The Teamsters union is fighting a move by TFI International’s TForce Freight to cut the maximum speed of trucks from 68 to 65 mph.
The union’s national negotiating committee for TForce quietly filed a charge with the National Labor Relations Board on July 12. It alleges that TForce, formerly UPS Freight, violated federal law by modifying the speed limiters without consulting the union and refusing to negotiate after the fact.
“Changing the speed governors directly impacts employee earning capacity, hours of work, hours of service, and safety, which are all mandatory subjects of bargaining,” the complaint states. “The company has refused to rescind its unilateral action and has refused to bargain about its decision and effects on unit employees.”
The NLRB is investigating the complaint. It emerged as an early flashpoint between TFI (NYSE:TFII) and the Teamsters after the Canadian company assumed ownership of UPS Freight on April 30.
TFI acquired UPS’ LTL operation for $800 million with plans to aggressively boost profits while reining in costs. CEO Alain Bedard has signaled willingness to work with the Teamsters, which represent employees at some of TFI’s Canadian operations.
But he also suggested there are limits: “We live with it, we work with them. But we manage the company.”
‘It’s like working 30 minutes extra a day for free,’ driver says
The speed reduction, implemented in June, has angered many drivers at TForce Freight who have already viewed the new owner with skepticism. The change effectively extended the working day of linehaul drivers who run regular schedules while reducing the maximum daily earnings potential for others.
“That may not seem much, but it adds 30 minutes a day to your run,” said a TForce driver, who spoke on the condition that his name isn’t used “And since you’re paid by the mile it’s like working 30 minutes extra a day for free.”
Another driver, who spoke on the condition of anonymity, said the speed reduction has hit morale — particularly since TFI’s rollout of new trucks has been slow.
“We’re spending more time on the road, less time at home, driving old equipment,” the driver said. “You get a worse attitude.”
Bedard told analysts in July that the company reduced the speed of trucks “to be safer on the road.”
“When we bought the company, the trucks were running at 68 miles per hour and then we did the study of our peers in the U.S. and we found out that everybody is at 65. So why run 68? Well, it’s because, you know, nobody knows why,” he said.
Reducing truck speeds is part of a long list of measures TFI has been taking to improve profits at an LTL operation that struggled to make money under UPS (NYSE:UPS). In the first months of ownership, TFI brought TForce’s operating ratio, from a barely profitable 99% to below 95%.
The company accomplished that largely by cutting or repricing unprofitable freight from its network. Recently, it laid off a significant number of sales staff.
TFI is hoping that a promised refresh of TForce’s aging truck fleet would amount to a win-win for the company and drivers. But the rollout has been slower than expected amid delivery delays from manufacturers.
Drivers said speed reduction and lack of new trucks are contributing to the wave of post-acquisition departures — and TForce’s struggles to replace them.
“It was the last straw for some,” a driver said.
Cutting truck speeds gains traction, but TForce driver sees ‘accident waiting to happen’
The idea of reducing truck speeds has gained traction in recent years with proponents arguing it improves safety and fuel economy. Bipartisan legislation, the Cullum Owings Large Truck Safe Operating Speed Act, would cap the speed of commercial vehicles at 65 mph, or 70 mph with certain safety technologies in place.
The bill’s backers include the American Trucking Associations, Truckload Carriers Association and Alliance for Driver Safety & Security. But the Owner-Operator Independent Drivers Association opposes it, saying it would make the roads more dangerous by increasing the speed difference between trucks and passenger cars.
The Teamsters do not appear to have taken a stance on the bill. But in Canada, the union came out against Ontario’s speed limiter legislation in 2009, though it subsequently became law.
A TForce driver disputed the benefits of the change.
“It’s an accident waiting to happen,” the driver said. “We’re stuck in the slow lane with people trying to get around us, people tailgating us.”