LTL Fleets Open Talks With Teamsters for New Pact
By Daniel P. Bearth, Staff Writer
This story appears in the Oct. 15 print edition of Transport Topics.
Contract talks between the Teamsters union and representatives of the nation’s largest less-than-truckload freight carrier began Oct. 1 with representatives of both sides indicating a desire to secure an early agreement.
Negotiations got under way one day after the Teamsters and UPS Inc. reached a tentative five-year deal covering about 230,000 UPS parcel workers. That agreement includes a key provision that allows UPS to pull out of the Teamsters’ largest pension fund (10-8, p. 1).
Teamsters spokesman Galen Munroe said union negotiators will deal first with Trucking Management Inc., the bargaining group representing three LTL freight carriers owned by YRC Worldwide, and then will bargain separately with ABF Freight System.
Last month, the head of the Teamsters freight division said a new contract could be completed by the end of October (9-10, p. 32).
ABF spokesman David Humphrey said discussions with the Teamsters so far have been “informal and mostly preliminary.”
“We are ready to begin negotiations and hope to have the agreement concluded well before our current labor contract expires on March 31,” he said.
Executives of YRC and ABF were not available to comment for this story.
ABF, the nation’s second-largest unionized LTL carrier, is expected to press the Teamsters to allow the company to follow the lead of UPS and withdraw from the Central States Health & Welfare and Pension Funds, based on previous comments by company officials.
TMI acts as the bargaining agent for trucking management on the terms of a National Master Freight Agreement covering approximately 95,000 unionized workers, of which 80,000 are employed by YRC companies or ABF. Most other unionized carriers historically accept whatever terms are negotiated by TMI.
There are indications, however, that ABF may not get the same deal as UPS did, according to Teamsters for a Democratic Union, a dissident group within the union that opposed the withdrawal by UPS from Central States.
Teamsters Freight Director Tyson Johnson told local union leaders in mid-September that the union will “not allow any carrier to split from any Teamsters pension plan,” according to TDU officials.
TDU officials said they did not expect YRC’s companies to petition for pension withdrawal.
The Teamsters’ Munroe said initial talks with TMI have fo-cused on terms of supplemental agreements and that an exchange of national proposals, which would include proposals on wages and benefits, will take place in November.
Munroe did not comment directly on the issue of pension withdrawal, but said that in surveys, members said they “want their pensions and health care protected,” along with increased job security.
The Teamsters’ deal with UPS, which members must ratify, requires the company to pay
$6.1 billion to Central States to cover the estimated vested benefit liabilities of current beneficiaries. Central States is the largest of more than two dozen multi-employer pension and benefit plans that are jointly administered by the Teamsters union and em-ployer representatives.
Some of those multi-employer plans are seriously underfunded, said Herve Aitken, a lawyer who specializes in pension issues at the law firm of Ford & Harrison in Washington, D.C. “This places a large contingent liability on each contributing company.”
UPS said it plans to replace the contributions it makes to Central States with a company-funded benefits and retirement plan for about 44,000 of its workers. The company will continue to contribute to 20 other Teamsters plans on behalf of other employees.
YRC Chairman Bill Zollars, in an Oct. 1 statement, said the cash infusion from UPS would improve the financial condition of Central States and therefore reduce the risk associated with contingent pension obligations.
YRC’s unionized subsidiaries include longhaul LTL carriers Yellow Transportation and Roadway and regional carriers USF Holland and New Penn Motor Express.
New Penn President Steven Gast said his company signed an interim agreement with the Teamsters on Sept. 10, agreeing to whatever terms are eventually negotiated by TMI.
“The agreement . . . neutralizes the scare tactics being used by competitors [and] removes any concerns about the ability of New Penn to provide uninterrupted service to our customers,” Gast said in a letter to Transport Topics.
Central States Executive Director Tom Nyhan, in a bulletin Oct. 4, addressed concerns of pension beneficiaries about the financial impact of the UPS withdrawal and new federal pension regulations that take effect Jan. 1.
With the lump-sum payment from UPS and the transfer of some early-retirement liabilities to a company-funded pension plan, Nyhan said the pension fund’s funding ratio, or the percentage of liabilities covered by assets, should exceed 70% as of Jan. 1 “and may reach 75% if we meet our actuarial assumptions.”
Under the Pension Protection Act of 2006, multi-employer plans must increase contribution rates from employers if funding falls below 80% and must halt benefit increases if funding falls below 65%.
Central States raised employer contribution rates by 7% in 2006 and 8% in 2007 for new labor contracts and, according to Nyhan, those increases will be enough to avoid benefit cuts.
