Tuesday, September 3, 2013

US Road Haulage Case Dismissed as Trucking Companies and Teamsters Row Continues

Court Again Rejects Unfair Competition Claim
Shipping News Feature

US – With a whiff of Charles Dickens’ Jarndyce vs Jarndyce, the legal suit raised by trucking group ABF Freight System against rival road haulage outfit YRC and the International Brotherhood of Teamsters, has been yet again dismissed by the Courts. The case has run and run as detailed in our previous article earlier this year and now the largest subsidiary of the Arkansas Best Corporation must retire to lick wounds and consider its next step. At a time when anti-trust authorities seem keen to punish any trace of unfair competition this case will be studied closely by many in the supply chain.

ABF claims YRC’s agreement with the Teamsters violated the National Master Freight Agreement, supposedly designed to provide a level playing field for all trucking companies in terms of wages and conditions offered to the union’s staff. By offering a deal costing less than the union were prepared to agree to with any other haulier ABF Freight says that YRC was able to trade on terms impossible to equal by any other unionised company.

This current round of Court action took place in the federal U.S. Court of Appeals for the Eighth Circuit and accused the union of violating the national agreement by three times granting concessions to YRC Worldwide in order to prevent the company’s bankruptcy. In March, YRC apparently approached ABF with a plan to combine less than truckload (LTL) services. The two companies are the only independent carriers with large unionised fleets operating in the consolidated road freight market. ABF apparently refused the offer outright.

Since the YRC/Teamster deal ABF has consistently lost money, around $8.5 million for the first six months of this year alone and meaning over $15 million in 18 months of losses since a successful 2011, a deterioration the company has vociferously blamed on costs higher than that of YRC. Following the Court judgement ABF announced it had reached another contract extension to the end of this month (September 2013) ‘as the two parties work through the process for resolving the two remaining supplemental agreements to the ABF National Master Freight Agreement’. This means ABF is trying to gain preferential terms from the Teamsters to match their rivals and most of the details for a new five year employment deal were approved by the Teamsters in June. ABF insist that these negotiations are an entirely separate issue.

The result is likely to be that the 10,000 or so ABF staff agree to more flexible working conditions, specifically schedules and responsibilities for individuals that are less restrictive than at present. The key factor is likely to be the anticipated wage cut of around 7%. In the meantime ABF issued a statement regarding the future of a case which began in 2010 after the implementation of the national agreement just two years previously, saying:

“ABF is disappointed in the court’s ruling and the fact that YRC received three rounds of concessions from the IBT that ABF did not also receive. ABF is assessing the opinion and determining whether to pursue additional options.”