ABF Bargaining Update: Slow Progress

The second weekly round of bargaining with ABF Freight took place this week for a new collective bargaining agreement to succeed the ABF NMFA that is set to expire on March 31.  Unfortunately not a lot of progress was achieved. The Teamsters National Freight Industry Negotiating Committee (TNFINC) has made clear that it wants to reach a new agreement but that any agreement will, among other things, need to address: the restoration of the vacation week that was given up last contract; better protections for road drivers from loss of work due to purchased transportation; protection of health and welfare and pension benefits; and reasonable wage increases.

The union committee has sought to resolve language issues to the extent possible before diving into the hard economics. The company, however, has claimed that its labor and operating costs are too high and that it is essentially seeking a cost neutral agreement and undefined “flexibilities.” The full union committee made it clear that it is not interested in concessions and is seeking real improvements.

In terms of language, the company this week proposed some items that seem somewhat off-point. For example, ABF is now proposing to significantly ramp up its drug and alcohol testing regimen by demanding that all employees be subjected to “hair” testing. Drug testing hair samples detects possible drug use (illegal and legal prescription) from weeks and months earlier but does not necessarily test for on-the-job use or impairment. The company also is seeking new “fitness for duty” requirements that would subject employees to discipline. ABF has also rejected the union’s demand to prohibit the use of driverless trucks even though the company states that it has no current plans to purchase driverless trucks. The union, however, has not withdrawn its proposal in this regard.

While some progress was made on language issues and negotiations are still proceeding, according to Ernie Soehl, co-chair of TNFINC, “it seems a bit strange that the company, after claiming over and over that its labor and operating costs are the problem, is spending time insisting on a new broader drug and alcohol policy, when, according to the company’s own records, over the last five years only one person has tested positive for drugs in a post-accident test.” Also, Soehl added that given the tough work environment and the average age of the ABF workforce, imposing vague “fit for duty” requirements seems to be a “recipe for mischief.”

Nevertheless, the union committee remains positive.

“We didn’t make as much progress as we had expected this week, but we did advance the ball a little bit,” Soehl said. “For example, although no agreement was reached on new protections for road drivers from purchased transportation, we did at least have some productive dialogue.”   Also, the parties did reach a tentative agreement on some small improvements to the “change of operations” provisions and equipment requirements.

TNFINC is committed to fighting for members’ issues and believes that the Teamsters will prevail. 

Negotiations are scheduled to resume in Kansas City on February 12.

Teamsters Make Progress During 2nd Week of UPS and UPS Freight Contract Negotiations

UPS Contract Update for February 1

The Teamsters National UPS Negotiating Committee has made progress on a variety of issues as the second week of contract negotiations with UPS wrapped up today.

“We are still early in the negotiations, but we are pleased to report that we made progress on a number of non-economic issues,” said Denis Taylor, Director of the Teamsters Package Division and Co-Chairman of the National UPS Negotiating Committee. “This week gives us momentum as we prepare for the next round of negotiations later this month.”

Among other issues, the following were on the table this week:

Article 3, Section 7, Supervisors Working;
Article 6, Technological Change;
Article 37, Harassment, 8-Hour Requests and 9.5 language;
Article 26, SurePost.

In the UPS Freight negotiations, National UPS Freight Negotiating Co-Chairman Kris Taylor reported progress as well.

“We addressed Article 7, Grievance Machinery;
Article 15, Equipment and Safety;
Article 20, Cooperation of Employees Fair Days Pay;
Article 31, Lodging;
Article 32, Rain Gear, Glove and Yard Lights,” Taylor said.

The next round of negotiations will take place Feb. 18-22.

YRC Worldwide Reports Fourth Quarter and Full-Year Results for 2017

Fourth quarter results include Operating Income of $11.3 million and Adjusted EBITDA of $58.5 million

CDA notes maturity extended and outstanding principal reduced

YRC Worldwide Inc. reported consolidated operating revenue for fourth quarter 2017 of $1.209 billion and consolidated operating income of $11.3 million, which included a $3.6 million gain on property disposals. As a comparison, for the fourth quarter 2016, the Company reported consolidated operating revenue of $1.148 billion and consolidated operating income of $14.9 million, which included a $3.4 million gain on property disposals.

Consolidated operating revenue for the year ended December 31, 2017 was $4.891 billion with consolidated operating income of $98.4 million, which included a $0.6 million gain on property disposals. This compares to full-year 2016 consolidated operating revenue of $4.698 billion with consolidated operating income of $124.3 million, which included a $14.6 million gain on property disposals.

