Teamsters set to vote on ABF labor agreement; contract details published

International Brotherhood of Teamsters members who work for ABF Freight are set to vote on a new five-year labor agreement that includes an immediate per hour raise of $3.50, and establishing Martin Luther King Jr. Day as a paid holiday. The existing contract expires June 30.

Teamsters leaders recently met in Chicago and approved the contract for a member vote. The Teamsters estimates that more than 8,500 members are ABF employees.  The agreement was praised by Teamsters, with Teamsters General President Sean O’Brien saying it will charter “a new course for the entire freight industry.”

“This committee did a fantastic job and worked hard to secure this very strong tentative agreement,” John Murphy, Teamsters national freight director, said in a statement. “Their months of dedication and resolve have resulted in a comprehensive agreement that addresses members’ top priorities and secures significant economic gains and non-economic improvements.”

Fort Smith-based ArcBest, parent company of ABF, noted in a Thursday (June 15) filing with the U.S. Securities and Exchange Commission, that it also supports the contract.

“ABF’s goal throughout the negotiation process has been to reach a fair agreement that pays market-based wages and benefits and allows employees to continue sharing in ABF’s success while enabling ABF to grow and make necessary investments in the business,” the company noted. “In general, the proposed contract provides for annual wage increases, which will allow ABF to recruit and retain a highly tenured, experienced workforce during a time when driver shortages are common. It also provides for location-specific wage increases as needed to support hiring where recruiting has been challenging, which should reduce cartage expenses in those areas.

ABF is the largest subsidiary of Fort Smith-based ArcBest, a 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.

Following are key contract details, according to the Teamsters and ABF.
• Members will receive a $3.50 per hour raise effective July 1, 2023, with a total of $6.50 in raises over the life of the agreement. The wage increase in year one alone surpasses those of the entire previous contract.

• MLK Day has been added as a new paid holiday.

• Starting Jan. 1, 2024, two additional annual paid sick days will be added to the contractual minimum, increasing the minimum number of paid sick days from five to seven.

• ArcBest is required to increase its contributions to health, welfare, and pension plans, with a total of $4.46 per hour of additional contributions over the term of the agreement.

• The tentative agreement prohibits the use of what the Teamsters referred to as “invasive technology,” such as inward-facing cab cameras, audio recorders, body sensors, and biometric technology. It also ensures protections against the use of autonomous vehicles or freight transportation without drivers/operators, safeguarding job security.

• The agreement also allows ABF to offer higher wages at some locations based on cost of living and other factors. ABF has to notify the bargaining committee prior to offering higher wages.

• A profit-sharing bonus is also part of the proposed new contract. All qualified employees will receive a 1% bonus for a published operating ratio (OR) of 91.1% to 93%, a 2% bonus for an OR between 91% and 89.1%, a 3% bonus for an OR between 89% and 87.1%, and a 4% bonus for an OR of 87% and under. An operating ratio measures how much it costs to earn a dollar. A 90% operating ratio means the company spent 90 cents to earn a dollar.

Link here for a PDF of the ArcBest federal filing that includes contract details.