From the WSJ:

“The Air Courier Conference of America, an industry trade group with a board of directors that includes UPS and FedEx executives, fired back. James A. Rogers, chairman of the group’s international committee, sent a letter to Customs that said any “assertion that the increased drug seizures are evidence that the express industry is now the preferred conduit for drug traffickers is a huge jump to a very wrong conclusion.” The drug-seizure increase, he said, was the result of “copious efforts” by carriers to work with law enforcement. “At the very least, we believe a public apology is in order,” Mr. Rogers demanded in the letter.

He didn’t get one. Instead, top Justice Department officials suggested to Attorney General Reno in early 1998 that she convene a working group from officials at the DEA, the FBI, the Postal Inspection Service, FedEx, UPS, Airborne, DHL, the Emery Worldwide Airlines unit of CNF Inc. and state and federal prosecutors to discuss a coordinated, nationwide approach to interdicting drug movements. A key element promoted by some of the law-enforcement officials, according to a top postal-inspection official, was to give law enforcement access to the private databases of the big shippers.

That was a particularly thorny proposition for FedEx and UPS, which have spent fortunes to build the information systems needed to orchestrate their clockwork deliveries. Each package moving through their systems — about 18 million a day combined — is hit by electronic scanners at least a half-dozen times during even a short journey within the U.S. As a result, at any instant, the companies’ computers can zero in on the exact locations of items in transit and the history of other shipments by the same sender or to the same recipient.

The private-sector delivery companies — but not the Postal Service — are required to supply Customs agents with an electronic record of delivery-manifest information on all international shipments destined for the U.S. Customs officials then use their own computers to check for clues of drug smuggling hidden in the addresses, descriptions of contents and other data about each package. A box speeding via FedEx, for example, toward the same address as a previous package nabbed by a drug-sniffing dog usually will be flagged by the computer. And agents may inspect any international package on a private carrier without a search warrant.

But the private carriers aren’t required to provide the same data to law-enforcement agencies about packages being shipped within the U.S., and all foreign-bound Postal Service shipments are exempt from scrutiny without a warrant. Postal officials say the law is clear: Mail is just as protected from warrantless searches as someone’s house. “There is a delicate balance between defending the borders and protecting the privacy rights of our citizens,” says Kenneth Newman, deputy chief in the Postal Inspection Service’s criminal-investigations unit. The Postal Service currently is fighting draft federal legislation that it claims would allow Customs to freely search mail leaving the U.S.

In the meetings of the Justice Department task force last year and early this year, which weren’t attended by Ms. Reno, officials from the express-delivery companies insisted that they must walk a similarly fine line, even though the constitutional protections of the mail don’t apply to them, according to people who attended the sessions.”