Teamsters and ArcBest negotiators continue to work toward a labor contract agreement for the more than 8,000 union drivers with ArcBest subsidiary ABF Freight. The existing five-year contract expires June 30, and the drivers have already authorized a strike.
According to the Teamsters, negotiators for both parties are still in Kansas City, Mo., working toward another long-term contract. Teamsters’ National Freight Director John Murphy said in a May 26 social media post that the parties were getting closer to an agreement, but drivers and other unionized workers at ABF are ready to strike if no agreement is reached by June 30.
“We are down to a handful of critical open issues. It is our hope to reach a tentative agreement in time to have it ratified prior to the expiration of the current agreement and avoid a work stoppage,” Murphy said in the social media post. “The rank-and-file members at ABF showed their support for their negotiators by recently voting by over 97 percent in favor of authorizing a strike should it be necessary. Such strong support for the union negotiating team by the ABF members will undoubtedly help us get the best possible result.”
ArcBest declined to comment about the contract negotiations.
ABF is the largest subsidiary of Fort Smith-based ArcBest, and any strike could be a financial hit for the shipping and logistics company. ArcBest’s 2022 full-year revenue was $5.324 billion, up 33.7% compared with 2021 revenue. Full-year net income was $298.209 million, up 39.6% compared with 2021. Full-year revenue at ABF was $3.01 billion, above the $2.573 billion in 2021. ABF operating income in 2022 was $381.133 million, better than the $260.707 million in 2021.
Stephens Inc. analysts Jack Atkins and Grant Smith said in a May 26 investor note that the strike authorization is part of the negotiations with ABF and other carriers.
“On Wednesday, the Teamsters announced that a strike authorization was nearly unanimously approved by ABF members. While we don’t believe tensions rose to this level in 2013 or 2018 (strike authorization did not come close to passing in 2013), we believe this decision is most likely a negotiating tactic ahead of the June 30 deadline, and more importantly a show of strength to UPS and the other negotiations following (ArcBest),” according to the investor note.
As of Tuesday (June 5), Teamsters were preparing for a strike authorization vote against UPS. The Teamsters say they have more than 340,000 members who work for UPS who are “ready to take militant action to win a strong contract and reset standards for worker power in America.”
ArcBest shares (NASDAQ: ARCB) closed Tuesday at $85.32, up $1.17. During the past 52 weeks the share price has ranged between $104.87 and $66.35.