Proposed Postal-FedEx alliance under fire

An alliance proposed earlier this month between the U.S. Postal Service and Federal Express is expected to receive close scrutiny Tuesday afternoon at a general oversight hearing of the House Government Reform Postal Service Subcommittee.

"I think it will come up," a committee aide told CongressDaily, though he added that "I can't speak to the official position" of either the subcommittee or chairman John McHugh, R-N.Y.

Details of the proposed alliance are skimpy, but reportedly could include such cooperative efforts as the Postal Service carrying some of FedEx's residential ground deliveries in rural areas while FedEx handles distribution of some Postal Service Express Mail packages. Some co-branded international services are also being considered.

The agreement would need approval of the Postal Service's Board of Governors, which is to be briefed on the plan next month. Postmaster General William Henderson told the Associated Press that he expected the cooperation to be underway by next spring.

The proposed deal has irked United Parcel Service, which competes with both potential partners. In a statement released Sept. 7-just as the proposed deal became public-the company decried the Postal Service for using its "$40 billion government-granted monopoly from first class mail ... to compete unfairly in the marketplace."

"If the government decides that it will align itself with a private-sector entity, that should not occur to the exclusion of other competitors," said a UPS spokesman. The hearing is scheduled for 1:00 p.m. in room 2154 of the Rayburn House Office Building.