“FedEx Corp [formerly Federal Express] is the world’s top express delivery service, thanks in large part to its close relationship with members of Congress and the White House. For years, the company has been a major campaign contributor to both Democrats and Republicans and is famous for its unique lobbying tactics, including the fleet of private planes that it keeps on stand-by for lawmakers who need to jet off at a moment’s notice. In exchange, the company has gotten unparalleled access to debates over international trade, tax cuts and rules that govern the business practices of its one-time competitor, the United States Postal Service [USPS]. In 2001, FedEx cemented a groundbreaking deal with the USPS to deliver all of the post office’s overnight packages and express deliveries. In turn, FedEx was allowed to put its drop boxes in post offices around the country.”
Since 1989 FedEx has made over $20 million in campaign contributions to both Republicans (60%) and Democrats (40%), and since 1997 spent a staggering $80 million lobbying the Washington elite. In return they have been “awarded” over $11.8 billion in federal government defense, transportation and logistics contracts over the past decade, and they have seated at least 29 of their employees on key federal “advisory” committees at the Department of Transportation and elsewhere.
FedEx has also benefited greatly in recent years from a series of legislative and regulatory changes that might best be described as the systematic piecemeal privatization of the U.S. Postal Service, key among those changes being the Postal Accountability and Enhancement Act of 2006 (PAEA) that required the Postal Service to prefund the health care benefits of future retirees – a burden no other government agency or private company bears – and contained other provisions that made it difficult if not impossible for the USPS to operate at optimum efficiency and effectively compete with companies like FedEx and the United Parcel Service (UPS). Those “other provisions” contributed far more to the $5.1 billion loss the USPS reported this week than did the impact of the Internet on first class mail volumes.
Also contributing greatly to USPS losses are the billions of dollars that – thanks to crony capitalism – they have been forced to pay to big-name federal contractors for transportation, technology and other outsourcing and support services that could be done in-house for much less money. FedEx ranks #1 on Top U.S. Postal Service Suppliers List, raking in over $1.3 billion in 2010 alone:
Audits released by the USPS Office of the Inspector General published last year disclosed that millions of the dollars funneled to FedEx were unnecessary and wasteful, proving that their deal with FedEx was only a deal FOR FedEx. Here is a quote from of those audits:
“It was more effective and economical in some cases for the Capital Metro, Eastern, Great Lakes, and Northeast Areas to use ground transportation and domestic air carriers as well as to sort mail at Postal Service plants than to use FedEx to perform these functions. Because the areas used FedEx, the Postal Service incurred about $35.3 million in unnecessary costs. If these areas implement our recommended changes, we estimate the Postal Service could save $170.6 million over a 10-year period.”
On a combined basis, the OIG audits showed THE CONTRACT WITH FEDEX HAS SQUANDERED OVER $94 BILLION SO FAR, AND COULD WASTE ANOTHER $480 MILLION OR MORE if allowed to continue:
The United States Postal Service cannot be expected to successfully compete with companies like FedEx when those companies are using political influence and payola to place undue financial burdens on the USPS, to force wasteful and unnecessary outsourcing, to mangle its business practices and to cripple its efficiency. To better understand what corporate greed and systematic kleptocracy have done to (take over) our mail service and how, these three references are must-reads:
The Strange Story of Postal Reform
How to Privatize the Post Office: Piece by Piece, Step by Step
Battle Over USPS Future Enters Critical Period
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