Brands Taking Stands: FedEx Fills a Leadership Void, Intentionally or Not

The corporate social responsibility movement has been ramping up to a new level over the past two years, as leading consumer brands take steps to address the reputational risk of associating with right wing extremism. One significant development occurred on the heels of last week's hate-fueled violence - FedEx has announced that it will no longer provide a shipping discount to the National Rifle Association.

To be clear, the break is between FedEx and its broader marketing program, which includes the NRA organization among many others. The company has stated that it will still provide discounts to individual NRA members. Nevertheless, there is more to that announcement than meets the eye.

Brands (not) taking stands

FedEx came in for a good deal of criticism over its relationship with the NRA long before the trio of violent episodes erupted last week, including a series of failed package bombs in New York and other cities, the deadly shooting of two shoppers in Kentucky and the massacre of 11 people at a synagogue in Pennsylvania.

Back in January 2017, an alliance of gun control organizations drew attention to the connection between FedEx's robust delivery business with gun dealers in Florida, the state's notorious "stand your ground" law enabling citizens to use deadly force and a spike in homicides that some researchers have linked to passage of the law.

The pressure turned up considerably higher with the murder of 17 people at a high school in Parkland, Florida earlier this year.

Rather than letting adults spearhead the reaction, students at the school took the lead with an informed, passionate appeal for gun control that resonated nationwide.

Major brands, most notably Dick's Sporting Goods, quickly withdrew from their relationships with the NRA. The list of those making a swift, public withdrawal included the First National Bank of Omaha, rental car companies including Enterprise, Hertz and Avis, the purchasing service TrueCar, airlines United and Delta, cybersecurity companies SimpliSafe and Symantec, the Wyndham Rewards program of Wyndham Hotels, MetLife Insurance, Allied Van Lines and NorthAmerican Van Lines.

The list of household brands did not include FedEx, which may have been hoping that the public spotlight on the Parkland murders would soon dim, just as it has in so many other cases.

Brands taking stands: when boycotts work

So, what finally prompted FedEx to drop marketing ties with the NRA after last week's violence?

It could have simply been a case of the very last straw. The Oval Office is occupied by a president who has populated his inner circle with people sympathetic to the white nationalist movement, and who gins up fear, anger and paranoia as a matter of routine, promoting an undercurrent of state-approved violence and resentment. It was only a matter of time before that influence propagated from online bullying and rally-goer chanting into the real world.

The reaction of other brands may have also motivated FedEx to take a stand. In the wake of the Pittsburgh massacre, the killer's affinity with the extremist social media platform Gab came to light and brands were caught in the reflection.

Consumer brands had already kept Gab at a distance from the get-go, and Microsoft had already cut off Gab from its hosting service Azure. The site's current host, Joylent, swiftly closed out the account after the massacre. PayPal and Stripe were already beginning to disentangle their services from Gab, and both companies brought the process to a swift conclusion after the massacre.

This kind of reaction takes corporate social responsibility into a new level of activism, in which brand risk is deeply entwined with issues of broad social concern that are not being addressed by elected decision makers.

Reputational risk and the bottom line

Whether or not brand risk and brand activism were significant factors, FedEx has chosen to downplay its decision as a bottom-line strategy.

The NRA decision was slipped into a group of 100 organizations that formerly received FedEx discounts.

As reported by Local 24 News in Memphis, Tennessee, FedEx provided this explanation:

We are transitioning some account holders in more than 100 organizations in the FedEx Marketing Alliance program to other pricing programs. Account holders that participated in the program will continue to receive the same discounts on FedEx shipping, and we will work directly with these customers to ensure a seamless transition.”

The New York Times provided more details:

...FedEx said on Tuesday that its decision to end its marketing relationship with the N.R.A. was the result of a review that began months ago. The review showed that members of the group did not bring in enough shipping volume to warrant its participation in the program, the company said. More than 100 companies were dropped from the discount program as part of the review.

That's fairly consistent with the argument FedEx employed to defend its NRA shipping discount shortly after the Parkland murders:

FedEx is a common carrier under Federal law and therefore does not and will not deny service or discriminate against any legal entity regardless of their policy positions or political views. The NRA is one of hundreds of organizations in our alliances/association Marketing program whose members receive discounted rates for FedEx shipping. FedEx has never set or changed rates for any of our millions of customers around the world in response to their politics, beliefs or positions on issues.

However, FedEx's position started to crumble when other companies dropped the NRA from similar discount programs. FedEx tried to deflect attention by pointing out that UPS ships from the NRA store, but that is an apples-to-oranges comparison. UPS has stated that it does not provide a discount (as a side note, the NRA store sells gun-related paraphernalia, not guns).

Bottom line or not, FedEx may have come to the realization that the consequences of terrorism ripple far beyond the actions of individuals. Brand risk applies to companies that provide material support those who promote gun violence as well as those who perpetrate it.

Photo (cropped): Backbone Campaign (photo by Mike King)/flickr.