ABF, Teamsters reach contract extension through October 29
ABF Freight System said yesterday that it has reached another contract extension with the International Brotherhood of Teamsters through October 29, while the groups work through the process for resolving the two remaining supplements to the ABF National Master Freight Agreement.
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ABF Freight System, the sixth-largest less-than-truckload (LTL) carrier in the country, said yesterday that it has reached another contract extension with the International Brotherhood of Teamsters through October 29, 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.
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. But those savings will not be realized until the final two supplemental agreements are approved. In this case, time literally is money.
Brad Delco, a trucking analyst with Little Rock, Ark.-based Stephens Inc., said in a note to investors that it might be mid-October before those final supplements are ratified. That could be a “best case scenario,” Delco noted.
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