ABF to withdraw from National Master Freight Agreement

ABF Freight System, Inc., one of the nation's largest less-than-truckload (LTL) carriers, is withdrawing from the National Master Freight Agreement (NMFA), the pact that governs relations between trucking management and the Teamsters Union.

In an Aug. 13 letter sent to Teamsters president James P. Hoffa and Gordon Sweeton, head of the union's freight division, Fort Smith, Ark.-based ABF said it will terminate its participation in the labor agreement upon its expiration on March 30. In the letter, ABF President and CEO Roy M. Slagle said the carrier wants to negotiate a new and separate collective bargaining agreement that would be applicable only to ABF. Slagle said ABF is "prepared to commence negotiations" with the Teamsters as soon as possible.

Teamster officials were unavailable to comment at press time.

ABF's move would affect about 7,000 unionized employees. It would also leave archrival YRC Worldwide Inc. as the only major trucking company still covered by the agreement. In the mid-1960s, when unionized trucking was at the peak of its power, the NMFA covered approximately 400,000 workers. However, trucking bankruptcies, consolidations, and a dramatic shift to nonunion labor have decimated NMFA membership over the decades.

The August 13 letter affirms ABF's long-held belief that an industry-wide labor compact is no longer in its best economic or legal interest. Three weeks ago, a federal district judge in Arkansas dismissed ABF's charge that YRC and the Teamsters violated the tenets of the NMFA by negotiating three separate concessionary agreements in 2009 and 2010 to keep YRC afloat. ABF had alleged that the agreements were illegally negotiated outside the NMFA and left ABF at an unfair cost advantage. ABF had proposed similar concessions to its own rank-and-file but was rebuffed.

After the latest legal setback on Aug. 1, ABF was advised by some analysts to forego any further courtroom maneuvering in favor of pursuing an acceptable outcome at the bargaining table. David G. Ross, transport analyst for Stifel, Nicolaus & Co. wrote at the time that ABF's "money and energy is better spent getting the best contract" rather than fighting what had always been an uphill legal battle.

Analysts have said that ABF, whose labor costs are the highest of any LTL carrier, will find it hard to remain competitive until it gets those costs under control.