Endless Labor Talks Do No Favors for FedEx or Its Pilots

During FedEx Corp.’s hourlong earnings conference call on Thursday afternoon, executives discussed package demand, cost cuts, the spinoff of its trucking business and other important aspects of the company’s performance. Chief Executive Officer Raj Subramaniam even thanked pilots, drivers and other employees for maintaining high service levels during the peak holiday season.

What wasn’t mentioned is the drawn-out labor talks with FedEx’s unionized pilots, who haven’t received a pay increase in more than five years. FedEx’s more than 5,000 pilots are stuck in the limbo of mediation under the Railroad Labor Act, which has no time limit and keeps the pilots working under their old contract.

Some of the blame falls on the pilots, who in July 2023 rejected a tentative agreement reached between the company and union negotiators that would have boosted pay by 30% over the five-year deal. FedEx says it’s now offering a 40% raise. Still, the National Mediation Board, which under the Railroad Labor Act is designated to work with both sides to reach an agreement, has declined to declare an impasse on the talks.

After four years since the old contract became amendable (contracts never expire under the RLA), it’s time to close the deal or declare an impasse. The latter would be a big victory for the pilots. If the National Mediation Board were to declare officially that talks are hopelessly stuck, it would trigger a series of cooling-off periods and potential presidential intervention that could culminate in a strike. The RLA, though, allows Congress to intervene to force a settlement.