The RLA classification matters because it keeps unions out in the short term (next 5 or so years). If Express was organized under NLRA and Fred started to shift volume over to Ground, the Express Couriers WOULD immediately start to organize and strike. Even the slow witted would understand that Fred's plan would mean the near elimination of the full-time Express Courier and would shut down Express to stop it. As part of any union negotiation, Express couriers would include a demand that all Express volume stay within Express, no outsourcing. The exact same issue that the FedEx aviation mechanics are wanting to include in a potential contract, no outsourcing of work.
If Fred had to sign a contract that would agree to keep all Express volume within Express, it would tie his hands with regard to cutting his cost structure. So in reality, it is all a matter of timing from Fred's perspective. From Fred's perspective, he has to keep the unions out to let him progress on his schedule. A union could possibly ruin his plans to move volume over to Ground (clause to not outsource in a contract).
1. Defeat all attempts to get Express reclassified under NLRA. (Looking good for FedEx).
2. Maintain the IC model of Ground. (Managed to defeat numerous legal challenges to this structure).
3. Implement the technology (ROADS) in Express to enable Couriers to be taken off the AM sort and replaced with low wage handlers to run the sort, load the trucks and get all pieces into stop order. (In progess for the past year, should have the software perfected in another 12-18 months).
4. Begin/complete the installation of caster decking in Ground terminals to enable cargo containers of non-overnight Express volume to be transferred directly to Ground for sorting and delivery by Ground IC's. (In progress).
5. Start the transfer of Express volume to Ground to save on delivery expense. (Probably start 18-24 months from now).
6. Begin the elimination of full time Couriers within FedEx. All routes would be reconfigured to require a part-time Courier. No full-time Courier would be eliminated, but should they retire or quit, the position would be transformed into a part-time position. Full-time Couriers still on the job would be required to make overnight deliveries in the AM, take an extended break, then perform a pick-up route in the late afternoon. (Will presumably start at the same time Express volume is transferred to Ground). Not many full-time Couriers will like working a 3-4 hour morning shift, taking an extended break mid day (in the field) then working a 3-4 hour afternoon shift. I'm sure part of the transformation would require all full-time Couriers to work a 4x10 schedule instead of a 5x8, meaning no opportunity for overtime. Not many would put up with this for more than a year or so.
It is all a matter of timing for FedEx (as is all things). If a union were to get into the mix before this was completed, Express could be shut down by striking Couriers and Fred would have the FedEx brand suffer because of the disruptions. Fred is dependent on the Couriers continuing their work as if nothing is going to happen; THEN he can make the change to the business models of both Ground and Express. He needs the non-unionized Express Courier to continue like nothing is going to happen to them for the next couple of years. THEN he can drop the bomb and start the transformation. All the Kool-Aid drinking Couriers would be left scratching their collective heads wondering what the heck happened. What will have happened is that they will have given FedEx the opportunity to pull their career out from under their feet and they were none the wiser for it while it was going on.
Fred has engaged in behavior like this before. When Flying Tigers was acquired in '84 (I think that is the date), there were "flight attendants" with Flying Tigers. Flying Tigers offered passenger service on their aircraft to help get some additional revenue. In order to have passengers, there had to be flight attendents. The Flying Tigers flight attendents were unionized at the time of its acquisition by FedEx. Fred gave the option to the flight attendents to either de-certify their union, or he'd shut down the passenger service aboard the now FedEx jets. The attendents didn't de-certify and FedEx eliminated all passenger service aboard its jets, the attendents were no longer needed and eliminated. Fred kept out a non-pilot union, even at the expense of losing revenue. This is how far Fred will go to keep out a union. He's done it with Express, he did it with the choosing of the business model of Ground, and he's going to continue to do it until he can turn Express into a part-time operation.
