Dive Brief:
- Contract bargaining between FedEx and its pilots union continues to trudge along after a federal mediator rejected the union's request to be released from supervised negotiations.
- The National Mediation Board called on the parties to restart sessions under its supervision on Sept. 24, according to a statement from Jose Nieves, who leads the FedEx pilots union. Federally mediated negotiations began in October 2022.
- "To date, FedEx has made no effort to work collaboratively on the terms of a contract remedy beyond what is required of the NMB, leading to further uncertainty," said Nieves, chair of the Air Line Pilots Association, International's FedEx Master Executive Council. FedEx said in an emailed statement that it is committed to reaching a fair agreement through the mediation process.
Dive Insight:
The NMB's decision blocked the opportunity for the pilots union to decline further arbitration and advance toward a possible strike, turning up the heat on a contract dispute that has dragged on for years.
"FedEx simply cannot achieve growth and profitability while simultaneously short-changing the pilots on a labor contract and expecting operations to continue without the labor union marching down the legal path to self-help," Nieves said.
FedEx pilots last signed a labor agreement in 2015. Discussions for a new contract began in May 2021, prior to the contract becoming amenable that November. As negotiations stretched into 2022, the parties called on a federal mediator to help expedite talks.
Under the oversight of the NMB, FedEx and its pilots union reached a tentative agreement in May 2023. The deal included a 30% pay raise and a 30% increase to the pilots' legacy pension, which had been a sticking point prior to the appointment of a mediator.
"To date, it is the largest investment in a pilot contract, on a per capita basis, and substantially raises the bar on pilot retirement," according to a June 2023 news release from the ALPA.
But a majority of pilots rejected the agreement two months later. That led the two sides to eventually resume mediated negotiations in November 2023. Since then, union leadership has expressed frustration over the lack of movement from company management on pay rates and retirement, key aspects of the contract.
FedEx pilots requested that the NMB release it from mediation on March 8 in a bid to expedite a new agreement. If the NMB granted the release, the pilots could have declined further arbitration and entered a 30-day "cooling off" period. After that, pilots could strike or management could institute lockouts.
"The reason for this is apparent; the Company has made clear that it will not agree to any added cost over the rejected agreement," ALPA President Jason Ambrosi wrote to NMB leadership in March.
Ambrosi noted that the industry standard for pilot pay has evolved since negotiations began in 2021, with pilot contracts reached at top carriers Delta Air Lines, American Airlines, United Airlines and Southwest Airlines.
"FedEx pilots will not accept less in pay than what has clearly become the industry standard, nor have they ever accepted less than that in any negotiation since ALPA came on to the property," Ambrosi said.
As pilots push for a pay boost, FedEx is overhauling its air cargo network for the future. A FedEx Express executive told crew members last November that its flight operations "are significantly overstaffed" for the soft air cargo market. One month later, the company unveiled an air network redesign to help rightsize its capacity and make it more resilient against future demand slumps.
FedEx Express' network is poised to face further volume pressures after its air transportation contract with the U.S. Postal Service — its largest customer as recently as last year — expired on Sunday. The agency announced an air cargo deal with UPS in April that was implemented on Monday.
FedEx’s pilot ranks are likely to be thinned as a result, Marty Harrington, scheduling committee chair for FedEx’s pilots union, said on a union podcast in May.
“A lot of things are going to impact pilots’ lives going forward on this," Harrington said.
