FedEx Has Become Just Another Rent-Seeker

(Malcolm Wallop) – FedEx CEO Fred Smith is on this year’s Forbes list of richest Americans. Back in the 1970s, Mr. Smith was a real and inspirational entrepreneur and built an impressive company providing express-delivery services. I’ve never been a fan of class warfare so I do not begrudge Mr. Smith his success or his wealth. He built a successful company and employed thousands of people. We need more wealthy entrepreneurs building successful businesses and employing more Americans.

But at some point, FedEx transitioned from being the entrepreneurial-inspired company it was in the 1970s to just another big corporation seeking political favors from Congress.

Washington, D.C., has given FedEx special regulatory treatment that its express delivery competitors are denied. As a result, FedEx is able to classify its truck drivers as airline employees, while every other express-delivery company must classify their truck drivers as, well, truck drivers.

FedEx has defeated previous attempts to equalize the law. But in attempting to protect its special deal this time around, FedEx has gone so far as to accuse its competitors of seeking a “bailout,” rather than tell the truth — which is that these competitors are merely seeking equal treatment.

One of the things I’ve learned through a lifetime of experience is that you can discern if people are telling the truth by listening to what they are saying and comparing it to what they are doing. If what they say and do are inconsistent, you know that they aren’t cutting straight with you. Using that nugget of wisdom, it is obvious that FedEx continues to dissemble and mislead as it opposes any reform to treat all delivery companies equal before the law.FedEx is doing all this because it allows them to pitch to potential customers that their special treatment in Washington makes them “union proof,” and immune to future labor disruptions.

Of course, this ploy is the farthest thing from true entrepreneurship and fair competition. But it can also be effective. So FedEx is willing to go to extreme measures to defend its special treatment, and has launched a slick but disingenuous multimedia and lobbying campaign labeling efforts to level the playing field as a “bailout.”

Calling a law that treats all competitors the same a bailout is neither factual nor honest. And in conducting such a campaign, FedEx is in fact opposing the longstanding American ideal of equality under the law.

Let’s be clear. The term bailout applies when the federal government steps in and provides vast sums of taxpayer dollars to a floundering business. The law that FedEx opposes does not provide for even one dime of taxpayer money to go to anyone.

FedEx understands that it is the beneficiary of a special deal it got in Washington that harms its competitors. And FedEx likes things that way. It allows them to win in many cases, not by providing a better service and not by providing better prices, but by taking advantage of a favor paid to it by politicians.

To those of us — and I was once one — who have cited FedEx as an amazing example of entrepreneurial spirit and a will to thrive in a competitive marketplace, we must admit those days are over. FedEx has become just another rent-seeking corporation hoping government power will help make it more profitable. But the mood of the country is changing fast. The American people are sick and tired of special deals from Washington. Is FedEx listening? And are the congressmen and senators who support FedEx’s outrageous position listening?

(Malcolm Wallop served for three terms as a Republican U.S. senator from Wyoming)