FedEx Background

FedEx invented the overnight shipping business in the United States. It was the brainchild of its founder Frederick W. Smith, who remains its board chairman and CEO nearly fifty years later. After leaving Yale, he completed two tours in Vietnam for the Marine Corps, where he was trained not as a pilot but with pilots to coordinate ground action. Smith flew over 200 missions in which he “observed military procurement and delivery procedures carefully,” according to one profile, “with an eye toward someday realizing his dream of a vast network dedicated to overnight delivery.” This was not the first nor the last time that military logistics impacted civilian business, and visa-versa.

In 1971, he founded Federal Express Corporation, later shortened to FedEx. Business writers Mike Brewster and Frederick Dalzell saw that both Federal Express and UPS had revolutionized the package delivery industry:

By the early 1980s, FedEx had revolutionized the airfreight business and established itself as the leading overnight delivery provider. What UPS had done for ground-based consolidated delivering in the 1920s and 1930s. FedEx did for next day air operations in the 1970s and early 1980s.

From the 1980s onward, the intense competition between FedEx and UPS would reshape the industry and the structure and services of both companies. Their fates became intertwined.

Many people still think of FedEx primarily as an overnight delivery service, with its white courier vans that dot the business districts of major cities across the United States. But FedEx has morphed into much more than that since its founding, with subsidiaries that include FedEx Office, Express, Ground, Freight, Supply Chain, Custom Critical, and Trade Networks Services.

It flies to 220 countries each day. Its gross revenue in 2018 was over $65 billion, with over $4 billion in profits. Today, FedEx employs over 425,000 workers across the globe with its headquarters in Memphis, Tennessee, also the location of its vast “Superhub.”

FedEx was a child of the neoliberal era and the logistics revolution that have reshaped the global capitalist economy over the past four decades. Unlike older letter and package delivery or freights companies that had to adjust to the new do-or-die world that followed the deregulation of the aviation and trucking industries in the late 1970s, FedEx was tech savvy — far more so than UPS, USPS, or DHL. While other companies were still working off of paper, FedEx used the latest computer technology and barcodes to track packages.

It also pioneered television advertising for the shipping industry with television commercials in the late 1970s that were both memorable — “When it absolutely, positively has to be there overnight” — and hilarious. FedEx had a glamorous image in its early days, with sleek jets crisscrossing around the country compared with the boring brown ground delivery trucks of UPS. Even the early uniforms of FedEx driver were to give the impression of “pilots on the ground.” In 1988, Fred Smith mocked UPS’s stodgy image and business strategy in the Wall Street Journal: “UPS is like — I don’t mean this disrespectfully — the Politburo. And with those zillion brown trucks, like the Russian Army.”

But UPS’s slow response to FedEx didn’t last. With huge concessions granted to UPS in the 1980s by the Teamsters — creating, among other things, a permanent two-tier wage structure for part-timers in the traditional ground package handlers and sorters in their ground operations and later in its air division — UPS took on FedEx. An industry-wide wrestling match followed, called the “Package Wars” by the business media.

While each tried to get the upper hand, FedEx and UPS began to mirror one another in structure and services. FedEx got into the ground package delivery business in the late 1990s with its purchase of Roadway Package Service (RPS), which was conceived as a low-cost home delivery competitor to UPS. It became FedEx Ground. With its purchase of American Freightways and Viking, FedEx moved into the freight industry.

The vertical integration of both companies was completed in the first decade of the twenty-first century with the purchase of retail storefronts. FedEx bought Kinko’s, later rebranded FedEx Office, that exclusively handled FedEx shipping.

FedEx and Unions

FedEx has been very clever through the years manipulating federal laws to thwart unionization efforts and keeping its various division separate from one another. It has largely, but not always, succeeded. Because it started out as an airline, FedEx pilots was are covered by the employer-friendly national Railway Labor Act. Despite this, FedEx’s nearly five thousand pilots are the company’s only unionized workers. FedEx’s remaining massive workforce is non-union, in sharp contrast to the 280,000 workers represented by the Teamsters at UPS.

