By Rip Watson, Senior Reporter This story appears in the April 1 print edition of Transport Topics.
ABF Freight System’s contract talks with the Teamsters union last week were extended 30 days beyond a March 31 contract deadline, the company announced, as continued progress was reported.
The less-than-truckload carrier said talks will resume during the week of April 8, and in a Web posting reassured customers “it remains business as usual while talks continue.”
Elsewhere on the labor front, there were signs that Teamsters’ talks with UPS Inc. were moving slowly after a union-sponsored conference call with shop stewards.
After indications from the March 23 event that the union believes the parties are far apart on wage and benefit issues, a March 28 Teamsters statement said talks would be recessed until April 15. A union statement said a new UPS health-care proposal was being evaluated. UPS’ Teamsters contract expires July 31.
There hasn’t been an LTL strike since 1994, and the union’s latest job action against UPS was in 1997.
ABF, based in Fort Smith, Ark., is pressing for reductions in the industry’s highest costs, indicating it will have to close terminals and distribution centers without those savings.
Rival YRC, the only other major unionized LTL carrier, has enjoyed a 15% wage reduction for four years that the union accepted in exchange for an ownership stake. ABF’s rank-and-file Teamsters, whose numbers top 7,000, rejected a similar wage reduction in 2010.
Before the March 28 announcement, ABF maintained more than three weeks of silence. A March 4 announcement had hinted an extension was possible if the two sides continued to make progress.
“The two sides are going to have to meet in between,” said Jason Seidl, an analyst for Cowen Securities, who noted continued animosity created by ABF’s ongoing lawsuit against the union and YRC Worldwide Inc.
ABF, which has yet to prove its claim of contract violations that cost the company $750 million, gets its next chance to make its case on April 10 before the 8th U.S. Circuit Court of Appeals.
Satish Jindel, who heads SJ Consulting, also doesn’t expect a strike.
He said he believes ABF’s issues extend beyond labor.
“The union has to see that the company has kept costs down,” Jindel said.
ABF has the lowest number of shipments per day of 25 carriers that provide freight information to his firm, he told Transport Topics.
“I don’t think ABF has done a very good job of growing their business,” Jindel said. “The drivers are being penalized because the salesmen can’t fill the trucks.”
Seidl said there was no apparent sign that shippers were steering away from ABF because of potential disruptions.
“Despite all the fears in the marketplace that ABF would start bleeding business to other carriers, we really haven’t seen it,” he said.
Seidl said companies such as Old Dominion Freight Line and Saia have indicated their improving 2013 freight volumes are in markets that shorten their average length of haul. ABF, on the other hand, is primarily a longhaul carrier.
UPS didn’t comment on its union talks.
“The two parties remain miles apart on health care, wages and benefits,” Justin Yagerman, an analyst for Deutsche Bank, said in a report about the union call.
Yagerman said in his report that the company wants health-care co-pays opposed by the union. On the wage front, his report said the union generally wants a $1 hourly hike, far above the UPS offer.
