Only days after the International Brotherhood of Teamsters (IBT) announced that 95 percent of its voting members had voted to authorize a strike, the union and the nation's largest unionized motor carriers averted the threatened stoppage and agreed on a new five-year contract.
Though the contract had not received final approval at press time, there seemed little doubt that it would get the go-ahead from members. Representatives from Teamsters freight union locals unanimously approved the agreement at a meeting in Chicago on Feb. 19. The final step is a vote by union members, who received ballots early this month.
The settlement on a new National Master Freight Agreement, which applies to ABF Freight System, Roadway Express, USF Holland and Yellow Transportation, was announced at a press conference on Feb. 6. Those four carriers represent 80 percent of the Teamsters covered by the National Master Freight Agreement (NMFA). Reaching an early pact with the Teamsters—the agreement was announced almost two months before the current contract expires—was especially important to management of the unionized less-than-truckload (LTL) carriers,who feared shippers would start to shift freight to other carriers as a precaution if the talks stretched into March.
That tentative pact, taken together with the United Parcel Service/Teamsters pact signed last year and the West Coast port contract reached in November, is expected to usher in a relatively peaceful period between labor and the transport sector—good news in a sluggish economy.
Both sides appear pleased with the agreement, at least publicly.
"We have reached an agreement that gives our companies the tools to provide expanded service offerings, provides job security for our employees and ensures uninterrupted service to our customers," says Tim Lynch, president and CEO of the Motor Freight Carriers Association (MFCA). MFCA is the national trade association representing the unionized general freight carriers. Its Trucking Management Inc. division represents the four companies in the NMFA negotiations with the IBT.
The unanimous approval by union locals, along with the relative quiet among Teamster General President James Hoffa's often vocal critics, suggests that union members like the pact as well.
According to the Teamsters, the total value of the tentative agreement is 1.7 billion. The average wage and benefits increase is 3.4 percent over the term of the agreement. The contract ensures that members will have no health care co-pays for the full five years and includes a cost of living adjustment of a penny per hour for every 0.2-percent rise in the consumer price index over 3 percent.
The contract also contains assurances that the motor carriers will not subcon tract work to Mexican carriers, according to the Teamsters, and it includes a reduction in the percentage of freight carriers can ship by intermodal rail to 26 percent from 28 percent. It also restores the union's right to strike over deadlocked national grievances.
"From the Teamsters' perspective, it looks like a pretty good contract," says Michael Belzer, an associate professor at Wayne State University in Michigan. Belzer, who is a long-time observer of the trucking industry, adds, "They got some reasonable wage increases, they got some reasonable contributions to pensions, and [they got] a small reduction in the freight that can be [moved via rail]." Belzer speculates that the carriers were willing to make concessions on intermodal rail volume because longstanding reliability problems with rail service probably limited their use of that option anyway.
Belzer said he had not reviewed the contract in detail, but he expressed surprise that the union had won the right to strike over deadlocked grievances. "Top managem ent was glad to have had that [immunity from a strike]," he says. "They may have come to the conclusion that in a sense it doesn't matter—that's a guess." Since the union last struck the LTL carriers in 1994, both sides have tried to resolve disputes under Article 20 of the contract before reaching an impasse.
Taking a hit
But even with the contract settled, the unionized LTL sector still faces some serious issues. "The challenge that the Teamsters and the carriers face is the declining portion of the industry that is unionized," Belzer says.Although compensation for drivers working for non-union carriers is comparable to pay for union drivers, non-union carriers have lower costs in other areas.
One of those areas is the cost of health and pension plans. Though all industries have seen their pension plans decimated by the stock market's collapse, the Teamsters and Teamster carriers have taken another kind of hit as well—a drastic drop in the number of employees paying into their pension plan. Belzer points out that last year's collapse of Consolidated Freightways alone took 14,500 payers out of the plan.