Teamsters at ABF Freight System rejected a 15 percent wage cut in May, convinced the company could improve its bottom line without labor concessions
Fort Smith,AR,USA -The Journal of Commerce, by William B. Cassidy -November 9, 2010: ... They were right -- ABF trimmed its operating loss to $2.6 million in the third quarter, after losing $35.7 million and $12.6 million in the first and second quarters... But the cost of rejecting those concessions is clearer now, too. The less-than-truckload carrier would have made significant gains on its competitors in the third quarter if its Teamster employees had approved the contract proposal... ABF estimates the concessions it sought from the union would have saved it about $74 million a year, $18.5 million a quarter. An analysis by SJ Consulting Group puts the actual third-quarter savings ABF would have enjoyed at $18 million... That would have been enough to bring ABF back to profitability in the third quarter, with an operating profit of about $15.4 million and an operating ratio of 96.2... Under the original ABF proposal, some of the wage cuts would have been returned to employees at that level of profitability, giving ABF an OR of 96.8, SJ Consulting said... But the company will have to compete with stronger carriers with several quarters of profit behind them. That's something to think about before the next contract vote... (Photo from hankstruckpictures: ABF's rare White truck)Labels: trucking industry news USA
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