• DTS.USA
    5.829
    -0.005
    -0.1%
  • NTI.USA
    2.860
    0.010
    0.4%
  • NTID.USA
    2.820
    -0.040
    -1.4%
  • NTIDL.USA
    1.930
    -0.030
    -1.5%
  • OTRI.USA
    7.990
    0.040
    0.5%
  • OTVI.USA
    12,810.370
    100.000
    0.8%
  • DTS.USA
    5.829
    -0.005
    -0.1%
  • NTI.USA
    2.860
    0.010
    0.4%
  • NTID.USA
    2.820
    -0.040
    -1.4%
  • NTIDL.USA
    1.930
    -0.030
    -1.5%
  • OTRI.USA
    7.990
    0.040
    0.5%
  • OTVI.USA
    12,810.370
    100.000
    0.8%
Company earningsLess than TruckloadNewsTop Stories

TFI may seek a different approach in upcoming Teamsters talks for TForce Freight contract

Different wages for different geographies, rather than a uniform pay scale, may be what’s in store for negotiations, CEO says

TFI International’s boss has taken what appears to be a novel approach to next year’s contract negotiations with the Teamsters union, and it may not sit well with Teamsters leadership.

Alain Bédard, chairman, president and CEO of the Montreal-based transport giant, hinted Friday that he wants to dispense with a uniform nationwide wage structure for workers at LTL carrier TForce Freight, the former UPS Freight which TFI (NYSE: TFII) acquired from UPS Inc. (NYSE: UPS) in January 2021 for $800 million in cash. In its place might be a contract that sets wages based on the geographies of the workers.

The upcoming talks are “going to be a major change for us because now we’re getting our operational people involved in the next discussion” with the Teamsters, Bédard told analysts following Thursday’s release of the company’s first-quarter results.

Bédard said he doesn’t want attorneys involved in the negotiations. “We want operational guys” to be at the bargaining table, he said.

TFI’s acquisition of UPS Freight, which closed a year ago almost to the day, brought about 14,000 UPS Freight employees, including 11,500 Teamster members, into the TFI fold. The current five-year contract expires July 31, 2023.

The Teamsters generally don’t negotiate contracts based on geographic concerns. While the main, or master, UPS contract covering more than 300,000 small-package workers includes supplemental contracts that are negotiated at regional levels, there is virtually no wage variation based on worker geography, said Ken Paff, head of national organizing for the Teamsters for a Democratic Union, a Teamsters dissident group.

“I don’t see the [Teamsters] agreeing to different wages in different areas across the board,” Paff said in an email Friday.

The Teamsters did not respond to requests for comment.

Bédard’s comments came as TFI reported strong first-quarter results. Adjusted diluted earnings per share came in at $1.68, well above the consensus estimates of $1.30 a share. Operating income more than doubled year-over-year to $219.8 million. Revenue including nearly $300 million from fuel surcharges nearly doubled to $2.2 billion. The LTL segment contributed $835.4 million in revenue and $94.8 million in operating income.

TFI entered 2022 in the best shape in its history, Bédard told analysts. 

Shares fell 3.6% amid a massive downdraft in U.S. equity prices. TFI shares have been on a roller coaster since the year began. Shares have been hit by three separate sell-offs; the most recent and severe has taken down share prices to $80.44 a share from around $111 a share five weeks ago.

Bascome Majors, an analyst for Susquehanna Investment Group, said the recent declines present a compelling buying opportunity. TFI “remains attractively priced for what it is: a high-quality diversified North American transportation business. But more importantly, shares are super-cheap for what they could be, as capital allocation should be deeply accretive over time as M&A opportunities and value in TFI’s own stock present themselves into a potential freight recession.” 

Majors has a 12-month target price of $112 per share.

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Mark Solomon

Formerly the Executive Editor at DC Velocity, Mark Solomon joined FreightWaves as Managing Editor of Freight Markets. Solomon began his journalistic career in 1982 at Traffic World magazine, ran his own public relations firm (Media Based Solutions) from 1994 to 2008, and has been at DC Velocity since then. Over the course of his career, Solomon has covered nearly the whole gamut of the transportation and logistics industry, including trucking, railroads, maritime, 3PLs, and regulatory issues. Solomon witnessed and narrated the rise of Amazon and XPO Logistics and the shift of the U.S. Postal Service from a mail-focused service to parcel, as well as the exponential, e-commerce-driven growth of warehouse square footage and omnichannel fulfillment.

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