ABF Freight System provided the small print of a recently inked tentative agreement with its union workforce Thursday after the market closed.
The brand new labor deal, if ratified, would offer employees with wage increases, a step up in health and welfare contributions, additional sick time, yet another paid holiday and a revised profit-sharing program. The brand new five-year collective-bargaining agreement with the International Brotherhood of Teamsters would turn out to be effective when the present deal ends on June 30.
Hourly wages will increase by a complete of $6.50 over the five-year term, with advantages contributions increasing by $4.46 per hour over the identical period. The last labor deal between the 2 parties increased hourly wages by $2 an hour over five years.
A news release from Teamsters said the deal has been unanimously approved by union leaders. A vote of ABF’s Teamster employees can be held over the subsequent two weeks.
“ABF’s goal throughout the negotiation process has been to succeed in a good agreement that pays market-based wages and advantages and allows employees to proceed sharing in ABF’s success while enabling ABF to grow and make obligatory investments within the business,” a filing with the Securities and Exchange Commission read.
ABF Freight is the less-than-truckload subsidiary of transportation and logistics provider ArcBest (NASDAQ: ARCB).
The main points include:
- A $3.50 hourly wage increase (plus 8.75 cents per mile) for all regular employees starting July 1.
- A 75 cent increase (plus 1.875 cents per mile) in each of the next 4 years of the deal.
- Cost-of-living increases.
- Latest hire pay will equal 90% of the highest pay rate on the primary day of employment and 100% after the primary yr of employment.
- Newly hired non-CDL employees will start at 70% of the highest rate on day one, progressing to 100% after five years of employment.
- The pay rate tops out at 100% after 4 years for current non-CDL employees.
- The profit-sharing scale was updated to begin at a 1% payout for an operating ratio of 93% or higher (prior requirement was a 96% OR), with a brand new top tier payout of 4% for an 87% or higher OR (prior top tier was 3% with a 93% or higher OR).
- Contributions will proceed to the identical health and welfare and pension funds at current rates. As well as, there can be an 83 cent increase split between the funds in the primary yr, with the increases stepping 63 cents, 80 cents, 99 cents and $1.21 higher, respectively, from years 2024 through 2027.
- Martin Luther King Jr. Day is now a further paid holiday.
- Qualifying employees receive two additional paid sick days.
- The creation of a brand new non-CDL, box truck position, allowing the union to recapture work that normally is handled by contractors and third parties (per an internal Teamsters bulletin).
The notice from Teamsters said the deal also prohibits what it calls “invasive technology,” like inward-facing cameras and audio recorders, and prohibits the usage of autonomous vehicles. The union said it also stopped a proposed increase in the usage of purchased transportation and a points system for attendance amongst other items.
“With this recent agreement, now we have reset the usual and charted a brand new course for the whole freight industry,” said Sean O’Brien, Teamsters general president. “The gains made on the table are a testament to our strength and commitment to revamp and rebuild the Freight Division.”
The Teamsters union is currently negotiating labor contracts with UPS (NYSE: UPS), Yellow Corp. (NASDAQ: YELL) and TForce Freight (NYSE: TFII).
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