By Michael G. Malloy, Staff Reporter This story appears in the Nov. 4 print edition of Transport Topics.
The Teamsters union last week approved the final outstanding supplement to a national five-year labor contract with Arkansas Best Corp.’s ABF Freight System unit, making the agreement’s full ratification official.
The contract between less-than-truckload unit carrier ABF and the Teamsters took effect Nov. 3 and will run through March 31, 2018.
The final local deal to be ratified was the Central Region Local Cartage Supplement, covering about 1,900 drivers, dock workers and other employees in the Midwest.
“We are pleased that this final step in our lengthy contract negotiation process is now complete,” Judy McReynolds, Arkansas Best’s president, said in an Oct. 30 statement. “This new labor agreement follows several years of sacrifice from our nonunion employees, [and] we are grateful that our union employees have also recognized the need for ABF Freight to operate much more efficiently.”
The agreement includes a 7% wage reduction, but that cut will be recouped over the life of the agreement with incremental annual wage increases, the Teamsters said in a statement.
It also provides for bonuses if ABF reaches certain operating performance standards, requires the company to continue participating in the same health, welfare and pension programs and provides for contribution increases in order to maintain benefit levels retroactive to Aug. 1.
ABF estimated the contract, which covers an estimated 7,500 Teamsters employees, will save the company between $55 million to $65 million annually.
The approval of the final supplement came after the members first voted against authorizing a strike.
“We arrived at a point where . . . [there was] no desire for a strike,” Gordon Sweeton, co-chairman of the Teamsters’ negotiating committee, said. “The responsible course of action [was] to finalize the agreement.”
While the contract is a significant step toward restoring ABF to its historic profitability, there is more work to be done in the highly competitive LTL marketplace, said Roy Slagle, ABF’s CEO.
“This is just one of several initiatives that we are focused on as we continuously look for ways to improve the efficiency of national operations on behalf of our customers,” Slagle said in the company’s statement.
In a separate development, YRC Worldwide Inc. said last week that it will meet Nov. 5 with Teamsters representatives to discuss “corporate refinancing opportunities and the need to proactively align multiple stakeholders in advance of 2014 debt obligation deadlines.”
