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A first: Teamsters union reaches agreement on contract with XPO

Deal in Miami comes after years of negotiations stretching back to LTL carrier Conway before XPO acquired it

(Editor’s note: the story has been revised, based on later XPO comment, that the total pay increase over the life of the two-year contract is 64 cents per hour.  A raise is not included in the second year of the contract. )

The Teamsters union has finally broken through with XPO Logistics (NYSE: XPO), reaching a contract agreement for the company’s Miami facility last week with rapid unanimous approval then being granted by the rank and file over the weekend. 

The contract between XPO and the Teamsters is historic in that it is the first that the union has been able to reach with XPO anywhere in the U.S. (XPO is partially unionized in Europe and says it has 212 unionized employees in the U.S. and Canada.) There are several other XPO facilities where workers have voted to be represented by the Teamsters but where no contract has been reached.

XPO’s Miami facility traces back to Conway Freight, the LTL carrier that XPO acquired in September 2015. Workers in Miami actually had voted to be represented by the Teamsters a year earlier, when it was still a Conway facility. 

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In a prepared statement, the Teamsters quoted Jim Hoffa, the union president, as saying that “XPO management said workers in the U.S. would never ratify a contract, but never is now.”

The response from XPO about the contract was succinct: “The Teamsters offered us a contract that was too attractive to turn down.”

Sources familiar with the contract said XPO believes there are several provisions in it under which unionized XPO workers are worse off than nonunionized workers at the facility, including pay that won’t catch up to that of the nonunion workforce until the start of 2022. The sources also said the average 0.9% raise negotiated in the contract is less than what nonunionized workers can expect to receive based on recent history. 

There also is no limit on the use of subcontractors, the sources said. 

In an interview with FreightWaves, Greg Chockley, the national campaign coordinator for the Teamsters, said the two-year contract is retroactive to June 1. While there are pay considerations, Chockley mostly wanted to discuss the procedures and rules that come with the contract. 

“They are looking to have their working ways put into writing and hold the employer accountable in ways that they don’t have as unorganized workers,” Chockley said. 

He ticked off a list of provisions in the contract: protection of retirement benefits, protection of processes, requiring just cause for termination or discipline. Chockley added that there also is a provision for binding arbitration for disputes, with the judging in the process to be done by an independent arbitrator. Previously, Chockley said, XPO was “judge, jury and executioner.”

Josh Zivalich, the president of Teamsters local 769 in Miami, which will represent the workers at XPO, said another provision sought by the union that is in the contract is a seniority system that will govern layoffs and callbacks. 

Chockley said average pay will be more than $30 per hour after a negotiated increase is implemented. An XPO spokesman said there is a 64 cents per hour raise in the first year of the contract and none in the second. A Teamsters spokesman said wage increases over the prior five years, during negotiations between the union and the company, averaged $8 per hour. 

Approximately 70 workers are covered by the contract. 

The relationship between the Teamsters and XPO has been one of the longer-running and more contentious in both the logistics industry and the labor movement. Earlier this year, workers who had voted to be represented by the Teamsters reversed course at two XPO facilities after failing to reach a contract agreement at either site. (A third facility also reportedly had the same reversal).

Meanwhile, Teamsters pressure did help lead to the pay package for XPO’s CEO being rejected by shareholders earlier this year. Sources close to the Teamsters also said that XPO employees had rejected four election petitions last year. 

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John Kingston

John has an almost 40-year career covering commodities, most of the time at S&P Global Platts. He created the Dated Brent benchmark, now the world’s most important crude oil marker. He was Director of Oil, Director of News, the editor in chief of Platts Oilgram News and the “talking head” for Platts on numerous media outlets, including CNBC, Fox Business and Canada’s BNN. He covered metals before joining Platts and then spent a year running Platts’ metals business as well. He was awarded the International Association of Energy Economics Award for Excellence in Written Journalism in 2015. In 2010, he won two Corporate Achievement Awards from McGraw-Hill, an extremely rare accomplishment, one for steering coverage of the BP Deepwater Horizon disaster and the other for the launch of a public affairs television show, Platts Energy Week.