Union heads say they are prepared for a fight heading into labor negotiations with less-than-truckload carriers ABF Freight and TForce Freight. In a Friday news release, the organization made clear to its rank and file it would be “militant” and “secure lucrative agreements” on their behalf.
The International Brotherhood of Teamsters said its negotiating arm met in Washington on Friday to review proposals ahead of negotiations with TForce Freight, a TFI International (NYSE: TFII) company.
The labor deal between the two parties expires July 31. Teamsters will also be negotiating a collective bargaining agreement with ABF Freight, an ArcBest (NASDAQ: ARCB) subsidiary, ahead of a June 30 expiration.
“Our freight members are one of the Teamsters’ biggest priorities, and we are ready to fight like hell at the table to get the very best contracts at TForce and ABF,” said Sean O’Brien, Teamsters general president.
O’Brien took the helm in March after winning an election by a wide margin. He has vowed to rebuild the organization and take a hard-line approach in contract negotiations. He recently voiced a similar tone heading into labor talks with UPS (NYSE: UPS).
“The day our administration took office was the day concessions to the freight industry ended. We’re eager to get to work on negotiating contracts that raise standards and rebuild this industry for workers,” O’Brien said, referring to past negotiations in which members accepted cuts to wages and benefits to keep struggling carriers afloat.
The news release said the union has received a record number of responses to bargaining surveys from workers at ABF and TForce.
The agreements with the two companies cover more than 15,000 members.
An agreement covering roughly 25,000 workers at Yellow (NASDAQ: YELL) expires March 31, 2024. Negotiations for that deal likely won’t ramp up until later this year. The union is currently in a dispute with Yellow regarding proposed changes to operations that would further consolidate terminals and redefine work rules for some employees.
Judy McReynolds, ArcBest’s chairman, president and CEO, took a more measured approach when discussing the upcoming interchange.
“We’re prepared for what’s coming in terms of the contract negotiations. I feel like our team has prepared and planned, and we’re in a good place, and our leaders are regularly in the field with our employees and hear directly from them about what’s on their minds,” McReynolds told analysts on a call discussing fourth-quarter results.
“I’ve been through a number of these, and they’re all different, but as long as you’re prepared and you have a good approach and intentions and information, typically, we can work our way through this.”
The negotiations come at an inflection point for the industry.
An extended pullback in retail demand is coinciding with a softening in industrial markets. Tonnage for most carriers turned negative at the end of the summer with the year-over-year (y/y) declines accelerating through the end of the year. Several carriers reported mid- to high-single-digit tonnage declines during the fourth quarter; however, yields increased by a similar percentage when excluding fuel surcharges.
As far as the negotiations, the union will be able to point to multiple quarters of record profits as justification for higher wages. Carriers will call out the potential for a global recession and assert that weakened demand and broader cost inflation will weigh on earnings in 2023 and potentially beyond.
However, management teams from most LTLs are calling for normal seasonality and higher volumes to return by midyear.
ABF’s current contract stipulates approximately a 2% annual bump to wages and benefits. The agreement also has a profit-sharing component paying up to 3% based on the unit’s performance. ABF has produced operating ratios warranting the maximum payout over the past several quarters.
Negotiations with Yellow may be tougher given that it continues to lose money as it executes a companywide overhaul. Yellow posted a 99% OR, excluding a gain on the sale of a terminal, during the fourth quarter, meaning it was barely profitable at the operating line before interest, taxes and other items are paid. The company booked a fourth-quarter net loss of $15.5 million when including the $28.2 million gain.
The company normally sees 200 basis points of margin deterioration from the fourth to the first quarter.
“We are ready, we are militant, and we will win strong national contracts for Teamster members at TForce and ABF this year,” said John Murphy, Teamsters freight division director. “Our negotiating team isn’t going to back down. We have a plan and a vision focused entirely on getting our freight members what they deserve.”
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Freight has been a lost issue with the teamsters since deregulation in 1980. There are way to few ltl carriers for the teamsters to go to war with. Yellow Frt I hate to say is going in debt further and further. ABF is the only ltl carrier in the union turning a profit. It is impossible to get the other ltl carriers to get unionized because of the stigma of unions from years ago. Unionized ltl was once the foothold of the teamsters is no more.
Militant leadership could not come at a worse time for the rank and file teamster workers. ABF is in a position of profitability and they’ll likely hammer out an agreement. TFI (TForce) on the other hand is all smoke and mirrors, their position to give the union what they want just isn’t going to happen. Between TForce and YRC, you’ve got big problems brewing for the teamsters in the near future.
U blind Atlanta teamster
1 yellow is mis managed from top down.
Drug/drunk dock workers
Dennis Marion Safrit Sr.
it’s a shame we can’t get the union to step up and help us over here at Holland and New Penn. guess we’re just not as important. maybe freight waves need’s to look a lot deeper into how bad yrc ,yellow or what ever they’re calling their self today.it would be nice if someone would write and print the real truth about what’s happening over here at our places. i’m sure the 30,000 people that they lied about saving along with the families would make for some real news. it’s a shame that the blue collard workers will end up paying back that 1.8 billion plus interest.
You must post when the spot rates will go up we are suffering through this time
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