Wednesday, May 26, 2010

US Less Than Truckload Freight Haulier Sees Union Offer Rejected

ABFS Face an Uncertain Future as Teamsters Members Turn Them Down
Shipping News Feature

US - The spectre of over supply in the less than truckload (LTL) market still hangs above a sector of the freight industry as evidenced by the refusal of unionised staff employed by LTL carrier Arkansas Best Freight System (ABFS) of the company’s revised employment terms, designed to preserve jobs. This, despite support from the Teamsters Union National Freight Division, which actively encouraged acceptance of the deal by its members.

Last year saw a similar situation for competitors YRC Worldwide Inc when, as reported here in November, a resolution to the same scenario saw acceptance of a plan by union members. The revised ABF contracts offered to maintain health and welfare benefits and ring fence pensions but involved a 15% pay and mileage reduction. Around 80% of those eligible to vote reportedly did so, with 56% of voters rejecting the offer.

“We took a proactive approach to help ABF get through the worst economic recession since the Great Depression, but our members have rejected the plan,” said Tyson Johnson, Director of the Teamsters National Freight Division. “The union will regroup to determine if there are other means to protect jobs and benefits. Our first priority continues to be the members’ best interests.”

This latest setback leaves the haulier in a parlous state, losses for the past six consecutive quarters and shares down over 15% after news of the rejection came out. US analysts say that ABFS have the highest cost structure of all the major LTL carriers and that even tougher times are ahead, but workers point out funds are apparently still available to the company and they are being asked to stump up prematurely to preserve shareholders profits.

Meanwhile negotiations between the Teamsters and YRC continue with the formation of a joint committee to work out the company’s rejoining of the Union pension plan with a parallel team to study YRC’s trading situation after last years problems. The Teamsters were allowed a directorship of the Kansas based trucking company after reaching agreement on terms last year. Doubts remain that the group have recovered sufficiently as yet to begin contributions to the pension plan for its 35,000 union members as scheduled for the New Year.