For all of the hand-wringing concerning the potential for labor disturbances across multiple modes, the 12 months got here and went, with the notable exception of the dispute between the United Auto Staff and Mack Trucks, mostly bereft of the pictures of picket lines.
UPS Inc. (NYSE: UPS) and the Teamsters union reached a five-year contract without 340,000 UPS Teamsters hitting the bricks. U.S. members of the International Longshore and Warehouse Union remained on the job through contract talks that will culminate in a six-year agreement, though Canadian ILWU members did walk off the job twice in July for temporary periods.
Staff at less-than-truckload carriers ABF Freight System Inc., a unit of ArcBest Corp., and TForce Freight, the U.S. arm of Canadian transport and logistics company TFI International Inc., ratified their respective five-year contracts with little fanfare. The rail industry, coming off a turbulent 2022 when labor-management disputes got here near shutting down the national system, spent 2023 in relative quiet.
But there may be a price to be paid for labor peace. Contracts ratified during 2023 got here with worker wage and profit increases. The gains will either be absorbed by employers, passed on to customers, their customers, consumers or a mix of all three. The mainstream media-coined phrase of the “summer of strikes” proved to be overrated. Still, the labor disputes in multiple industries, and the settlements that resulted, were sufficiently high profile to compel staff heading into 2024 to wonder in the event that they can also get greater than they’ve bargained for prior to now.
Certainly one of the most important stories of the 12 months, the demise of the near-century-old LTL carrier Yellow Corp., didn’t involve strikes, however the destruction of 30,000 jobs, 22,000 of them Teamster jobs. It marked a tragic ending to a 15-year odyssey that saw Yellow’s rank and file sacrifice mightily to maintain the corporate afloat, only to see the corporate, and their jobs, disappear.
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Parcel: Teamsters angling for greater fish
The Teamsters’ contract with UPS affects more union staff than any compact in North America. Yet it could possibly be just a method to an end.
Teamsters General President Sean O’Brien took a really aggressive posture in contract talks with Big Brown. He did so for 3 reasons: 1. That’s who he’s. 2. He wanted UPS staff to reap the tailwinds of a positive post-COVID labor environment that they’d missed out on having ratified the last contract in 2018. 3. He desired to send a message to Amazon.com Inc. that it could nail down the identical sort of deal for its nonunion staff.
On Tuesday, the Teamsters issued an announcement accusing Amazon of misclassifying delivery drivers as employees of its Delivery Service Partners (DSP), contractors who work for Amazon, as an alternative of Amazon employees although the drivers wear Amazon uniforms, drive Amazon-branded vehicles and take direction from the corporate.
The Teamsters’ efforts will proceed to be met with pushback from Amazon. The corporate refused to barter with warehouse staff who’ve agreed to prepare, and it shows no signs of backing off. Regardless, it seems that Amazon will turn into the Teamsters’ holy grail heading into 2024.
The Teamsters got here away with what, by all accounts, was a positive cope with UPS, though the corporate maintains that the increases, when opened up over the five-year contract life, were removed from enormous. The rank and file won a roughly 10% wage increase in 12 months one and a good increase — though not as much — in 12 months five. In between, the bumps will probably be fairly modest. All told, staff will realize compounded annualized gains of three.3% over the five-year cycle, based on UPS.
The 12 months ends with UPS attempting to sort out the status of its volumes within the wake of the contentious Teamster negotiations. In late October, the Atlanta-based company said that about 1.5 million each day parcels had been diverted all year long resulting from customer concerns over a possible strike. That was higher than UPS’ original diversion estimate of 1.1 million parcels. About 600,000 parcels had returned to the network, with roughly half of that coming from chief rival FedEx Corp. (NYSE: FDX), UPS executives said on the time.
The corporate didn’t provide an update as of the third week of December.
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LTL: Yellow dominated the labor space
Perhaps the most important story within the transportation and logistics space this 12 months was the closure of Yellow Corp. While the finger-pointing over which party is accountable lingers in some circles, the defunct carrier’s estate continues to be sold off in hopes of fully repaying creditors.
The last straw was a failure to implement a change of operations with its union workforce. Yellow was hopeful it could consolidate operations at regional carriers Latest Penn and Holland with its national YRC Freight network because it had done at its Reddaway facilities months prior. Nonetheless, labor balked on the planned changes to work rules, which might require drivers to also work freight on the docks and at locations aside from their home terminal.
A ray of sunshine got here within the spring when it appeared the 2 parties would pull forward negotiations on their collective bargaining agreement and hash out a proposed change of operations alongside setting rates for wages and advantages. Negotiations quickly fizzled and the heated rhetoric resumed in brief order.
Running out of money and options, Yellow asked plan administrators to defer health and pension contributions and called on the White House to intervene in negotiations. The corporate even filed suit against the Teamsters for breach of contract, claiming the organization was negotiating in bad faith and intentionally delaying implementation of the changes although it knew the carrier would run out of cash.
