May 16, 2019 12:30 PM, EDT

YRC Worldwide, Teamsters Enter Into Five-Year Contract

Teamsters buildingThe International Brotherhood of Teamsters building in Washington. (TT file photo)

A fully ratified, five-year labor contract among less-than-truckload carrier YRC Freight, regional LTL carriers Holland and New Penn Motor Express, and the International Brotherhood of Teamsters went into effect May 14, covering an estimated 24,000 workers, YRC Worldwide announced.

The company and the union agreed on a $4 hourly wage increase over five years that is equal to an 18% jump in salaries for most drivers and dockworkers, the Teamsters said. Certain support staff hired after February 2014 also can expect wage hikes, including a $1 an hour increase. The pay raises and other economic improvements are retroactive to April 1.

“The ratification of the contract is good for our employees, our shareholders and our customers. Having a five-year agreement is a very positive event for YRC Worldwide, supporting a more market-competitive wage and benefit package for our employees while providing operational benefits that will allow us to provide reliable and efficient services to our customers,” YRC Worldwide CEO Darren Hawkins said in a company statement.

The final piece of the deal came together May 3, when supplemental documents were ratified by union membership. The parties have been operating under an agreement originally negotiated in 2010 but not ratified until January 2014. That contract included cuts in wages and benefits as part of an effort to help the company recover from the economic downturn in 2009. Under the new deal, some workers will get back a week of vacation time. According to the Kansas City Star, the vacation time was a concession the union made to YRC back in 2015.

YRC Freight truck

Drivers and dockworkers for YRC Freight can expect a $4 hourly wage increase over five years in the new deal. (TT file photo)

The existing labor contract was set to expire March 31, but was extended to May 31 to allow time to work out specific contract language and resolve supplemental issues, according to the Teamsters.

The new agreement also includes some compensation limits for YRC Freight’s executive ranks. Under the agreement, for every dollar that YRC executives receive in bonuses, the bargaining unit gets $2 split equally among the members, according to a Teamsters document. In other words, $5 million in bonuses in a given year paid to YRC executives would mean the union would get $10 million to share among members.

“The national contract will now take effect, and I want to thank all our members for their support during this long process,” said Ernie Soehl, national freight director and co-chair of the Teamsters National Freight Industry Negotiating Committee. “It is anticipated that any [retroactive] pay will be distributed within the next 30 days.”

YRC noted in a May 8 conference call that reports concerning the new labor deal helped its business. “Once the tentative agreement came out, we did start seeing the [tonnage] declines lessen,” Hawkins said on the call. “He added that the company, “did the right things” in terms of keeping shippers abreast of the contract talks, and added, “We hope that our customers reward us for that.”

For the first quarter, the company reported a $49.1 million net loss on $1.18 billion in total revenue.

Going forward, YRC and the Teamsters have agreed to experiment with changes designed to stabilize the workforce and improve the efficiency of freight operations. In November, the two sides launched two pilot programs. One created driver positions for employees without commercial driver licenses to make local deliveries. The other extended the time that pickup and delivery drivers could work from 60 hours over a seven-day period to 70 hours in eight days with a 34-hour restart.

“In addition to creating a unique opportunity for [YRC Worldwide] to make investments in the near-term, the ratified contract also positions the company to improve our profitability in 2020 and beyond by taking full advantage of the new operational tools provided for in the contract, in addition to the implementation of our ongoing network optimization plan,” Hawkins said in a statement.

YRC Worldwide ranks No. 6 on the Transport Topics Top 100 list of largest for-hire carriers in North America, and YRC Freight ranks No. 2 on TT’s list of the top for-hire carriers in the less-than-truckload freight sector.

Transport Topics Staff Writer Daniel P. Bearth contributed to this report.