Critics turn up heat on proposed postal-FedEx alliance

Questions continue to dog the U.S. Postal Service's proposed alliance with FedEx Corp.

First, House Judiciary Chairman Henry Hyde, R-Ill., suggested that the alliance raises a series of antitrust concerns. Now, two ranking members of the House Government Reform Committee-and sponsors of H.R. 22, the Postal Modernization Act-have made similar charges.

Reps. Dan Burton, R-Ind., and John McHugh, R-N.Y., wrote Attorney General Janet Reno Oct. 3 to suggest that the Postal Service's immunity from antitrust laws "presents difficult questions in the context of its proposed strategic alliance with FedEx-private corporation that is fully subject to antitrust regulation." Burton chairs the Government Reform Committee; McHugh chairs the its subcommittee on the Postal Service.

Officials from the Postal Service and FedEx last month said they were considering a strategic alliance. Details are still hazy, but it is likely that the alliance would give the Postal Service access to FedEx's shipping capabilities. The company would carry Priority and Express Mail on its planes and trucks. In exchange, the Postal Service would likely deliver FedEx packages to private addresses. And, in all likelihood, postal employees would pick up packages that customers are returning to Internet vendors.

Tad Segal, a spokesman for UPS, said the alliance should be scrutinized because it appears that the Postal Service is forming an exclusive alliance with a private-sector competitor.

"We have a problem with a government agency ... reaching out to favor one private sector company over another," he said. "That should be available to anyone. Not just FedEx. Not just us, but to Emery or DHL or anyone."

Azeezaly Jaffer, vice president for public affairs at the Postal Service, countered, "There is no exclusivity here. There is an open seat at the table." He added that UPS or any other shipper is welcome to talk with the Postal Service about a strategic alliance.

McHugh and Burton did not ask Reno to launch an investigation.

"Should you choose to investigate antitrust and anti-competitive issues involving the proposed alliance, we would suggest that you also take the opportunity to examine the structure of the entire domestic postal and delivery sector, which would include both public and private entities," the representatives wrote.