YRC Teamsters approve five-year contract, avert strike

YRC Teamsters approve five-year contract, avert strike

The new five-year contract will give YRC drivers and dockworkers an 18 percent raise over five years, the Teamsters union said. Photo credit: Shutterstock.com.

Teamsters at YRC Worldwide have approved a new five-year labor agreement by a wide margin, but not without a twist. One of 27 supplemental agreements, the Joint Council 40 supplement, failed to pass. That means the new contract can’t take effect until the less-than-truckload (LTL) trucking holding company and the union negotiate and resolve differences over the supplement.

The National Master Freight Agreement portion of the contract, which covers about 25,000 Teamster employees, was approved by a 60 percent margin, 10,163 votes to 6,741 votes, the Teamsters union announced Friday. “This contract should improve the livelihoods of our YRCW [YRC Worldwide] Teamsters for the next five years,” said James P. Hoffa, Teamsters general president.

Shippers should be relieved. They won’t have to worry about any sudden loss of the LTL capacity resulting from labor action such as a slowdown or strike just as the economy is expected to pick up in the second quarter. YRC Freight is the fourth-largest standalone LTL carrier in the United States and the largest Teamster employer in the LTL trucking sector.

YRC Worldwide’s national operating unit, YRC Freight, and regional subsidiaries Holland, New Penn, and Reddaway supply a large amount of LTL capacity. In 2018, YRC Freight had 14,300 terminal doors, handling 10.1 million shipments, while the regional carriers had 6,750 doors and handled 10.4 million shipments. Reddaway is covered by a separate union agreement.

Avoiding disruption

Shippers had a taste of LTL disruption last autumn, when UPS Freight, the sixth-largest US LTL carrier, temporarily shut down its network in advance of a second-round contract vote by its Teamster employees, and again in February, when regional carrier New England Motor Freight shut down permanently.

Teamsters officials said a “no vote” on the National Master Freight Agreement proposal would authorize a strike, but that “in all likelihood, it would never come to a strike because the customers would likely pull their freight away from the companies before that could happen.” In 2014, the Teamster rank-and-file at YRC Worldwide rejected an initial contract proposal.

Not this time. Although the contract doesn’t completely restore concessions, the Teamsters accepted a decade ago to save the company from bankruptcy, it does give most drivers and dockworkers an 18 percent raise over five years, totalling $4 an hour, restores a week’s vacation time lost in concessions, and protects no-pay health and welfare benefits, the union said.

The contract also includes language intended to curb excessive executive bonuses and which would ensure bonuses go to rank-and-file Teamsters as well as the company’s top brass. That was a point of contention for many employees. And in a nod to growing labor concern over automation, the contract forbids the deployment of driverless autonomous trucks.

While the union and YRC address the Joint Council 40 supplement, a contract extension will keep the current five-year agreement in place. In the meantime, the Overland Park, Kansas-based company will release its first-quarter earnings report May 8. In 2018, YRC Worldwide reported $5.1 billion in revenue, but a net profit of only $24.5 million.

Contact William B. Cassidy at bill.cassidy@ihsmarkit.com and follow him on Twitter: @willbcassidy.

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