ABF Central Region Teamsters reject strike authorization

Teamsters employees at ABF Freight System covered by the Central Region Local Cartage supplement to the ABF National Master Freight Agreement (NMFA), the sixth-largest less-than-truckload (LTL) carrier in the country, told ABF on October 29 that they have voted to reject a strike authorization.

Teamsters officials said there was 77 percent turnout among membership covered by the Central Region Local Cartage Supplement which voted not to strike by a 70 percent to 30 percent margin.

ABF said there will be no strike by employees in the affected region or in other parts of its national system, and it added that the next steps towards finalization of the national agreement will be determined in the near future. And it added that the five-year NMFA is the first agreement it has negotiated on its own behalf.

The Central Region Local Cartage Supplement, noted Delco, is the last remaining supplement outstanding that has prevented the national agreement from going into effect.

In late September ABF reached another extension with the Teamsters while the groups work through the process for resolving the two remaining supplements to the ABF National Master Freight Agreement.

ABF said in a statement that the national agreement was approved by a majority of Teamster employees on June 27, with the increases in contributions to health, welfare and pension plans that were supposed to begin August 1 not going into effect as scheduled until the two remaining supplemental agreements are resolved.

Stephens analyst Brad Delco wrote in a research note that this vote “eliminates a significant hurdle to completing the negotiating process,” adding that “once complete, we believe ABFS will be in a better position to compete with its non-unionized peers and will return the company to a path of sustained profitability.”

As previously reported, the contract includes an immediate 7 percent wage reduction covering 7,000 ABF Teamsters that is restored by the fifth year of the contract. The overall agreement was narrowly approved by ABF Teamsters on June 27. But seven “local/area supplements” were again placed on the local ballots for approval.
 
Parent Arkansas Best Corp. said late in late August that only five of the seven supplements were approved after further negotiations and rank-and-file voting. Until supplemental agreements covering the Teamsters’ Central Region Local Cartage and the Western States Office Employees are approved, overall wage savings from the new contract will not start to be realized by ABF.
 
“The national master portion of the ABF National Master Freight Agreement has previously been approved, but will not take effect until the status of the two remaining supplements is resolved,” the Teamsters said in a statement.
 
Arkansas Best Corp. in a filing with the Securities and Exchange Commission, called the new five-year agreement “an important step to return ABF to its historic profitability, while preserving the best-paying jobs and benefits in the freight industry.”
 
ABF wants some of those jobs to be a little less well paid. Unionized rival YRC Worldwide is operating with an agreement that its 15,000 Teamsters are paid 15 percent less than the National Master Freight Agreement (NMFA) requires. That 15 percent wage cut amounts to about a $80 million savings annually for YRC, which has lost in excess of $2.6 billion since 2007.
 
Using that same calculus, ABF stands to save approximately $16.5 million annually from its 7 percent wage concession covering its 7,500 Teamsters.