In January 2018, the Company extended the maturity of its contribution deferral agreement (CDA) notes from December 2019 to December 2022. As part of the extension, the Company paid $25 million that reduced the outstanding principal of the CDA notes to $75.1 million. Over the past five quarters, outstanding debt at YRC Worldwide has been reduced by $129.3 million.

Financial Highlights

The fourth quarter 2017 net loss was $7.5 million compared to a net loss of $7.5 million in fourth quarter 2016. For full-year 2017, the net loss was $10.8 million compared to net income of $21.5 million in 2016. The fourth quarter and full-year 2017 results were impacted by a $7.6 million non-union pension settlement charge.

On a non-GAAP basis, the Company generated consolidated Adjusted EBITDA of $58.5 million in fourth quarter 2017 compared to $57.7 million in the prior year comparable quarter (as detailed in the reconciliation below). Last twelve month (LTM) consolidated Adjusted EBITDA was $274.2 million compared to $297.5 million in 2016.

The total debt-to-Adjusted EBITDA ratio for fourth quarter 2017 was 3.38 times compared to 3.40 times for fourth quarter 2016.

The fourth quarter 2017 results include increases in short-term rental expense of $4.1 million and local purchased transportation expense of $3.0 million when compared to the fourth quarter 2016. The increases were primarily due to a shortage of revenue equipment and a demand for drivers.

The fourth quarter 2017 results include a non-union pension settlement charge at YRC Freight of $7.6 million. The pension settlement charge was triggered due to the amount of lump sum benefit payments distributed from plan assets in 2017. The lump sum benefit payments reduce pension obligations and are funded from existing pension plan assets and therefore do not impact the Company's cash balance nor liquidity. The non-cash expense is excluded from Adjusted EBITDA, consistent with the Company's term loan agreement.

The fourth quarter 2017 was unfavorably impacted by approximately $4.0 million in legal expenses due to adverse developments at the Regional segment when compared to the fourth quarter 2016.

Reinvestment in the business continued in 2017 with $103.3 million in capital expenditures and new operating leases for revenue equipment with a capital value equivalent of $133.8 million, for a total of $237.0 million. This compares to a total of $253.1 million invested in 2016. The majority of the investment was in tractors, trailers and technology.

Full report here...................

YRC Freight Driver Henry Hartley Achieves 4 Million Consecutive Miles Safety Record

In his over 44-year career with YRC Freight, Henry Hartley has reached the elite safety milestone of driving four million consecutive miles without a single preventable collision.

Hartley was previously inducted into the YRC Freight Driver Hall of Fame in 2015 for attaining over three million consecutive miles without a single preventable collision.

“Our drivers are true professionals, and Henry has a genuine dedication for the safety of the motoring public. He drives safely, day in and day out, year after year, demonstrating self-discipline, constant focus and commitment,” said T.J. O’Connor, YRC Freight president.

Henry Hartley observed, “I never thought I could reach this safety milestone until it came. I have learned to look out for the other guy, and I diligently practice the Smith System. There might have been some luck involved, but I’m truly proud to have reached four million safe consecutive miles. What I enjoyed the most over the past 44-years was being able to meet so many nice people and satisfying our customers.”

“I could not be happier or prouder of Henry Hartley. Achieving four million safe miles is the equivalent of driving to the moon and back eight times–or 160 trips around the equator–without a preventable accident. My safety hat is off to him, and my thanks to his family for sharing him with us,” says Terry Budimlija, YRC Freight Safety Director.

“Henry is the gold standard–he is as good as they come–one of the finest employees I’ve ever had the pleasure to work with in my entire career. He is one of the happiest, most good-natured, hard-working drivers we’ve ever had.” — Greg Drake, Terminal Manager

Stan Hite, YRC Freight Account Executive was pleased to conclude, “Henry is the best driver/salesman I have ever had the privilege of working with in my 32-year career. He works and advocates for YRC Freight, making a personal and professional connection with each of ‘his’ customers. He loves his job and it certainly shows. His work ethic is amazing.”

Born and raised in Summit, South Carolina, Hartley started working for a nearby farmer when he was eleven years old. He enjoyed tractors and hauling and delivered produce in the summer months during his high school years. He fell in love with hauling and tractor trailers on that farm. When asked about retirement, Hartley responded,

“I’m going too strong to retire just yet. I wake up eager to start every day.”

YRC Freight recognized his safety record at a celebratory event with co-workers, family and customers. Among his awards, Hartley was presented with a certificate of commendation for outstanding safety performance, a letter of congratulations from the South Carolina Trucking Association and a commemorative jacket.