It appears less-than-truckload carrier Yellow Corp. and the Teamsters will renegotiate their labor contract a year early as the two parties have failed to come to terms on proposed network changes, a spokesperson with Yellow confirmed to FreightWaves on Monday.
“On Friday, our board of directors voted to open our National Master Freight Agreement contract, something the IBT suggested several weeks ago,” Yellow said. “Completing One Yellow is essential to our company’s modernization efforts and is necessary for us to maintain and strengthen jobs while we compete against non-union carriers. Opening the contract early requires agreement from both parties; we have notified the IBT of that board decision and await a response.”
After a change of operations (COO) at Yellow’s (NASDAQ: YELL) YRC Freight and Reddaway terminals in the West was approved and implemented last year, union brass has said it is not on board with similar changes at regional carriers Holland and New Penn.
The last phase of Yellow’s multiyear restructuring, which seeks to integrate its brands into a superregional model, increase freight density and lower operating costs, would impact more than 200 terminals in the East, Central and South regions.
The carrier started the overhaul by realigning management teams, creating one sales team for its different brands and bringing all of the operating companies onto the same tech platform. The COOs are expected to eliminate redundancy throughout the network, including scenarios where multiple drivers from different carriers call on the same customer locations.
The entirety of the process includes the closure of 28 terminals, the proceeds from which are being used to pay down Yellow’s roughly $1.6 billion in debt. Yellow has been unable to achieve consistent profitability and maintains the changes are vital to its survival.
A key sticking point in negotiations has been the creation of additional utility positions, requiring drivers to work freight on the docks and at facilities within 175 miles of their home terminal. Changes would also merge seniority lists, requiring some workers to rebid for jobs.
The International Brotherhood of Teamsters said its members have given enough over the past several years in the form of “literally billions of dollars in wage and pension concessions” and that the latest COO violates current contract supplements and is a mere workaround, allowing Yellow to make changes without opening the contract.
“The concession stand is closed,” Teamsters National Freight Director John Murphy told members on a Wednesday update call.
He said he recently informed Yellow to stop meeting with members about the COO and advised local unions to prepare to file unfair labor practices charges if the company attempts to negotiate directly with its members.
Yellow had been conducting meetings with local unions regarding the proposed changes. Some of the feedback gleaned from those sessions was used to craft revised COOs after the first take was shot down by union leadership. Recently, Yellow challenged union heads to put the changes to a vote, saying it was certain it would win.
Union leadership ultimately rejected those changes on March 23 without a vote by membership. The following day the union doubled down on its hard-line stance, giving Yellow a 30-day notice that it would no longer be able to use purchased transportation to move its freight.
Murphy said opening the contract, which expires March 31, 2024, and covers more than 22,000 member employees, is the only fair course of action. But he cautioned that in doing so, “The company will need to come up with sufficient financial improvements.”
He pointed to flaws in the current deal, claiming that wages are “way too low and below standard” and that Yellow has “at least a $5 per hour, per employee labor cost advantage over ABF [ArcBest], our other legacy national master freight agreement carrier.” He also said that Yellow’s pension contribution rate is down to just a little more than 25% of the rate it contributed in 2009.
Yellow has a 3% annual wage increase of 80 cents per hour slated for 2023, with the first half beginning in April and the second half starting in October. The company also implemented a 37-cent cost-of-living adjustment in April.
The Teamsters will now be negotiating contracts with Yellow, ArcBest (NASDAQ: ARCB), TForce Freight (NYSE: TFII) and UPS (NYSE: UPS) this year.
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Joe mccallum
I left because of bad management and working conditions. Yellow is and probably always will be toxic. The most teamster hating outfit in the industry. Somehow they always come out on top. Like a cockroach, you can stomp it,set it on fire,cut its head off and the damn thing will walk away. I pray every night for my brothers and sisters who still work there. I hope that something good comes if all this chaos and turmoil. I really do!!!
One Yellow Family
Remember you have a growing number of non-union carriers growing market share and regardless of who is to blame for the financial situation the company is in, each side needs to work together to keep the company competitive or the market will decide the fate of Yellow. If Yellow does go the way of the many union carriers that are closed, your Union Leadership will still have jobs etc. Good luck getting hired at a non-union carrier. Let’s work together, grow together Yellow strong!
Steve
Hopefully we see ABF contract monies before vote. We screwed ourselves to many times. We got Yellow Teamsters keep getting shafted. Stay Strong on Negotiations!
John
Am I wrong but didn’t yellow freight get a $750 million bail out am I wrong please tell me
Chip Rodriguez
Absolutely no to opening up the NMFA by greedy Yellow Freight. This company is notorious and has a history of opening up the contract mid term and gutting it to their benefit. If the rank and file approaches Yellow Freight about a raise for example, their immediate response is, sorry, you need to wait till contract time. It is time for Yellow Freight to sink or swim.
Jeff Anderson Local 916 Springfield, IL
When we listen to Management they always talk about paying back all of their loans to every Tom, Dick, and Harry but I never heard them to thank us, or better yet our families, for giving them billions of dollars in wage and pension concessions. Our pension concessions alone amount to $4,950,000 per week. A pension is a raise in wages taken in the future so we can live in comfort and not have to rely on our kids to pay for our meds and change our diapers. This doesn’t include all the wages we gave up! I was comforted in the “Concession Stand” is closed. I feel we have elected the right team to fix this mess we are in. Now it’s up to the General Membership to make sure we stand with our leadership so Yellow knows we mean business.
Dick Bischoff
The Teamsters blame management and management blames the teamsters for their 20 years of financial misery. Truth is they are both to blame! It does look like Yellow’s time is drawing near. The union boneyard is calling them home.
Joseph Poole
Fight for what’s right. Hopefully Judgement day has come.