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In spite of lawsuit, ABF says relationship with Teamsters largely beneficial

By: 27 March 2011 No Comment

It’s old news by now — Fort Smith-based Arkansas Best Corp. (NasdaqGS: ABFS) filed suit against the Teamsters union in November.

What might surprise some is that Arkansas Best still regards its relationship with the Teamsters are largely beneficial. Arkansas Best is the parent company of ABF Freight System, a less-than-truckload carrier employing about 7,000 union drivers.

ABF took issue with certain concessions given by the Teamsters to YRC Worldwide, an Overland Park, Kan.-based less-than-truckload carrier employing about 25,000 union drivers. ABF filed its lawsuit asking for $750 million in damages that it suffered due to the alleged competitive advantage YRC was given in the marketplace due to the concessions. The complaint was dismissed in December by U.S. District Court Susan Webber Wright (Eastern District of Arkansas) for want of jurisdiction.

ABF appealed that decision on March 21 to the appellate court in St. Louis. David Humphrey, ABF spokesman, said the reason for the lawsuit is pretty simple — YRC was able to negotiate some concessions that ABF couldn’t, thus putting the Fort Smith company at a disadvantage in the highly-competitive trucking industry.

“This just has to do with leveling the playing field,” Humphrey said.

He was quick to point out, however, that his company’s relationship with the International Brotherhood of Teamsters has been largely beneficial.

“We’ve always believed we have a good relationship with our employees,” Humphrey said. “We get a lot of good things out of our employees.”

Humphrey said a labor agreement with the Teamsters and the general desirability of a job in the less-than-truckload segment has translated into longevity. Employees who have been with the company for years gain experience and that translates into solid safety records and fewer claims for damaged freight than some other trucking companies might have.

As for safety, Humphrey pointed out ABF won the President’s Trophy for Safety from the American Trucking Associations for the sixth time in September. As for damages, the company reports that less than one percent of the freight it has handled in the past decade has received a damage claim.

Low turnover, Humphrey said, is a big factor in the damage claim rate and safety awards the company enjoys. Plus, longevity saves the company money.

“Our jobs are attractive and our turnover rate is two to three percent a year,” he said. “We have experienced people — when we train them, they stick with us.”

In addition to union benefits, Humphrey said jobs with ABF are desirable because of the very nature of the industry. Unlike typical truckload carriers, ABF drivers spend — at most — two nights away from home and at times leave in the morning with a load and return the same night.

How is that possible? The relay system used by ABF and some other carriers. Here’s how that works. Let’s say you’ve got a truck driver in central Arkansas who picks up a load in Little Rock and takes it to another ABF terminal in eastern Oklahoma. That driver will switch loads with another driver bound for Little Rock. The central Arkansas driver returns to Little Rock and heads home the same evening.

“You can have a normal life,” Humphrey said of his company’s drivers. “You can go to a little league baseball game, you can go watch your daughter’s dance recital — that kind of thing.”

The appeal of a “normal life” not only leads to low turnover — it also means ABF gets a flurry of applications when a job comes open and officials can be highly selective as to which drivers work for the company. Humphrey said that low turnover rate means officials are careful to select quality drivers.

“Once we add somebody, they’re going to be with us for some time,” he said, adding union negotiation has bumped up salaries but that’s not an entirely bad thing. “Sometimes, you get what you pay for.”

Humphrey said the lawsuit is unfortunate, but said ABF is confident the productive relationship the company has had with the Teamsters will continue.

About: Ethan C. Nobles:
Benton resident. Rogue journalist. Recovering attorney. Email = Ethan@FirstArkansasNews.net.

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