YRC Teamsters unanimously vote to endorse the tentative National Master Freight Agreement.

Following the late March update that YRC Freight the largest subsidiary of less-than-truckload (LTL) transportation services provider YRC Worldwide, and the Teamsters National Freight Negotiating Committee (TNFINC) had come to terms on a tentative agreement in principle for a new collective bargaining agreement, YRC Teamsters this week at its YRC Freight Holland, and New Penn subsidiaries, with the exception of one local unit, this week unanimously voted to endorse the tentative National Master Freight Agreement.

The Teamsters said this contract covers around 30,000 Teamsters and paves the way for a membership vote.

“Negotiations were very difficult and complex, but we strongly believe we have negotiated an agreement that will protect the livelihoods of our members over the next five years,” said Ernie Soehl, Director of the Teamsters National Freight Division, in a statement. “Every member of our negotiating committee believes that the YRCW companies cannot afford any more money than what is contained in this tentative agreement and that there is not a single penny more to get. We pushed the company to the absolute limit.”

Improvements in the tentative agreement highlighted by YRC Teamsters include:

• $4.00 in wage increases over five years for the vast majority of workers (an 18% increase for most drivers and dockworkers) including a $1.00 wage increase retroactive to April 1, 2019 (a 4.5% increase for most drivers and dockworkers);
• significant increases for dock-only, clerical, maintenance employees, janitors, and porters hired after February 2014 including a minimum of an immediate $1.00 wage increase retroactive to April 1, 2019;
• restoration of the week of vacation that was given up (employees otherwise entitled to four, five and six weeks of vacation) effective April 1, 2019, which will require the three companies to restore approximately 14,000 additional weeks of vacation every year;
• protection of health and welfare benefits with no employee premium co-pays. Up to $0.50 per hour increases each year for most funds. The company agreed to provide other funds with fixed guaranteed amounts to maintain benefits;
• improved language to curb excessive executive bonuses; and
• prohibitions against using driverless trucks

In its update to YRC membership, the Teamsters noted that for the past decade, the YRCW operating companies have operated under a series of Memoranda of Understandings (MOUs) that contained significant economic concessions necessary to allow the company to survive.

“At the outset of bargaining, in addition to seeking to reverse the trend of giving concessions, the union committee determined that it was necessary to get out from under the MOU structure and return to a traditional NMFA contract structure,” it said. “The members had not had a new contract in nearly a decade. The tentative agreement accomplishes that, restores the traditional contractual structure and provides for significant economic and non-economic improvements for Teamsters. This was no small task because the YRCW companies continue to face financial difficulties, need to upgrade equipment and must seek to recapture market share.”

And it added that on or about April 19, membership will receive voting information in the mail, with the vote being secret ballot and members will vote via the internet or phone.

Prior to this tentative deal being reached last month, both labor and management were under strong pressure to hit a home run in the YRC talks. The Teamsters said they wanted to restore a 15% wage and 75% cut in pension concessions made a decade ago in order to lay claim to what Teamsters President James P. “Jim” Hoffa calls “North America’s strongest union.”

YRC has been under pressure as it struggles to restore profitability in even what the union concedes is a “cutthroat” LTL market place. YRC, and especially its regional units, were increasingly susceptible to freight diversion by skittish shippers the closer the talks got to the March 31 deadline.

But as officials for UPS could attest, sometimes the Teamsters require extra innings in order to be satisfied. UPS thought it had a ratified contract after 54% of Teamsters rank-and-file voted for it. But that contract still is not in place because of fine print involving “supplemental” side agreements with certain locals.

Bargaining between the parties resumed in mid-March for a new National Master Freight Agreement regarding long-haul YRC Freight and its regional LTL subsidiaries, Holland, and New Penn.

Had the talks gone past the March 31 deadline, there was little chance of any work stoppage. In fact, the union had encouraged its 7,000 or so YRC members to “perform their jobs, work hard and be the professionals that they are,” according to an internal memo sent to members.

Not surprisingly, money is the big issue. Detailed economic proposals are the heart of discussions. But at press time, both sides were without an agreement over about what the long-term wage and benefit package needs to be to retain and attract drivers, dockworkers and other employees with the three companies.

TNFINC’s Soehl previously said that the union has offered significant operational improvements to grow each company in the expanding e-commerce world and addressed inefficiencies that hinder the growth of each company, adding that the Teamsters believe those changes have been undervalued by the companies. And he added that the Teamsters have acknowledged that “the companies continue to face financial challenges in the cutthroat LTL marketplace…but our members, too, have faced significant economic hardship after a decade of givebacks and are not interested in treading water monetarily, seeing changes to their health care, or erosion of standards.”

The Teamsters realize the union operates in an industry that is 95% non-union – compared to the days prior to deregulation when trucking was 95% union. Recently, New England Motor Freight, once the 17th-largest LTL carrier, and ten subsidiaries declared bankruptcy, throwing as many as 4,000 International Association of Machinists members into the unemployment line at least temporarily.

Stifel analyst Dave Ross wrote in a research note that the tentative deal represented “a positive first step” for YRCW and its shareholders, with the caveat that more information is needed on the structure and terms of the deal to assess its likelihood of passing the rank and file vote. And he added that on a longer-term the company still has labor and equipment cost challenges that may or may not be addressed in the new contract proposal.