ABF | Teamsters-ABF pact would boost LTL wages, limit driverless technology

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Teamsters-ABF pact would boost LTL wages, limit driverless technology​

Under the tentative deal, Teamsters driving for ABF will receive a $3.50-per-hour raise on July 1, and an additional $6.50 per hour over five years. Photo credit: Jonathan Weiss / Shutterstock.com.
William B. Cassidy, Senior Editor | Jun 16, 2023, 3:19 PM EDT




International Brotherhood of Teamsters leadership is endorsing a tentative agreement with ABF Freight System that would give union employees at the less-than-truckload (LTL) carrier a significant pay raise, as well as assurances that ABF won’t deploy driverless technology without the consent of the union.


The tentative contract includes a $3.50-per-hour — 8.75 cents per mile — raise effective July 1 and a $6.50-per-hour — 16.25 cents per mile — wage increases over the life of the five-year deal, according to an 8-K filing from ABF with the US Securities and Exchange Commission.


“The first year alone increases wages more than the entire five years combined in the last contract,” which hiked wages $2 per hour, the union said in a statement Thursday.


The contract also keeps in place a profit-sharing bonus that would increase in size as ABF’s annual operating ratio decreases, rising to 4% if the operating ratio falls to 87% or below. ABF said it gave its union employees a 3% contractual bonus based on its operating ratio in 2022.


The contract also limits — and in some cases prohibits — the use of technology such as driver-facing in-cab cameras and autonomous trucks. Under the agreement, ABF would need the written consent of the Teamsters to deploy driverless trucks, and even then, the technology could not result in a reduction in union jobs.

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“With this new agreement, we have reset the standard and charted a new course for the entire freight industry,” Teamsters General President Sean M. O’Brien said in the statement. “The gains made at the table are a testament to our strength and commitment to revamp and rebuild the Freight Division.”


A ratification vote by the more than 8,500 rank-and-file Teamsters at ABF Freight, a subsidiary of publicly owned ArcBest, is expected prior to the expiration of the current contract on June 30.

Raising the bar​

In addition to raising wages for ABF Teamsters, the tentative agreement raises the bar for two other unionized LTL carriers: Yellow and TForce Freight. Yellow is the largest employer of Teamsters in the LTL sector, with 22,000 union workers, while TForce Freight — formerly UPS Freight — has about 7,000 Teamsters drivers.


TForce Freight is in the middle of its own contract negotiations with the Teamsters that are expected to resume June 26 after Teamsters at the company, a subsidiary of Canadian transportation holding company TFI International, authorized a strike this week.


The Teamsters this week began surveying members at Yellow on their priorities and demands for a new or modified contract. Yellow’s contract doesn’t expire until March 31, 2024, but the company has offered to open talks early amid clashes with the Teamsters over a planned restructuring.
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Yellow, TForce and ABF are the third-, sixth- and seventh-largest US LTL providers by revenue, respectively. They are also the only large unionized LTL providers. However, with $12.2 billion in combined annual revenue, they account for about 20% of total annual US LTL revenue, according to research from SJ Consulting Group.
Together, the three companies handled 104,748 LTL shipments a day in 2022, an analysis by the Pittsburgh-based transportation research firm shows. That’s about 14.5% of total US LTL shipments, which reached 719,940 shipments per day in 2022.
The three companies face different economic circumstances. With $697.8 million in first-quarter operating revenue and a 93.2% operating ratio, ABF is the most profitable of the three. TFI’s TForce had $460.3 million in first-quarter revenue in the US and a 95.7% operating ratio.
Yellow reported $1.2 billion revenue and a 100.8% operating ratio that reflected a $9.3 million operating loss in the first quarter. The company warned employees and the Teamsters it could run out of cash unless it can secure financing, which it says is based on its ability to restructure.
Contact William B. Cassidy at [email protected] and follow him on Twitter: @willbcassidy.