Teamsters score a win against “sharecropping on wheels.” But will the trucking industry really change?
Along with auto technicians, fast food workers, and baggage handlers, another profession has been hit by the separation of labor from employer: Port truckers, who haul containers from cargo ships on short trips around the terminal. Years of deregulation have led to more of them being classified as "independent contractors," with lower pay and fewer rights, rather than unionized employees.
Yesterday, however, they took a step in the other direction, with a National Labor Relations Board determination that could start to reverse the trend.
Click here to read more at The Washington Post.
A string of actions by state officials and the National Labor Relations Board has strengthened the hand of truck drivers who say they need union representation to improve pay and working conditions for the thousands who transport cargo out of the ports of Los Angeles and Long Beach.
In a settlement this week, one major trucking company agreed to post notices acknowledging the workers’ right to organize — not previously a given because drivers were treated as contract workers, who are not subject to unionization. The agreement comes after repeated victories at the state Labor Commissioner’s office, where 30 drivers have won decisions against 11 port trucking firms, awarding them $3.6 million in wages and penalties.
Click here to read more at the Los Angeles Times.
On Tuesday, the less-than-truckload carrier (Nasdaq: YRCW) sent a notice to stockholders inviting them to the annual stockholder meeting April 29 at the company’s Overland Park headquarters.
The notice advised stockholders that they will be asked to vote on the makeup of YRC’s board, the compensation package for its executives, its incentive and equity award plan, and the retention of accounting firm KPMG LLP as the company’s independent public accounting firm.
The filing details how much YRC's top executives earned in 2013. Here’s the total amount of salary, stock awards, incentives and bonuses awarded to them in 2013 and 2012, according to the filing:
- CEO James Welch earned $2,170,630, an increase from $1,968,324 in 2012.
- CFO Jamie Pierson earned $1,999,223, an increase from $1,200,172 in 2012.
- Michelle Friel, executive vice president, general counsel and secretary at YRC Worldwide, earned $966,161, a decrease from $1,166,508 in 2012.
- Former YRC Freight President Jeff Rogers, who was fired in September, earned $726,236, a decrease from $1,558,433 in 2012.
In addition, some YRC executives recently have generated additional income by selling their stock in the company. Dozens of these trades have been made since YRC successfully refinanced $1.4 billion in debt that was to come due this year and next.
According to trading data on sales and disposition of YRC stock since Feb. 26, collected from SEC filings by Yahoo Finance, Welch has sold $2,701,454 worth of shares, Pierson has sold $2,087,448, and Friel has sold $1,509,409.
MAEVA Group earns $12.5M
The filing also provided further details to compensation New York-based MAEVA Group LLC received in 2013 and 2014.
In accordance with an advisory agreement MAEVA and YRC signed in February 2013, MAEVA was paid a $5.5 million completion fee and $3 million in monthly retainer fees. YRC paid MAEVA $500,000 in monthly retainer fees for two months of service in 2014 and paid an additional $3.5 million incremental fee to MAEVA in recognition of its contribution to the company’s debt refinancing in early 2014, the filing said.
In total, MAEVA was paid $12.5 million between February 2013 and March 2014, the filing said. Harry Wilson, who served on YRC’s board of Directors from July 2011 until March 2014, is chairman and CEO of MAEVA.
Late last month, YRC Worldwide reported adjusted 2013 EPS of ($5.09), versus the Street's ($11.17) estimate and our ($6.70) estimate, and in this note, we are updating our earnings model for the refinancing and recent results.
Click here or on the image to the right to read more.
The Federal Motor Carrier Safety Administration on Thursday unveiled its proposal to require interstate commercial truck and bus companies to use Electronic Logging Devices in their vehicles to improve compliance with the safety rules that govern the number of hours a driver can work.
FMCSA contends the proposal would significantly reduce the paperwork burden associated with hours-of-service recordkeeping -- the largest in the federal government following tax-related filings -- and improve the quality of logbook data.
The agency claims the proposed rule will reduce hours-of-service violations by making it harder for drivers to misrepresent their time on logbooks and avoid detection by the agency and law enforcement personnel. FMCSA says analysis shows the proposed regulation would help reduce crashes by fatigued drivers and prevent approximately 20 fatalities and 434 injuries each year for an annual safety benefit of $394.8 million.
The proposed rule also includes provisions to:
- Respect driver privacy by ensuring that ELD records continue to reside with the motor carriers and drivers. Electronic logs will continue to only be made available to FMCSA personnel or law enforcement during roadside inspections, compliance reviews and post-crash investigations.
- Protect drivers from harassment through an explicit prohibition on harassment by a motor carrier owner towards a driver using information from an ELD. It will also establish a procedure for filing a harassment complaint and creates a maximum civil penalty of up to $11,000 for a motor carrier that engages in harassment of a driver that leads to an hours-of-service violation or the driver operating a vehicle when they are so fatigued or ill it compromises safety. The proposal will also ensure that drivers continue to have access to their own records and require ELDs to include a mute function to protect against disruptions during sleeper berth periods.
