ABF Freight, the less-than-truckload (LTL) unit of ArcBest Corp., and the Teamsters union will exchange initial proposals on Dec. 18 and 19 for a new collective bargaining agreement covering about 8,600 unionized employees, ArcBest said today.
Negotiations to reach an agreement will begin the week of Jan. 7, Fort Smith, Ark.-based ABF said. The current five-year compact expires March 31.
The last round of contract talks was a tense, eight-month affair that required three one-month extensions beyond the original March 31, 2013 expiration date. ABF's rank-and-file ratified the 2013 compact by a slim 52 percent margin.
The compact called for an immediate 7-percent wage reduction recouped in increments over the life of the contract. For the first time, ABF was allowed to subcontract out roadwork, though the practice was capped to the equivalent of 6 percent of its total miles. The agreement afforded the company flexibility on work rules by expanding functions that could be handled across job classifications. It also eliminated one week of workers' vacation. All union health, welfare, and pension benefits in place at the time were retained.
A possible bone of contention will be the relationship between ABF, which remains ArcBest's largest unit, and the parent's nonunion, asset-light logistics business. An asset-light carrier effectively controls its own capacity without employing drivers or owning equipment. At the time of the 2013 contract ratification, ABF accounted for about 80 percent of the parent's revenues. Based on the parent's third quarter 2017 results, ABF accounted for about 68 percent of overall revenue.
Some ABF Teamsters believe that ArcBest, in an effort to reduce costs by taking business away from its unionized unit, routes freight from ABF to its logistics units, in particular Panther Expedited Trucking, an asset-light expedited service provider that ArcBest's forerunner company, Arkansas Best Corp., acquired in 2012 for $180 million. In a post from March on a website called "Old School Teamsters," a poster believed to be a veteran ABF driver alleged that the parent provides Panther with shipments so it can reduce Panther's empty miles, while at the same time taking business away from ABF and forcing the unit to pay premium prices for expedited deliveries.
ArcBest Spokeswoman Kathy Fieweger disputed the claim that freight has been routed from ABF to Panther, or that Panther has taken away traffic that would normally move via ABF. "In fact, the ability to bring total logistics solutions to the table for customers results in ABF Freight getting more freight than an LTL-only solution, as we have said many times in our earnings releases and conferences calls," Fieweger said in an e-mail. She noted that ABF's revenue has increased since the 2013 contract was ratified.
In 2015, ArcBest executives said that the company planned to derive about 45 percent of total revenue from non-LTL operations by 2018.