Jindel said that if a deal comes to fruition, it will likely be similar to YRC's but with a 10 percent wage reduction, as well as some pension concessions.

This news comes at a time when the LTL sector continues to face an uphill battle, due to overcapacity in the sector, low tonnage, and declining rates. The Teamsters noted in March that in 2009 ABF Freight incurred an operating loss of $99.9 million, which represents "a $150 million swing in performance for the trucking company when compared to the $49 million operating profit ABF posted in 20008." And the Teamsters also pointed out that ABFS and other non-union LTL carriers like FedEx Freight, Con-way Freight, and Saia have been exhausting cash reserves at an alarming rate to fund operating losses since December 2008.

J.P. Morgan analyst Tom Wadewitz wrote in a research note that an agreement between ABF and the Teamsters could take only a few days, because they have already had preliminary talks with local ABF union leaders, which provided an indication that the membership may support concessions for ABF.

"We believe that the announcement of negotiations between the Teamsters leadership and ABFS indicates an agreement is likely in the near term," wrote Wadewitz. "Our sense is that an agreement would likely be approved by leadership (two man meetings) at the local unions. However, ratification by membership is much less clear as ABFS is in a significantly stronger financial position than YRCW, which did not easily achieve the support of its membership."


LTL news: ABF, Teamsters set to begin negotiations - 2010-04-08 17:06:53 | Logistics Management