The specter of a employee strike over missed health care payments was enough to force Yellow’s customers to hunt other capability options. Court filings showed Yellow had 40,000 shipments in its network the day the strike was announced. Shipments fell by 10,000 per day to “near zero” by the top of that week. On July 30 it ceased operations. It filed for bankruptcy protection every week later.
Some have speculated that O’Brien sacrificed Yellow to point out management at UPS (NYSE: UPS), where it was negotiating a labor deal on behalf of nearly 340,000 staff, that it meant business.
The Teamsters claimed throughout the negotiations that its members had given billions in wages, advantages and pension concessions prior to now. It blamed Yellow for years of mismanagement and said it wasn’t going to bail it out again.
“It isn’t left for the Teamsters to avoid wasting this company; we have now given enough,” O’Brien said in June. “What happens next is out of our control.”
In the long run, 30,000 employees were on the road, 22,000 of them Teamsters.
There have been some LTL labor negotiations conducted in 2023 that didn’t include personal attacks and name-calling. While O’Brien vowed to “fight like hell” heading into talks with TForce Freight (NYSE: TFII) and ABF Freight (NASDAQ: ARCB), no fireworks were publicly visible although Teamsters at each corporations voted “yes” to strike if certain demands weren’t met.
In June, ABF and the Teamsters reached a five-year deal that raised wages by $6.50 per hour and advantages contributions by $4.46 per hour over the lifetime of the contract. Employees also received two additional paid sick days and one additional paid holiday, amongst other provisions. The contract covers roughly 8,600 staff.
In July, TForce reached a cope with the Teamsters covering 7,800 drivers and clerical staff. The package included wage increases totaling $4.50 per hour over the contract period, mileage increases and better employer contributions to health, welfare and pension plans. Additional paid day without work, work rule protections keeping road drivers from working freight on the docks and a requirement for brand spanking new trucks to have air-con, were amongst other items agreed to.
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Maritime: Different union, same contract concerns
This 12 months began with fears that one in every of America’s largest dockworker unions would disrupt imports. It ended with the identical fears about a special union.
The ILWU represents dockworkers on the Pacific ports of the U.S. and Canada. The contract covering U.S. West Coast port labor expired on July 1, 2022. Talks dragged on into this 12 months, with salary increases and COVID bonuses the predictable sticking points.
Work slowdowns ensued, but importers were prepared: A portion of Asia-U.S. volumes was redirected to East and Gulf Coast ports to hedge the ILWU risk.
A brand new contract agreement was finally reached on June 14. ILWU staff got their COVID bonus and a 32% pay raise over a six-year period.
Shipping’s labor saga appeared, briefly, to be over. Then three recent plotlines emerged.
The ILWU’s American members reached a deal, but not its Canadian members. ILWU Canada went on strike on July 1, went back to work on July 13, said it was going back on strike on July 18, called the strike off the subsequent day, then finally agreed to a deal on July 30.
Meanwhile, the company division of the ILWU was contending with a potentially crippling legal liability.
A jury in Oregon decided in November 2019 that the ILWU owed terminal operator ICTSI $93.6 million in damages for illegal labor practices starting in 2013 on the ICTSI terminal in Portland, Oregon.
A judge lowered the award to $19 million in March 2020, but provided that either side agreed. ICTSI didn’t agree, and a second damages trial was put in motion, with ICTSI looking for $48 million to $142 million this time around.
The brand new damages trial was scheduled for February 2024, but on Sept. 30, the ILWU short-circuited the method by filing for Chapter 11 bankruptcy protection in California.
ICTSI is vigorously contesting the move, claiming the ILWU is forum shopping. A hearing on the ultimate confirmation of the Chapter 11 plan which calls for the ILWU to pay ICTSI $6.1 million is scheduled for late March 2024.
One more labor plotline features the International Longshoremen’s Association, which represents dockworkers at East and Gulf Coast ports. Its current six-year contract with employers expires on Sept. 30, 2024 just over a month before the subsequent presidential election.
In its next contract, the ILA is demanding “a landmark compensation package,” prohibitions against terminal automation and tightened language ensuring all work at recent terminals goes to ILA members.
ILWU President Harold Daggett warned on Nov. 4: “Members should prepare for the potential for a coastwide strike in October 2024.”
Thus, the coastal threats have reversed. In early 2023, shippers were shifting cargo away from the chance of West Coast labor disruptions and toward the protection of East and Gulf Coast ports. As this 12 months involves a detailed, they’re shifting cargo back to the West Coast and away from a possible disruption next 12 months at East and Gulf Coast ports.
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Rail: The calm after the storm
Compared with the contentious environment in 2022 and an inability to get a labor agreement passed without congressional intervention, the U.S. operations of the Class I railroads and their craft unions experienced a comparatively more subdued 2023. Despite some disagreements over furloughs and crew consists, individual unions reached sick leave agreements with the assorted Class I railroads all year long; some railroads, corresponding to Union Pacific (NYSE: UNP) and Norfolk Southern (NYSE: NSC), even reached agreements on work schedules. Each the sick leave and work scheduling agreements weren’t a part of the labor agreements ratified by the railroads and unions in December 2022.
