Rent Seeking 101

There has been a lot of discussion about the proposal to allow unions to organize workplaces through signature campaigns. Getting much less notice is legislation that would make it easier for unions to organize FedEx. FedEx is currently covered by the Railway Labor Act which dictates that any union representation election would have to be nationwide. Last month the US House of Representatives approved a bill that is worded in such a way that union elections at FedEx would be governed by the National Labor Relations Act. NLRA allows for local elections, which could mean that FedEx drivers or package handlers in any city could unionize on their own. FedEx fears that this would allow unions to cherry pick a few key locations and thereby gain leverage over the entire FedEx network.

There are two key players pushing the legislation: unions representing transportation workers and FedEx's main rival UPS. FedEx and UPS execs have been working the halls of Capitol Hill to make their case. FedEx has threatened to cancel an order with Boeing worth billions of dollars, creating a split in the union movement on the merits of the House bill. More union jobs at FedEx would mean fewer union jobs in already-unionized Boeing. Then we have the spectacle, described in yesterday's WSJ, of the American Conservative Union (a so-called think tank) offering to write op-eds in support of FedEx if in return FedEx would donate funds to support ACU "grass roots efforts." When FedEx decided not to accept ACU's proposition, ACU sent out a letter denouncing FedEx's rhetoric -- FedEx has called the bill a UPS "bailout."

Just another day at the office in Washington, DC. My advice to FedEx customers: try to lock in today's shipping rates for as long as they will let you.