Less-than-truckload (LTL) carrier ABF Freight System Inc. and the Teamsters Union said they expect to begin contract negotiations on Dec. 18 for what is expected to be one of the most important labor agreements in ABF's nearly 80-year history.

The current collective bargaining agreement, known as the National Master Freight Agreement (NMFA), expires on March 31, 2013. ABF has said it will no longer be a part of the NMFA and will bargain separately with the Teamsters. The current contract covers about 7,800 ABF Teamster employees.

ABF faces some of the highest, if not the highest, labor costs in the trucking industry. It competes mostly with nonunion carriers, while its chief unionized LTL rival, YRC Worldwide Inc., has won separate labor concessions from the Teamsters that ABF charges has provided YRC with a distinct and unfair cost advantage. ABF attempted to wring similar benefits from its unionized workers but was rebuffed.

ABF first sued in November 2010, alleging YRC's agreements with the Teamsters were illegally negotiated outside the auspices of the NMFA. ABF asked that the agreements be voided and that YRC's cost structure be returned to NMFA status. Separately, ABF sued YRC and the Teamsters for $750 million in damages.

However, a federal judge in Arkansas has twice dismissed ABF's complaint. Despite the setbacks, the company continues to pursue appeals.

Analysts have said ABF needs to bring down its labor costs if it is to remain competitive in an industry dominated by nonunion rivals.