A new 63-month contract representing 8,200 Teamsters union members employed at less-than-truckload (LTL) carrier ABF Freight System will take effect this Sunday after the ABF rank-and-file ratified all local and regional agreements known as "supplementals," the union and ArcBest, ABF's parent, said today.
The national or "master" contract is retroactive to April 1 and runs through June 30, 2023. The company and Teamster union leaders reached a tentative contract agreement in March. The rank-and-file ratified the national contract in mid-May. The master contract could not go into effect without all supplementals being ratified.
Under the agreement, ABF Teamsters will receive annual wage increases totaling $2.00 an hour over the contract's life; the wage increases are retroactive to July 1. One week of vacation time that was conceded by the members in the 2013 contract has been restored. Each full-time employee will receive a $1,000 ratification bonus, while each so-called casual employee, or a worker given work when it's needed with no guarantee of future labor, will receive a $500 bonus.
Contributions to multiemployer pension plans, a bone of contention during the negotiation process, are to remain at current rates for each ABF pension fund. A wide pension contribution gap exists between ABF and its main unionized rival, YRC Worldwide, Inc. ABF executives have said the differential presents a cost headwind in competing against YRC.
The agreement makes changes to language covering the use of purchased transportation, or transportation services outsourced to non-ABF drivers. The company said in a statement announcing the agreement that the language provides "certain protections" for ABF's drivers. It did not elaborate.
The contract calls for profit-sharing bonuses to kick in whenever ABF achieves an operating ratio of 96 percent or below for a full calendar year. An operating ratio is the ratio of revenues over expenses. In 2017, ABF posted an operating ratio of 97.2 percent.
In the statement, Judy R. McReynolds, Fort Smith, Ark.-based ArcBest's chairman, president and CEO, called the agreement a "positive step forward" for the company. "Our goal was to achieve a contract that was fair to employees and affordable for the company," McReynolds said. The Teamsters issued a brief statement announcing the news. The statement did not offer up any comments from union officials.
Teamster Local 25, the Boston-based local whose president, Sean M. O'Brien, was an outspoken opponent of the agreement, made no mention of the most recent developments on its website. The dissident group Teamsters for a Democratic Union (TDU), which also had a dim view of some of the contract's proposed language, did not post any comment on its website.
Though the rhetoric became heated at times, the process of negotiation and ratification was a far cry from 2013 when about 1,800 workers in the Midwest refused to sign off on their local supplements. The main contract had been ratified in June, but all supplements weren't ratified until that October.
At the time, the members threatened to authorize a strike vote, which union leaders warned could cause such a disruptive ripple effect that ABF might be forced to shut down. The members refused to do so, however, clearing the way for the supplements to be ratified and the contract to take effect.