- Increase efficiency for law enforcement personnel and inspectors who review driver logbooks by making it more difficult for a driver to cheat when submitting their records of duty status and ensuring the electronic logs can be displayed and reviewed electronically, or printed, with potential violations flagged.
In developing the updated proposal, FMCSA relied on input from its Motor Carrier Safety Advisory Committee, feedback from two public listening sessions and comments filed during an extended period following the 2011 proposed rule. The proposal also incorporates the mandates included in the most recent transportation bill, the Moving Ahead for Progress in the 21st Century Act, and other statutes.
Read more in-depth coverage from Washington Editor Oliver Patton in this updated story.
March 10, 2014: Last week the top execs of YRCW each got an $800,000 bonus, as a reward for the concessions approved by Teamster employees and the subsequent debt refinancing. A salaried (nonunion) employee of YRCW sent us an open letter to CEO James Welch regarding the top-heavy priorities of YRCW management, which is reprinted below. For obvious reasons, the letter is not signed.
Congratulations to you and Mr. Harry Wilson and Mr. Jamie Pierson on completing the refinancing deal. I'm glad it paid off for you.
You've said on several occasions that you deserve bonuses and stock because you make 25% less than Mr. Zollars did. Wouldn't that make some sense since the company is only 50% as big as it used to be? When he left, Mr. Zollars made $900,000 and you make $700,000 - you've clearly closed that gap and then some with all the stock grants and cash bonuses you've received. How can you be paid millions in incentives when we still lost over $30 million dollars last year? Does the Board pay out millions for sleight of hand financial juggling instead of real operating results?
It escaped a lot of people but I just read in the recent SEC 8k filing that you and Mr. Pierson and Ms. Friehl were this month given a huge bonus by the board to recognize your efforts with the restructuring? You and Mr. Pierson got $800,000 each in new stock 33,333 shares – and Ms. Friehl got a cool quarter million. I am confused though – isn’t it part of your job to do what is necessary for the employees and shareholders? Wouldn’t that include working to get a re-financing completed? I get paid my salary to do my job. It must be nice to be you.
Speaking of the Board – they not only awarded their partner Harry Wilson $3m in monthly fees, plus the $5.5 million he negotiated for himself, but I now hear that the Directors gave their friend another $3.5m on top of what he had negotiated – was that just a handsome parting gift? IF that is true, how can it be that you didn’t have to disclose that? Is this some secret payoff? In total Harry has now gotten $12m for 12 months work - $3m in monthly fees, $5.5m completion bonus and a $3.5m secret bonus. How nice to be Harry.
Did the Board even consider using that huge payout to re-instate the 401k match for non union employees? We haven’t had a retirement contribution in almost six years but that is apparently of no concern to the Board. You all must think Harry is more deserving than those who have stayed with this ship and kept it afloat for years even before you cam back to make your millions.
You lecture us and say we should leave if we don’t like it here. I would like it here a lot more if I could just have a little 401k match – you must like it a lot since you are making millions on the backs of your employees – union and non union alike.
- A longtime YRCW employee.
UPDATED March 6, 2014: Two recent SEC filings reveal that James Welch, CEO of YRCW, sold 93,750 shares of company stock and made $2,329,358. He first sold 38,000 shares, then within a few days sold another 55,750 shares. The filing also noted that Welch owns 329,157 shares at a current value of over $8 million.
Meanwhile, Harry Wilson, YRCW Board member appointed by James Hoffa for the IBT, has resigned from the Board after he got $5.5 million for his role in the Teamster concession vote and the re-financing deal. Hoffa will now be able to nominate a replacement to the YRCW board.
Wilson made millions more in fees of $250,000 per month and for earlier services.
Prior to the concession vote, Welch and other upper management reps were challenged by Teamsters to prove their equal sacrifice. Their answer was they were working for much less than their market value.
Increasing the national standard for twin trailers to 33 ft. from the existing 28 ft. would allow carriers to absorb up to 18% of future freight growth without any change in gross vehicle weight or additional miles traveled on roadways, the chief executive officer of FedEx Ground told a Congressional subcommittee Feb. 27. The House Transportation & Infrastructure Committee’s subcommittee on highways and transit is holding a series of hearings related to highway funding and safety as it works to reauthorize those programs. The current act, known as MAP-21, expires Sept. 30.
Testifying before a hearing on the nation’s freight network, Henry Maier, CEO of FedEx Ground, told the subcommittee that projected benefits of allowing 33-ft. twins are based on data supplied not only by FedEx, but also ABF System, Con-way, Estes Express, Old Dominion Freight Line, UPS and YRC Worldwide.
“Industry-wide, that equals up to 1.8 billion fewer miles driven, more than 300 million gals. of gasoline saved and $2.6 billion in reduced costs annually,” Maier said. “Importantly, a reduction in truck trips would be environmentally friendly, saving fuel and emissions from trucking. This is an excellent example of an innovation that can have tremendous value – including increasing cost efficiencies – but it is one that cannot be implemented without Congress modernizing our transportation policy.”
