The five-year contract extension between less-than-truckload carrier YRC Worldwide Inc. (NASDAQ:YRCW) and its approximately 24,000 Teamsters union members doesn’t expire for more than four months. But it could be argued the thrust-and-parry between the parties began last Friday.
That’s when the Teamsters and YRC agreed to launch two driver pilot programs, each of which will start this Sunday and run for 60 days. One program allows pick-up and delivery drivers at the units to work 70 hours over an 8-day period, and makes a 34-hour driver restart available for drivers at the units. The other creates positions for employees without commercial driver licenses to make local, short-haul deliveries that in the past were handled by non-union third parties. Those unionized “non-CDL” drivers would earn $20.14 an hour.
Currently, YRC caps pick-up and delivery driver hours at 60 hours over a 7-day period. Line-haul drivers are governed by the maximum 70 hour/8-day work cycle set by the federal government.
The pilots cover operations at YRC Freight, YRC’s long-haul unit, and Holland and New Penn, two of YRC’s three U.S.-based regional operating companies. Compliance is voluntary, meaning a driver does not have to accept the longer hours of service or the 34-hour “restart,” which allows drivers back on the road after 34 hours of rest. Federal regulations mandate that drivers take 34 hours off after working a maximum of 70 hours in a maximum 8-day cycle. However, the Teamsters are free to adjust downward the hours worked depending on the preference of each local.
Teamster locals not interested in participating in one or both programs can decline to do so, according to language in the pilots. In addition, the companies are forbidden from using non-CDL drivers to avoid filling vacancies calling for CDL credentials.
The pilots will launch just 17 weeks ahead of the expiration of the 63-month extension to a 2010 collective bargaining agreement. Ratified in January 2014 with the threat of bankruptcy protection hanging over the company and its workers, the extension—which expires March 31—preserved the 15 percent wage cuts and draconian pension benefit reduction originally agreed to when the Overland Park, Kan.-based carrier was on death’s door in the wake of the Great Recession. The financial pain caused by the original wage cuts and a 75 percent pension benefit concession has left a decade-long bitter taste in the rank-and-file’s mouths.
In a statement, YRC said drivers eligible for working the 70 hour/8-day cycle can use the longer hours and the 34 hour restart to increase their earnings power. With a 34-hour restart, pick-up and delivery drivers that worked the 60-hour maximum in a 5-day cycle could return to the road faster than having to wait 3 days to start a new cycle.
The creation of the non-CDL driver positions would create a new pool of drivers that could graduate into CDL positions should they choose to do so, the company said.,
In a memo distributed Friday, Ernie Soehl, who heads the Teamsters’ national freight division, said the programs’ intent is to “insource work and increases earning opportunities for the bargaining unit” while reducing the amount of work performed by non-union parties. The programs should also help the two regional companies service freight in areas where they have trouble recruiting and retaining qualified drivers, Soehl said.
The recruiting problem is particularly acute in local cartage, where YRC companies are forced to use a high percentage of third-parties for work that bargaining unit employees can perform, Soehl wrote. Those contractors don’t use CDL drivers to perform portions of this work, he said.
However, if some comments on a popular online chatroom called “Trucking Boards.com” are any indication, the pilots are being viewed as management’s way to lowball driver wages ahead of the contract talks. By starting non-CDL drivers driving straight trucks at wage levels below senior drivers, the company may be laying the groundwork to fill the driver pipeline with lower-paid workers, according to several commenters. YRC’s over-the-road drivers typically start at $60,000 a year, while pick-up and delivery drivers pull down about $22 per hour, according to the company’s website.
“You get a bunch of guys that are currently delivering furniture and appliances and not making very much doing it (and) you offer them this job making $20 an hour with benefits,” according to one poster. “Now the company gets drivers at an even cheaper rate than what they are paying us now.”
One source who is retired from YRC said the pilots are effectively being floated to see if they will eventually find their way into the collective bargaining process.
The Teamsters for a Democratic Union, a dissident group at odds with Teamster leadership, said in a communique that the real issue is that the companies “cannot hire and keep qualified drivers at the concessionary wages they currently pay. Raise the wages and drivers will work.”
According to TDU, Soehl and Teamster General-President James P. Hoffa need to understand that “we need to win better wages. That will grow and stabilize the work force with Teamsters who move the freight efficiently.”
(Clarification: This story has been corrected to clarify that the increased hours apply to pick-up and delivery workers, and that YRC Freight is part of the pilot.)