Teamsters drivers and dock workers returned to work at Oak Harbor Freight last week, days after ending their five-month strike against the Auburn, Wash., less-than-truckload carrier.
But in a harsh lesson of these tough economic times, many found they didn’t have a job to return to.
Plummeting freight demand, partly because of the strike but mostly the result of the weakened economy, has created a vastly different work environment at the carrier. Oak Harbor lost 40 percent of its business during the strike, and many drivers are immediately being laid off after returning to work.
“We won’t have a clear number on the layoffs until we know how many actually end up coming back,” said Oak Harbor spokesman Mike Hobby. “But right now, we’re running at 61 percent of our revenue (as of September).”
The Teamsters consider some layoffs to be illegal, and this could trigger a new strike, giving shippers another reason to seek alternatives.
“It was our hope that the company would take our offer to return to work as a positive step toward resolving our differences,” said Al Hobart, Teamsters international vice president. “But it is now clear that Oak Harbor’s owners and their union-busting attorney are willing to sacrifice customers, ruin the lives of hard-working union families and drive this company into the ground to get rid of the Teamsters.”
He stressed that the union’s unconditional offer to return to work is not a comment on the state of the economy or the freight industry and shouldn’t be interpreted as an indicator of the union’s strength. “Our dispute with Oak Harbor is far from over.”
The strike by 578 workers at Oak Harbor terminals in Washington, Oregon and Idaho, called to protest alleged federal labor law violations, was the most notable in the LTL industry since UPS Freight predecessor Overnite Transportation endured a three-year strike that ended in October 2002. Some existing conditions mirror those at the end of the Overnite strike, with a flailing economy causing LTL carriers to fight over declining shipper demand for transportation.
But at the end of the Overnite protest, fewer than 300 workers were still on strike out of a work force of 13,000 at 166 terminals nationwide. The Teamsters members that went on strike at Oak Harbor represented a bigger portion of that carrier’s 1,340 workers at 33 terminals. Approximately 136 workers crossed the picket lines during the strike, according to management.
The bigger difference between the two labor situations is that the current economy is in free fall with no end in sight. This could become an increasingly bigger factor in whether the Teamsters can maintain leverage with management.
“It’s been a long time since the Teamsters have had a tremendous amount of leverage; they’ve been steadily losing members since 1980,” said Robert M. Spira, a transportation attorney with Benesch Friedlander Coplan & Aronoff. “I’d say the economy is just another factor. The Teamsters have been looking to get back in; sometimes they win, sometimes not. But with this economy, they’ll have even more trouble making headway.”
Labor’s troubles aren’t restricted to the Teamsters. On the port side, members of the International Longshore and Warehouse Union on the West Coast have seen work opportunities slashed, and even dockworkers with seniority aren’t guaranteed a full week of work.
Port executives say labor’s emphasis today is on attracting business through increased productivity, rather than challenging employers with work slowdowns.
A Democratic administration could help mitigate some of the effects the economy is having on labor clout. The Teamsters union was a strong supporter of President Obama during his presidential campaign, and many on Capitol Hill expect that passing so-called card check legislation — which would make organizing LTL terminals less onerous — will be a top priority.
Still, there is more pressure than ever to cut costs and conserve cash to survive the downturn.
“Supply chain managers have one mission statement right now: reduce costs everywhere,” said Hank Mullen, president of The Visibility Group, an Atlanta-based consultant to shippers and trucking companies. “If costs at the carriers are not reduced, you have the real possibility of losing customers and going out of business. Or you will be replaced and lose your job.”
In the Pacific Northwest, most carrier volume is down 25 to 30 percent, Hobby said.
“We’ve definitely gone deeper in pricing. As shippers move to cut overhead, we have to do the same to retain the business. We’re getting more money per invoice, but our bill count is down even more than overall revenue.”
Oak Harbor said the Teamsters’ return to work was a “positive step forward” that will help the company maintain and improve service levels. According to the company, its on-time delivery percentage in February was 98.46 percent, and its service quality index is better than the same period a year ago.
Contact John Gallagher at firstname.lastname@example.org.