DC Velocity - June 2010

newswor thy

Teamsters at ABF reject wage deal

TEAMSTERS UNION MEMBERS AT less-than-truckload (LTL) carrier ABF reight System have rejected a pro- posed agreement calling for a 15- percent wage cut over the next hree years, leaving ABF at a signif- icant cost disadvantage to rival YRC Worldwide Inc. and forcing union leaders and management who had negotiated the deal to scramble for alternatives to keep ABF’s cost structure competitive with the industry. The agreement went down to defeat by a 56-44 percent margin, with 3,764 voting to reject the pact and 2,936 voting in favor of it, according to results released May 24. About 80 percent of ABF’s approximately 7,000 unionized employees cast ballots.

Two major Chicago locals as well as locals in Atlanta, Dallas, and Little Rock, Arkansas (ABF’s home state) cast votes decisively against the proposed agreement, according to the Teamsters for a Democratic Union (TDU), a Teamster dissident group that has opposed the pact.

In return for agreeing to the wage concessions, ABF workers would have received extra payments on a quarterly basis if ABF’s operating ratio reached what the company called “certain, profitable levels.” It is believed the concessions would have saved Arkansas Best Corp., ABF’s parent, about $70 million a year.

“It is unfortunate that our union employees have chosen not to
participate in better aligning ABF’s cost structure with those of its
LTL competitors,” said Judy R. McReynolds, Arkansas Best’s presi-
dent and CEO, in a statement. McReynolds said the company would
evaluate its options in “dealing with our cost structure and the other
issues we face during this challenging freight environment.”
“We took a proactive approach to help ABF get through the worst
economic recession since the Great Depression, but our members
have rejected the plan,” said Tyson Johnson, director of the
Teamsters’ National Freight Division. “The union will regroup to
determine if there are other means to protect jobs and benefits. Our
first priority continues to be the members’ best interests.”
Ken Paff, head of the TDU dissident group, said he had expected
ABF’s rank and file to reject the deal. Paff said the margin of defeat is
such that a re-vote would be unlikely to change the outcome. p. 20

study: Intermodal share
of long-haul freight at
record high

In a sign railroads continue to capture long-haul freight market share from over-the-road trucks, intermodal’s share of surface transport traffic reached record highs in the first quarter, according to a study released May 10 by consultancy FTR Associates.

According to FTR’s estimates, the share of all intermodal movements— both trailer and container moves of 550 miles and longer—reached 13. 5 percent in the first quarter, up from 13. 1 percent in the fourth quarter of 2009 and the fourth consecutive quarterly share gain.

Intermodal “was hitting on all cylinders during the first quarter,” said Lawrence Gross, senior consultant for Nashville, Ind.-based FTR and author of the report.

Gross said intermodal’s domestic share resumed growing after a pause in the fourth quarter of 2009, continuing an upward trend that began nearly three years ago. At the same time, international intermodal movements have rebounded from a prolonged downturn and are growing at a faster rate than the long-haul truck sector, Gross said.

The data also indicate that railroads are recapturing traffic that previously had been moving from Asia to the United States in all-water routings via the Panama Canal, Gross said.

Intermodal should continue to benefit from a recent uptick in diesel fuel prices, a continued recovery in international shipments, and a shortage of truck capacity and drivers as a long-awaited rebound in freight demand outstrips the available supply of over-the-road trucks, Gross said.