January 13, 2014 2:00 AM, EST

UPS Freight Teamsters Vote on New Five-Year Contract

By Rip Watson, Senior Reporter

This story appears in the Jan. 13 print edition of Transport Topics.

The tentative agreement between UPS Freight and employees represented by the Teamsters went to a vote last week, seven months after the company’s original proposal was rejected by a wide margin.

The union had announced Jan. 6 that local leaders had backed the proposal. The tentative agreement offers a $2.50-per-hour wage increase over a five-year contract and covers 13,000 workers.

A vote on the contract was scheduled for Jan. 11-12, after Transport Topics went to press. UPS Freight workers could vote only if they attended a meeting where the contract was explained to them.

The initial UPS Freight contract was rejected by nearly 70% of voters.

“We are pleased that there is a handshake agreement for the UPS Freight contract,” company spokes­man Andy McGowan told TT. “We continue to make progress and work with the Teamsters to finalize the remaining local agreements.”

UPS continues to negotiate local agreements to its contract with more than 235,000 package workers. That deal was approved at the national level in June, with provisions for a $3.90 wage increase over five years.

Talks continue, attempting to resolve five of those local agreements that haven’t yet been ratified. Once the local deals all are approved, the largest transport industry labor contract can take effect.

The union posted the 49-page, tentative Freight agreement on its website.

In addition to the wage in-crease, the union said, the agreement includes improved pension benefits for 80% of members, lower health-care payments — while maintaining an option without any employee contribution — reduced subcontracting, enhanced job guarantees and lowered retiree health-care costs.

The Teamsters said approving the deal would make UPS Freight workers the highest-paid workers in the less-than-truckload sector.

The UPS Freight tentative agreement would give local drivers a top wage rate of $26.65 per hour, excluding the value of pension and health benefits. On that basis, ABF Freight System’s top rate now is $22.79. YRC Worldwide didn’t provide its wage rates.

Teamster workers at other LTL carriers now are working at reduced wages that were agreed to as ABF Freight System and YRC Worldwide struggled financially.

ABF workers last year ratified a contract that begins with a 7% wage cut and gradually brings them back to full wages when the contract ends in 2018.

ABF returned to profitability last year following earlier losses.

YRC Teamsters have been working for more than three years at 15% lower wages as its losses persist.

The activist group Teamsters for a Democratic Union de-scribed the new tentative agreement as “lipstick on a pig” because almost no changes were made from the original proposal.

“This is a quickie vote,” said TDU spokesman Ken Paff, adding that it was unprecedented to bypass a vote by mail on a national contract. “It is very unfair. This would be illegal if you were voting for Congress, or even dogcatcher.”

Paff also said the procedure was intended to suppress the vote.

The union didn’t provide additional comment on the voting process.

Other recent union contract votes have been done by mail ballot. Those included the balloting on contract revisions at YRC that were contained in a memorandum of understanding.

That issue was decided by mail ballot with a deadline of last week. ABF Teamsters voted last year by mail on their LTL contract.

UPS Freight continues to be primarily an LTL carrier. That business accounted for 87% of UPS Freight revenue, which totaled $2.17 billion over the first nine months of 2013. LTL revenue rose 6% to $1.89 billion over that period.

UPS Freight also has a nonunion truckload operation. That business has increased 46% over the first three quarters of 2013 to $284 million.