This story appears in the Oct. 15 print edition of Transport Topics.
Contract talks between the Teamsters union and representatives of the nation’s largest less-than-truckload freight carrier began Oct. 1 with representatives of both sides indicating a desire to secure an early agreement.
Negotiations got under way one day after the Teamsters and UPS Inc. reached a tentative five-year deal covering about 230,000 UPS parcel workers. That agreement includes a key provision that allows UPS to pull out of the Teamsters’ largest pension fund (10-8, p. 1).
Teamsters spokesman Galen Munroe said union negotiators will deal first with Trucking Management Inc., the bargaining group representing three LTL freight carriers owned by YRC Worldwide, and then will bargain separately with ABF Freight System.
Last month, the head of the Teamsters freight division said a new contract could be completed by the end of October (9-10, p. 32).
ABF spokesman David Humphrey said discussions with the Teamsters so far have been “informal and mostly preliminary.”
“We are ready to begin negotiations and hope to have the agreement concluded well before our current labor contract expires on March 31,” he said.
Executives of YRC and ABF were not available to comment for this story.
ABF, the nation’s second-largest unionized LTL carrier, is expected to press the Teamsters to allow the company to follow the lead of UPS and withdraw from the Central States Health & Welfare and Pension Funds, based on previous comments by company officials.
TMI acts as the bargaining agent for trucking management on the terms of a National Master Freight Agreement covering approximately 95,000 unionized workers, of which 80,000 are employed by YRC companies or ABF. Most other unionized carriers historically accept whatever terms are negotiated by TMI.
There are indications, however, that ABF may not get the same deal as UPS did, according to Teamsters for a Democratic Union, a dissident group within the union that opposed the withdrawal by UPS from Central States.
Teamsters Freight Director Tyson Johnson told local union leaders in mid-September that the union will “not allow any carrier to split from any Teamsters pension plan,” according to TDU officials.
TDU officials said they did not expect YRC’s companies to petition for pension withdrawal.
The Teamsters’ Munroe said initial talks with TMI have fo-cused on terms of supplemental agreements and that an exchange of national proposals, which would include proposals on wages and benefits, will take place in November.
Munroe did not comment directly on the issue of pension withdrawal, but said that in surveys, members said they “want their pensions and health care protected,” along with increased job security.
The Teamsters’ deal with UPS, which members must ratify, requires the company to pay
$6.1 billion to Central States to cover the estimated vested benefit liabilities of current beneficiaries. Central States is the largest of more than two dozen multi-employer pension and benefit plans that are jointly administered by the Teamsters union and em-ployer representatives.
Some of those multi-employer plans are seriously underfunded, said Herve Aitken, a lawyer who specializes in pension issues at the law firm of Ford & Harrison in Washington, D.C. “This places a large contingent liability on each contributing company.”
UPS said it plans to replace the contributions it makes to Central States with a company-funded benefits and retirement plan for about 44,000 of its workers. The company will continue to contribute to 20 other Teamsters plans on behalf of other employees.
YRC Chairman Bill Zollars, in an Oct. 1 statement, said the cash infusion from UPS would improve the financial condition of Central States and therefore reduce the risk associated with contingent pension obligations.
YRC’s unionized subsidiaries include longhaul LTL carriers Yellow Transportation and Roadway and regional carriers USF Holland and New Penn Motor Express.
New Penn President Steven Gast said his company signed an interim agreement with the Teamsters on Sept. 10, agreeing to whatever terms are eventually negotiated by TMI.
“The agreement . . . neutralizes the scare tactics being used by competitors [and] removes any concerns about the ability of New Penn to provide uninterrupted service to our customers,” Gast said in a letter to Transport Topics.
Central States Executive Director Tom Nyhan, in a bulletin Oct. 4, addressed concerns of pension beneficiaries about the financial impact of the UPS withdrawal and new federal pension regulations that take effect Jan. 1.
With the lump-sum payment from UPS and the transfer of some early-retirement liabilities to a company-funded pension plan, Nyhan said the pension fund’s funding ratio, or the percentage of liabilities covered by assets, should exceed 70% as of Jan. 1 “and may reach 75% if we meet our actuarial assumptions.”
Under the Pension Protection Act of 2006, multi-employer plans must increase contribution rates from employers if funding falls below 80% and must halt benefit increases if funding falls below 65%.
Central States raised employer contribution rates by 7% in 2006 and 8% in 2007 for new labor contracts and, according to Nyhan, those increases will be enough to avoid benefit cuts.
