Copyright 2000 The Washington Post
The Washington
Post
September 8, 2000, Friday, Final Edition
SECTION: FINANCIAL; Pg. E10
LENGTH: 540 words
HEADLINE:
UPS Vows To Fight FedEx's Postal Deal
BYLINE: Vernon
Loeb , Washington Post Staff Writer
BODY:
United Parcel Service of America Inc. drew battle lines yesterday in
the air-freight industry, promising a fight in Congress to block the U.S. Postal
Service and Federal Express Corp. from entering into any type of "strategic
alliance."
UPS went public with a host of objections one day after
Postmaster General William J. Henderson confirmed that the Postal Service and
FedEx could wrap up negotiations within a month on such an alliance. Under
consideration is a plan for the Postal Service to deliver many FedEx packages to
homes across the nation, while using FedEx's air transportation network to move
Priority and Express mail around the world.
"This is a government agency
that looks as though it is trying to exclusively favor one private company at
the expense of others," said Tad Segal, director of public relations in UPS's
Washington office. "The Postal Service isn't a private business--they have a
monopoly on letter mail, which they use as a club against the private sector."
If this deal involved two private companies, Segal said, "bells and
whistles would be going off in the Justice Department's antitrust division. Just
because the Postal Service is a government agency doesn't exempt them from bells
and whistles going off in Congress."
But Henderson gave no ground in a
telephone conference call with reporters yesterday, saying he knew of no legal
impediment that would keep the Postal Service from entering into a contract with
a private company.
"We have a similar deal with Emery Worldwide right
now on a smaller scale," Henderson said. "Congress could interfere in anything
it wants to interfere in. I don't know what the reaction would be to this. [But]
the notion that we are seeking more efficient air transportation shouldn't
surprise anybody."
Rep. John M. McHugh (R-N.Y.), chairman of the House
Committee on Government Reform's Postal Service subcommittee,
said yesterday that an alliance between the Postal Service and
FedEx would be unprecedented in scale, but not necessarily unlawful.
"I'd be surprised if the Congress were to step in, at least in theory,"
McHugh said.
McHugh said he looked forward to hearing further details of
the plan from Henderson at an oversight hearing Sept. 19, and promised his
subcommittee would look carefully at any proposal.
Rep. Chaka Fattah
(D-Pa.), the subcommittee's ranking Democrat, said he would keep an open mind,
but noted that "the Postal Service has the right--and has exercised it--to agree
with for-profit businesses on a whole range of matters."
Henderson, who
hopes to present a final plan to the Postal Service Board of Governors next
month, said the proposed alliance would have Postal Service letter carriers
delivering FedEx packages "the last mile" to residences across America.
The Postal Service, in return, would use FedEx's vast fleet of jets to
carry Priority and Express mail at rates now below those offered by Emery
Worldwide. The deal would not involve the Postal Service delivering either
FedEx's overnight packages or its larger shipments in excess of the Postal
Service's 70-pound weight limit.
"We think that, bottom line, this is in
the best interests of the American public," Henderson said.
LOAD-DATE: September 08, 2000
