Friday, December 12, 2008

Teamsters agree to wage cuts at YRC as company struggles

The parent company of Yellow Transportation and Roadway got swift approval from the Teamsters union for a wage rollback of up to 15% for their 40,000 unionized employees. The agreement could save YRC some $400 million in the coming year, and the company urgently needs the relief to stay on the road. The largest LTL carrier in the country, YRC faces debt of approximately $1 billion, plummeting stock value, and declines in business and revenue as the economy contracts.

 The agreement with the Intl. Brotherhood of Teamsters was announced just days after talks were announced, and is expected to be ratified this month. Throughout the industry, shippers and other carriers are taking note. ABF Freight System, another unionized LTL carrier, said they might seek their own package of concessions from the union.

The news from YRC is just the latest indication of the highly volatile state of the transportation sector, with fuel prices fluctuating sharply, carriers like DHL calling it quits in the US, and economic uncertainty the only sure thing on the horizon. In this environment, smart shippers will want to do two things – keep their options open, and work with knowledgeable, independent logistics experts to make sure they are not blindsided by events.

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