ABF to withdraw from National Master Freight Agreement

ABF Freight System, Inc. has expressed its intent to withdraw from the National Master Freight Agreement (NMFA) by the end of March.

This development would affect the trucking industry in various ways, including the 7,000 members of the union. It would also make ABF's rival, YRC Worldwide Inc., the lone major less-than-truckload (LTL) carrier part of the pact.

According to ABF President and CEO Roy M. Sagle, the trucking company, which is based in Fort Smith, Arkansas, wants to lay out a fresh and different labor agreement with the Teamsters Union. The letter, dated August 13 and addressed to president James P. Hoffa and the union's freight division president Gordon Sweeton, contained ABF's willingness to get into negotiations again soon after their collective bargaining pact expires on March 30.

ABF's decision shows clearly what its stand is on the labor compacts of this particular industry, i.e. it believes the pact does not serve its best interest, economic-wise and legal-wise. As a matter of fact, in 2009 and 2010, three concessionary agreements negotiated by the Teamsters triggered ABF to file for a violation of the NMFA tenets against the union, citing that those were illegally done, leaving ABF in a drawback. However, the charge and a proposition to compromise, were dismissed by an Arkansas federal district judge.

About half a decade ago, around 400,000 employees were covered by the NMFA, but due to changes in the labor codes, consolidations, and losses, membership has gone downhill.

Analysts have cautioned ABF to lay low a little bit, suggesting that the company's financial and other resources are better utilized in realizing a more efficient contract. They also said unnecessary expenses on this legal battles could put ABF into trouble as it is known to have the highest labor costs among all LTL carriers.