Major Trucking Company Downshifting

Zollars: Labor Pact Levels Field

YRC Worldwide Chairman, President and CEO William D. Zollars said the money saved by the wage concessions sought from the Teamsters union will level the playing field between his company and its nonunion competition.

"This pretty much wipes out the difference between union and non-union in our industry, in terms of our cost-base," Zollars said in an interview this morning with CNBC.

YRC is seeking a 10 percent wage cut from its Yellow Transportation, Roadway, Holland and New Penn subsidiaries and a suspension of cost of living adjustments. In exchange, Teamsters employees would receive a 15 percent ownership stake through YRC stock. YRC estimates the cost savings from the modifications to the National Master Freight Agreement at $220 million to $250 million annually. A vote on ratification of the agreement by union members is scheduled for later this month.

Zollars said freight levels declined in "double digits" compared with a year ago.

"It's a pretty ugly situation out there. We're just putting ourselves in a position to be able to make it through no matter how bad it gets." (Click here for video)

TEAMSTERS, YRC WORLDWIDE REACH AGREEMENT ON ECONOMIC RELIEF

Agreement Will Protect Union’s Freight Members’ Jobs, Benefits

Facing the worst economy since the 1930s, the Teamsters Union and the freight companies of YRC Worldwide Inc. (YRCW) have reached an agreement to provide the company with economic relief that will protect the jobs and retirement security of tens of thousands of Teamsters.

“This agreement will help the company get through this deepening recession and protect the jobs and health, welfare and pension benefits of our freight Teamsters,” said Tyson Johnson, Director of the Teamsters National Freight Division. “This is a very difficult time for our members, but this agreement will protect the livelihoods of our members and their families, which is our number one priority.”

The details of the agreement will be discussed on Wednesday, December 3 with leaders of local unions that represent members from the YRCW companies—Yellow Transportation, Roadway, USF Holland and New Penn. If the local leaders approve the plan, Teamster freight members will be asked to ratify the agreement next month. About 40,000 Teamster drivers, dockworkers, clerical employees and others are actively employed at the companies.

“I believe our freight members understand the terrible economic conditions that are battering the trucking industry,” said Jim Hoffa, Teamsters General President. “We are facing the worst economic environment since the Great Depression. We all need to work together to get through this period of uncertainty. This agreement will help protect tens of thousands of our members’ jobs. Failing to act now would be a grave mistake.”

Government keeps 11-hour limit on truckers hours

Government agency maintains 11-hour limit on truckers hours, instead of proposed change to 10

The Federal Motor Carrier Safety Administration on Tuesday maintained a regulation that allows truck drivers to stay on the road for 11 hours in a row, rather than a limit of 10.

In a conference call, administrator John Hill said that there was no evidence that safety of travelers is jeopardized by having truck drivers on the road for 11 hours.

Safety advocates say the industry is putting the public at risk by allowing truckers to drive too many hours.

The trucking industry's main trade group, the American Trucking Association, has been a proponent of maintaining the 11-hour limit, arguing that further limiting trucker's hours would have been costly and would have required the industry to retrain drivers and operating personnel, reprint logs, reengineer routes and make other changes.

A spokeswoman for the group said the ATA was pleased with the decision and noted that current safety rules, first established in 2004, have already resulted in safer highways. The ATA represents companies including UPS Inc. and YRC Worldwide Inc.

YRC Integration Ahead of Schedule

The integration of YRCW's two largest less-than-truckload subsidiaries is proceeding ahead of schedule, the company said Nov. 18. With support from customers and the collaboration of the Teamsters, more than 60 facilities nationwide are either consolidated or in the process of consolidation.

As the economy fizzles and demand slackens in the current quarter, Bill Zollars, chairman, president and CEO of YRC Worldwide, is calling on the transportation and logistics industry to focus on the future by pointing out the improved services and savings that will be achieved when the integration is completed.

"In this time of unprecedented economic challenges, our industry needs to focus on continually improving our efficiency and effectiveness," Zollars said.

The national integration for Yellow Transportation and Roadway is part of the company's program to improve operations and solidify its financial position. Strategic global growth, enhanced service offerings in the regional network and expanded communications are also part of the plan.

"Integrating our network enables us to provide unparalleled benefits to customers," said Mike Smid, president and CEO of the YRC Worldwide North American transportation division. "The integrated network builds shipment densities, allowing us to expand service offerings, improve reliability and serve more direct points."