Some states allow the larger trailers, and FedEx has been testing them in Florida since 2010, Maier told the subcommittee. Not only have the larger trailers been just as safe, but also some drivers operating them believe safety is enhanced because the longer combination is even more stable than those with 28-ft. twins, he said.
Deterioration of highways and bridges “is fast reaching crisis proportions,” Maier said. “As a business whose customers rely on us for fast and reliable service, we can attest that impassable roads and bridges lead to increased costs, service delays and untold equipment damage.”
Maier noted that MAP-21 calls for the identification of a 27,000 mi. Primary Freight Network comprising highways viewed as essential to the delivery of goods. This measure is inadequate given that the Federal Highway Administration says that more than 41,000 mi. of highways would be needed.
“While FedEx agrees in principle with the Primary Freight Network concept, we have concerns based on its limited scope,” he said.
FedEx agrees with the American Trucking Assns. call for greater emphasis to be placed on critical freight corridors and intermodal highway connectors.
Highways’ importance for manufacturers
The told the subcommittee that the health of America’s freight network matters to the company not only because of its importance to Volvo customers and their need for equipment, but also because it directly affects the competitiveness of Volvo’s American manufacturing operations in the global economy.Group North America
“Like any other manufacturer, we rely on a vast supply chain and our nation’s interconnected network of roads, airports, inland waterways and ports to support and supply our operations,” said Susan Alt, senior vice president for public affairs for Volvo Group North America and former head of the company’s North American supply chain operations.
“Just in time” and lean manufacturing philosophies in recent years have benefited Volvo, its customers and the overall economy, Alt noted. “However, to be efficient we must have the right material, at the right time, at the right place, and in the exact amount needed in the production cycle.”
While the company can plan for some uncontrollable events that impact delivery times, it can’t plan for unexpected delays due to traffic congestion, Alt told the subcommittee. “This is where we get in real trouble - when a truck is caught in a traffic jam and can’t make his delivery. The ripple effect of one late delivery can be costly. It means we don’t build the product on time – tying up capital; it means the product will be re-worked – tying up man-hours and not following normal quality production; it means sending workers home early; it means not delivering to a customer on time and hurting our competitiveness…all because of that one missed shipment.”
While transportation infrastructure is serving the supply chain adequately today, it’s not well-positioned for the future, Alt said. “Highway infrastructure continues to age without a systematic program to modernize key interstate networks; traffic is returning to peak levels that we have not experienced since before 2008 and we are gradually experiencing economic growth with a strong emphasis on exports.”
MAP-21 represented an important step toward reforming transportation policy, but “a full six-year, well-funded reauthorization is needed to address the persistent challenges that are already well-documented and recognized as problems facing our transportation system,” Alt told the subcommittee.
A critical concern is traffic congestion, Alt said, sharing one example from Volvo’s experience at its southwest Virginia plant located along I-81. Until a third truck lane was added, a stretch of mountains near Blacksburg, Va., was the site of many accidents, resulting in frequent delivery delays and production disruptions for the plant, she said. “Since the opening of the third lane, we have a marked improvement in on-time deliveries from that route. This is a real world savings that directly benefits our customers, as well as the safety of the driving public.”
Other witnesses at the hearing were Wisconsin Department of Transportation Secretary Mark Gottlieb, testifying on behalf of the American Assn. of State Highway and Transportation Officials, and Palos Hill, Ill., Mayor Gerald Bennett, testifying on behalf of the Chicago Metropolitan Agency for Planning.
February 28, 2014: YRCW announced their 2013 annual and fourth quarter numbers and it’s clear that the regional carriers are pulling their weight. Operating profits were up to $22.7 million in 2013 for the regionals – Holland, New Penn, and Reddaway - while YRC Freight posted a 2013 loss of $15.4 million. YRC claimed losses due to weather, workers’ compensation claims, and weaker rates.
In late 2013, Jeff Rogers was removed as president of YRC Freight. He has been replaced by Darren Hawkins – formerly senior VP of sales and marketing at the company. CEO James Welch had held the post briefly prior to the change.
Upper management clearly needs a better plan to right the ship at YRC Freight. Teamster members have made countless sacrifices since 2009. James Welch needs to stop pointing fingers like he did in his February 14 letter to Teamsters. The focus needs to be on issues with YRC Freight management and operations – not the thousands of Teamsters who have done their part.
February 21, 2014: Over sixty Teamsters attended a February 15 meeting near St. Louis to hear Paul Taylor, lead attorney for the Truckers Justice Center, speak on truck safety issues. The crowd included UPS feeder and package drivers as well as UPS Freight road drivers, freight Teamsters, and carhaulers. Taylor discussed various issues involving trucking safety and the protections available to truck drivers.
Taylor recently won two major decisions against UPS on behalf of feeder drivers.
You can also learn more about your rights and protections here.
If you're interested in helping to organize a meeting in your area, contact TDU.