Five-year deal reached by ABF Teamsters members

Nearly two months after ABF Freight System, the seventh-largest less-than-truckload (LTL) carrier by revenue, and the International Brotherhood of Teamsters, said they reached a tentative agreement on a contract for the next five years, the company said yesterday that its Teamsters members have formally ratified ABF’s national collective bargaining agreement.

ABF officials said a majority of the supplements to the ABF National Master Freight Agreement also passed, adding that the remaining supplemental agreements that require additional action cover various local work rule and other technical items and do not affect the major economic terms that are covered by the now-ratified ABF NMFA.

“We are very pleased that our Teamster employees have ratified the ABF NMFA, which is a critical step to putting ABF back on the path to profitability while still preserving the best-paying jobs and benefits in the industry,” said ABF Freight System President and Chief Executive Officer Roy Slagle in a statement. “We know this was a difficult decision for our union workforce, following many sacrifices made in recent years by our non-union employees, and we look forward to resolving the remaining supplements in the near term.”

Teamsters officials said that in addition to voting to approve the national master portion of the NMFA, they have also signed off on 21 of the 27 supplements, although some of the local/area supplemental agreements were rejected and need to be addressed before the national agreement is implemented.
Teamsters for a Democratic Union, the dissident wing of the 1.4 million member union, said that the ABF master contract was ratified by a vote of 3,210 yes to 2,965 no, with most of the big terminals, including Atlanta, Chicago, and Dayton rejecting the contract heavily. TDU said 7,753 ballots were mailed out, making this voter turnout about 80 percent of ABF Teamsters.
While full details of the contract were not released, the Teamsters said that the contract calls for a 7 percent wage reduction which will be recouped by the end of the contract.

“Once ratified, the national contract will protect our members’ health, welfare and pension benefits and will also give the company the ability to compete in a very tough trucking environment, which is good for ABF and the long-term job security of our members,” said Gordon Sweeton, Co-Chairman of the National ABF Negotiating Committee, in a statement.        

The Teamsters said that the Teamster negotiating committees responsible for the supplements that were not approved by a majority of voting members will be talking with the members in those areas, with the Teamsters Union scheduling meetings to engage the company in further negotiations to achieve our members’ objectives.

When the tentative agreement was announced in early May, ABF said that it was “in the best interests of ABF union employees and meets our stated goals to:
-maintain the best-paying jobs in the freight industry;
-stay in our current pension funds;
-ensure our employees have great benefits;
-adapt to the changing needs of our customers;
-put ABF on a path to profitability to secure jobs and retirement benefits for now and in the future”

In December, union locals representing 7,500 drivers, dockworkers, mechanics, and clerical staffers at ABF asked the carrier for a two-year contract with healthy wage and benefit increases.

As previously reported, Teamsters locals were asking ABF for $1-per hour wage increases and additional contributions to their pension, health and benefit package.

The company had already asked that it negotiate separately from chief union rival YRC Worldwide, which has been revived financially under new President and CEO James Welch.

After breaking away from chief rival YRC Worldwide in an attempt to negotiate separately with the Teamsters National Freight Industry Negotiating Committee (TNFINC), ABF made an initial contract offer that the union says insulted ABF’s 7,500 drivers, dockworkers, mechanics and clerical staff.

The Teamsters immediately responded with a press release that called that initial offer insulting and a “non-starter.”

BB&T Capital Markets analyst Thom Albrecht wrote in a research note last month that while his firm believes any concessions are likely to be financially favorable to ABFS they are not without consequences.

“If workers are disgruntled, then work slow downs may occur, even though such workers have few comparable job alternatives,” he wrote. “Lost productivity cannot be ruled out. In addition, it is not clear to us if ABFS will shrink its terminal network, which remains bloated with 275 facilities. Average shipments per day per service center of ~65 are way below peers, who average 130 to 200 shipments a day.”

ABF reported that first quarter revenue hit $520.7 million and was up compared to $440.9 million a year ago, and that it incurred a net loss of $13.4 million compared to an $18.2 million loss for the first quarter of 2012. ABF said that gains in revenue and tonnage on the LTL side were offset by higher wage and benefit costs for its Teamsters employees.