ABF Freight System, Inc., sent a letter to James P. Hoffa, president of Teamsters Union and Gordon Sweeton the head of the freight division, that they will be withdrawing from the National Master Freight Agreement (NMFA). ABF, which is one of the largest less-than-truckload or LTL carriers in the country has signified in a letter dated August 13 that they will be withdrawing from the pact which governs trucking management and Teamsters Union relations. This move has a basis from ABF’s perspective but also has a great effect not only to them but their rivals and employees as well.
ABF to Negotiate with Teamsters Union
Roy M. Slagle, president and CEO of ABF has decided to terminate their participation on its expiration date on March 30 regarding labor agreements. He has signified their interest to negotiate a new collective bargaining agreement which is separate and will only be applicable to ABF. In Slater’s words, they are “prepared to commence negotiations” with Teamsters Union the soonest possible date.
However, officials from Teamsters were not able to give their response regarding the letter from ABF as of press time.
The National Master Freight Agreement
This decision made by ABF would make their rival trucking company, YRC Worldwide Inc., the only major trucking company under the NMFA. It would also affect their unionized employees which are around 7,000 in number. NMFA covered around 400,000 employees during the peak of the trucking industry in the mid-1960’s.
As a result of consolidations and trucking bankruptcies, the NMFA has experienced a decimated number of members. A great shift from union to nonunion labor has also been an added factor to the overall decrease of membership the NMFA has experienced over the years.
The August 13 letter made it known that ABF is now ready to negotiate their own agreements and has affirmed what the ABF has long believed in; that labor compacts on an industry-wide level are no longer needed and that such arrangements no longer serve their legal or economic interests. ABF filed charges against YRC and the Teamsters for violation of the tenets of the NMFA. Charges were filed because YRC and the Teamsters Union were said to have negotiated three separate concessionary agreements to keep YRC afloat in 2009 and 2010. A federal district judge dismissed this charge from ABF three weeks ago in Arkansas.
Alleged Talks Outside the NMFA
Alleged claims from ABF that illegally negotiated agreements were made outside the NMFA and these agreements made ABF stand at an unfair cost advantage. Similar concessions were proposed by ABF but these were rebuffed.
ABF faced their latest legal hindrance on the first of August and was given advice by some analysts to antedate further courtroom procedures in to go after more favorable outcome. “Money and energy is better spent getting the best contract” instead of fighting a legal battle which had been arduous from the start according to David G. Ross, Stifel, Nicolaus & Co.’s transport analyst.
According to analysts, ABF will have a hard time remaining competitive until they get their labor costs, which are the highest among LTL carriers, under control.