Nonetheless, what happens in 2024 in rail labor-railroad relations could function an indicator for a way the subsequent bargaining round will go. The following bargaining round will officially kick off in January 2025 with preliminary negotiations, but either side could start gearing up within the second half of 2024.
“The railroads are committed to working with rail labor, delivering on their guarantees and maintaining railroading’s place amongst the most effective jobs in our economy,” Brendan Branon, chairman of the National Railway Labor Conference and the National Carriers’ Conference Committee (NCCC), told FreightWaves in an emailed statement. NCCC represents the freight railroads on the bargaining table.
Branon noted the railroads and the unions in 2023 reached local agreements expanding paid sick leave to greater than 90% of all unionized rail employees at NCCC rail carriers.
“We hope to increase that positive momentum throughout 2024 and into the beginning of the subsequent bargaining round. Probably the most recent national agreements provide that opening proposals will be served starting in November 2024 ahead of the January 1, 2025 amendable date,” Branon said.
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Trucks: Mack staff walk again
For the second time in 4 years, Mack Truck staff went on strike against the Volvo Group subsidiary. The Oct. 9 walkout caught the corporate by surprise since it had reached a tentative agreement Oct. 1 endorsed by each local and international UAW leaders.
Outside influences appeared to prompt the 39-day walkout. An ongoing UAW strike of the Detroit Three automakers caught the eye of Mack staff, who saw the more substantial offers being made by the automakers to the union.
And the World Socialist Website (WSWS), which had backed Mack worker Will Lehman in an unsuccessful bid for president of the international UAW earlier within the 12 months, agitated staff to vote down the tentative agreement, which they did by 73%.
The 2 sides resumed talks, but Mack made it clear it had nothing more to supply, aside from settling some unresolved local agreements. The strike involved 3,900 staff at facilities in Pennsylvania, Florida and Maryland, where a Hagerstown engine plant provides powertrains for Mack and Volvo Truck North America operations.
After the staredown, union leaders took a second vote on the agreement that called for 19% pay hikes across five years, a $3,500 signing bonus and no out-of-pocket increases in profit costs plus other gains. The corporate called the Oct. 1 tentative pact its “last, best and final” offer.
Mack threatened to declare an impasse, hire temporary staff and make existing staff fight for his or her jobs. The second vote Nov. 15 passed with 93% in favor.
The WSWS railed against the “sellout contract” that Mack pushed for ratification in addition to agreements with higher terms eventually reached by Detroit’s Big Three.
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Aviation: A busy 12 months
It was a busy 12 months for labor contracts within the airline and air cargo sectors. The specter of disruption loomed over some carriers as unions flexed their muscle to influence negotiations and recent deals significantly raised operating costs.
Pilot unions were in a position to make the most of favorable economic conditions a decent labor market, high inflation, crew shortages at mainline carriers as they tried to rebuild after pandemic-driven layoffs and a training backlog for brand spanking new hires to recover pay and work schedules.
Various major passenger airlines reached collective bargaining agreements with cockpit crews. Delta Air Lines pilots finalized a contract that features a 34% raise over 4 years. In September, pilots at United Airlines approved a brand new contract that raised pay as much as 40%. American Airlines pilots also received an enormous raise. And Hawaiian Airlines pilots, including those hired to fly the corporate’s first freighters for Amazon, reached a deal that raised pay as much as 33%.
Southwest Airlines pilots struck a tentative deal this week after earlier giving union leaders leeway to call a strike. Strikes are rare in aviation, partially due to federal law that severely restricts the power of unions or management to shut down operations for leverage.
Miami-based cargo operator Amerijet agreed last summer to lift pilot pay a minimum of 45% in a three-year cope with the union. The pay hike got here against the backdrop of sharply lower revenues due to weak market conditions, with the corporate shedding some back-office personnel, offshoring accounting functions and parking some aircraft to make ends meet.
Last month, pilots at cargo airline Air Transport International laid the groundwork for union leaders to call a strike when legally allowed. The corporate is one in every of the fundamental transportation providers for Amazon Air and DHL Express within the U.S.
Pilots at Western Global Airlines unionized in 2021 and were looking for their first contract when the carrier filed for bankruptcy protection in August. The corporate exited the bankruptcy process earlier this month after disposing the majority of its liabilities.
In July, pilots at FedEx Express voted to reject a proposed deal between management and union negotiators. The deal would have raised pay by 30% over five years. Pilots had authorized union leadership to initiate a strike vote before union negotiators reached agreement May 30 on a brand new deal.
Pilots who voted against the FedEx deal complained about weaker job protections, back pay and alternative pension options and said pay increases were below those achieved by pilots at Delta, United and American. FedEx has too many pilots for fewer needed routes and last month urged some to contemplate jumping to regional carrier PSA Airlines.
Meanwhile, 1,100 ramp staff at DHL Express’ Cincinnati air hub went on strike on Dec. 7, with the impact spreading as Teamster members at other U.S. locations honored the picket line and refused to report for work. An agreement between the 2 sides was reached 12 days later.
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