ABF National Master Freight Agreement Now Ratified, To Take Effect November 3
- New agreement to result in net savings of $55 million to $65 million on an
FORT SMITH, Ark., Oct. 30, 2013
FORT SMITH, Ark., Oct. 30, 2013 /PRNewswire/ -- Arkansas Best Corporation
(Nasdaq: ABFS) today reported that the national five-year labor agreement for
less-than-truckload carrier ABF Freight System, Inc. is now ratified and will
take effect on November 3, 2013 and run through March 31, 2018.
The new ABF National Master Freight Agreement achieves the company's stated
goals of putting ABF Freight on a path to profitability by allowing the
company to reduce costs and become more competitive, while preserving the
best-paying jobs in the freight industry for ABF employees represented by the
International Brotherhood of Teamsters.
The contract implementation follows the failure of a strike authorization vote
on October 29 by employees covered by the Central Region Local Cartage
supplement. The national contract was ratified by a majority of Teamster
employees on June 27, 2013, and 26 of 27 supplements were ratified by October
Members of the Teamsters' ABF National Negotiating Committee were polled today
following the failure of the strike vote on Tuesday, and the Committee
determined that the contract is now ratified, paving the way for the November
3 effective date of the national and all supplemental agreements.
"On behalf of all of the people and customers who depend upon ABF Freight, we
are pleased that this final step in our lengthy contract negotiation process
is now complete," said Arkansas Best President and Chief Executive Officer
Judy R. McReynolds.
"This new labor agreement follows several years of sacrifice from our
non-union employees," McReynolds added. "As the transportation and logistics
market continues to rapidly evolve, we are grateful that our union employees
have also recognized the need for ABF Freight to operate much more efficiently
so that we can better serve our customers every day."
While the new contract is a significant step toward restoring ABF to its
historic profitability, there is more work to be done in a highly competitive
LTL marketplace, said ABF President and Chief Executive Officer Roy Slagle.
"The implementation of our national five-year agreement is a significant step
for our company and we are very pleased to move forward," Slagle said.
"However, this is just one of several initiatives that we are focused on as we
continuously look for ways to improve the efficiency of national operations on
behalf of our customers."
The new labor agreement will result in an estimated net savings between $55
million to $65 million on an annualized basis. This estimate is net of the
August 1, 2013 union health, welfare and pension increase. Approximately 75
percent of that annualized amount will be reflected generally pro-rata, in
monthly operating results beginning immediately, with the rest expected to be
fully realized over the next 24 months.
Savings come from wage and vacation reductions and from work-rule and
flexibility components of the contract. The exact amount of savings will
depend on the actual level of productivity gains that ABF is able to achieve
through those work-rule changes and flexibility components.
Wage reductions for Teamster employees will be applied effective the week of
November 3, 2013. Increases to health, welfare and pension (HW&P) will be
retroactive to August 1. Those accrued HW&P costs have been included in ABF's
third quarter 2013 financial results that will be reported on November 11.
Arkansas Best Corporation, headquartered in Fort Smith, Arkansas, is a freight
transportation services and solutions provider. Through its various
subsidiaries, Arkansas Best offers a wide variety of logistics solutions
including: domestic and global transportation of less-than-truckload ("LTL")
and full load shipments, expedited ground and time-definite delivery
solutions, freight forwarding services, freight brokerage, oversight of
roadside assistance and equipment services for commercial vehicles, and
household goods moving market services for consumers, corporations, and the
military. More information is available at arkbest.com, abf.com and
As the principal subsidiary of Arkansas Best Corporation, ABF operates as a
global provider of customizable freight and logistics solutions. ABF enhances
supply chain efficiencies and achieves optimum performance by focusing on
specific customer needs and customizing innovative solutions. The company's
resource-rich infrastructure includes an innovative Dual-System® Network for
regional and national transportation. Its portfolio of services extends from
the manufacturer's floor to expedited and time-definite final delivery. In
between, customers benefit from a single point of contact and total end-to-end
The following is a "safe harbor" statement under the Private Securities
Litigation Reform Act of 1995: Statements contained in this report that are
not based on historical facts are "forward-looking statements." Terms such as
"anticipate," "believe," "estimate," "expect," "forecast," "intend," "plan,"
"predict," "prospects," "scheduled," "should," "would," and similar
expressions and the negatives of such terms are intended to identify
forward-looking statements. Such statements are by their nature subject to
uncertainties and risk including, but not limited to, a workforce stoppage by
our employees covered under our collective bargaining agreement or unfavorable
terms of future collective bargaining agreements; general economic conditions
and related shifts in market demand that impact the performance and needs of
industries served by Arkansas Best Corporation's subsidiaries and/or limit our
customers' access to adequate financial resources; relationships with
employees, including unions; union and nonunion employee wages and benefits,
including changes in required contributions to multiemployer pension plans;
competitive initiatives, pricing pressures, the effect of volatility in fuel
prices and the associated changes in fuel surcharges on securing increases in
base freight rates and the inability to collect fuel surcharges; availability
of fuel; default on covenants of financing arrangements and the availability
and terms of future financing arrangements; availability and cost of reliable
third-party services; disruptions or failures of services essential to the use
of information technology platforms in our business; availability, timing, and
amount of capital expenditures; future costs of operating expenses such as
fuel and related taxes; self-insurance claims and insurance premium costs;
governmental regulations and policies; future climate change legislation;
potential impairment of goodwill and intangible assets; the cost, timing, and
performance of growth initiatives; the impact of our brand and corporate
reputation; the cost, integration, and performance of any future acquisitions;
the costs of continuing investments in technology, a failure of our
information systems, and the impact of cyber incidents; weather conditions;
and other financial, operational, and legal risks and uncertainties detailed
from time to time in Arkansas Best Corporation's Securities and Exchange
Commission ("SEC") public filings.
Investors: Mr. David Humphrey, Vice President, Investor Relations
Telephone: (479) 785-6200
Media: Ms. Kathy Fieweger, Vice President, Marketing and Corporate
Telephone: (479) 719-4358
SOURCE Arkansas Best Corporation
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