In 2005, James P. Hoffa, the general president of the Teamsters, broke from the AFL-CIO to join a new labor federation called Change to Win. He promised more organizing. “What was to be done at the AFL-CIO is not working,” Hoffa said. “We’re going to do something new.”

With over 15,000 drivers at FedEx Ground in 2006, who deliver packages to homes and businesses, Hoffa, declared “FedEx [Ground] is an important target for us.” Many Teamsters efforts were at small regional centers where the FedEx management had the upper hand and fired dozens of union supporters. Hoffa complained that FedEx Ground was using “anti-union tactics that come out of the 1930s.”

In Brockton, Massachusetts, in 2011, union supporters signed up 75 percent of the package handlers at the FedEx Ground center there and seemed headed for a victory. At the last moment, the Teamsters called off the election. Why? Members of Socialist Alternative, a small socialist group whose most prominent public figure currently is Kshama Sawant, a Seattle City Council member, were playing a leading role in the organizing drive. One key organizer of the failed drive in Brockton told me he thought that the anti-communism of the Teamsters was a motivating factor for the union to call off the election.

Teamsters efforts at FedEx Freight, despite resolutions passed at several Teamster conventions, have been more even more frustrating. As USA Today reported in October 2017:

FedEx Freight said Friday the National Labor Relations Board revoked union certification for drivers at a Monmouth Junction, New Jersey facility after Teamsters Local 701 disclaimed interest in representing the drivers. The company said the revocation comes after drivers at other facilities in Croydon, Pennsylvania and Charlotte, North Carolina voted the union out.

Over the last decade and a half, instead of doing “something new,” the Teamsters have continued an old and familiar pattern of failure at FedEx Freight or FedEx Ground, similar to their failed campaign at the rising freight giant XPO. The major flaw at the heart of all of these failed campaigns is trying organize one location at a time at these logistics behemoths rather than pursuing a national organizing strategy.

FedEx Deaths On the Job

In 2018, FedEx was listed as one of the best places to work by Fortune. It has made the list thirteen out of the last twenty-one years. Yet a series of workplace deaths says something about how dangerous a place it is to work, and how little FedEx thinks of its employees.

Not surprisingly, the deaths are concentrated at FedEx’s Superhub in Memphis, Tennessee, the center of its global operations. In the early morning hours of Thanksgiving Day 2017 , the body of Ellen Gladney, a popular team leader and grandmother, was found under a mobile conveyor belt system. Two years earlier, Christopher Higginbottom, an eighteen-year veteran of FedEx and father of twin boys, was crushed to death by a tug, a motorized vehicle pulling carts. In 2014, Chandler Warren was crushed to death by a cargo lift. In each case, fines of several thousand dollars levied by the Tennessee Occupational Safety and Health Administration (TOSHA) were appealed by FedEx and reduced.

Meanwhile, FedEx whistleblowers have been subjected to harassment by the company, though they recently won a historic lawsuit against the company. According to NBC Los Angeles:

One former and two current employees at FedEx’s LAX location were collectively awarded millions of dollars after a jury found they were wrongfully disciplined by the courier giant after coming forward to report their allegations that the company put profits ahead of safety by not maintaining its aircraft consistent with FAA safety requirements.

With a record like this, it’s no wonder that the nomination of Scott Mungo, the vice-president for Safety, Sustainability and Vehicle Maintenance at FedEx Ground in Pittsburgh and former managing director for FedEx Express Corporate Safety, Health and Fire protection in Memphis, to lead OSHA has raised red flags. Democrats continue to block Mungo’s nomination as of early February, but this is the third time that Trump has nominated him. Trump clearly wants Mungo in the job.

William L. Murphy’s death is the latest in a series of on-the-job deaths at FedEx. These deaths should raise serious questions about Mungo’s qualifications for leading the most important federal agency for protecting workers lives. His nomination should be opposed by the labor movement. The impact of someone like Mungo working to dismantle an already underfunded agency would be devastating for worker safety and only lead to more worker deaths like Murphy’s.