Pensions dominate Teamsters’ talks with UPS, freight carriers

http://www.logisticsmgmt.com/article/CA6454567.html

Pensions dominate Teamsters’ talks with UPS, freight carriers
John D. Schulz, Contributing Editor
Logistics Management
June 22, 2007

WASHINGTON—The good news for shippers following two separate current Teamsters union negotiations with UPS and a handful of less-than-truckload (LTL) carriers is there is scant chance of a national strike as happened 10 years ago when Teamsters walked out for 15 days against UPS and when they struck the LTL sector in 1994.

The bad news for shippers who like to stay abreast of these talks is these negotiations may be the most complex and complicated set of union contract negotiations since James R. Hoffa, father of the current Teamsters president, negotiated the first National Master Freight Agreement in 1957.

First, some basics. The UPS contract covering 246,000 Teamsters (79,000 full-time and 167,000 part-time) expires July 31, 2008. A separate contract covering an addition 65,000 Teamsters in the LTL sector (including 46,860 at YRC Worldwide and 9,372 at Arkansas Best) expires next March 31. A third set of negotiations covers about 125 Teamsters at a UPS Freight terminal in Indianapolis, but that likely will not be finalized until after the main UPS contract is negotiated.

Wages are not really the major issue in these talks. Workers in both the small package and freight industries can more or less count on 30-to-40 cent hourly increases in each of what is expected to be a five- or six-year contract, according to sources on both the company and union sides.

A UPS Teamster today earns $27.27 an hour ($1,090 per week gross, plus an additional $467 in health, welfare and pension payments). A freight Teamster makes about $22.31 an hour ($892 per week, plus additional $267 in health, welfare and pension payments. UPS drivers will get another $1 an hour increase August 1, and $.60 hour fringe benefit increase also on August 1. UPS drivers earn roughly $5 more per hour than a comparable city driver for a freight carrier. In August, that rises to $6 more.

What makes this set of negotiations so complicated can be covered in one word – pensions. Or, specifically, pension withdrawal liability.

FULL story at link.