 25 percent were from partially monopolized Standard Mail A (formerly third-class mail).

The monopoly is well enforced. The USPS can conduct searches and seizures if it suspects citizens of contravening its monopoly. For example, in 1993, armed postal inspectors entered the headquarters of Equifax Inc. in Atlanta. The postal inspectors demanded to know if all the mail sent by Equifax through Federal Express was indeed "extremely urgent," as mandated by the Postal Service's criteria for suspension of the Private Express Statutes. Equifax paid the Postal Service a fine of $30,000. The Postal Service reportedly collected $521,000 for similar fines from twenty-one mailers between 1991 and 1994.

AEI - Short Publications - Opportunities for Anticompetitive Behavior in Postal Services


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