The language in the letter of understanding says "its", which is singular, instead of "their", which is plural. It's pretty clear this is all aimed specifically at fedex and smartpost.I'm sure UPS would use that argument.
A guy selling cheeseburgers out of his van might have a product comparable to a bigmac but to say he's McDonald's competition would be a stretch. Scale is a factor and the intent of the contractual language matters.
Either way, that's a decision for the union competition and negotiating committees and possibly arbitration. At the very least, this should be leveraged to get a large amount of last mile deliveries back into the hands of UPS teamsters.