July 15, 2011: On July 6, ABF won a round in their court battle to win concessions equal to those given to YRC, but they are still not expected to prevail in the lawsuit.

The 8th Circuit Court of Appeals ruled that the district court judge erred in tossing out ABF’s suit for lack of standing, and must consider the merit. So ABF gets to go back to the district court for a do-over, but that does not address the merits of their case.

ABF now has to show that the Teamsters Union had no right to give YRC concessions without granting them to ABF. That may prove to be impossible. ABF withdrew from the employers’ joint bargaining group prior to the last contract.

ABF Teamsters rejected concessions negotiated by the Hoffa administration in May of 2010.

July 13, 2011: On July 6, 2011, the U.S. Court of Appeals for the 8th Circuit in St. Louis, MO issued its decision on the appeal filed by ABF in its lawsuit against the union and the YRCW companies, regarding the financial relief that was given to the YRCW companies to help them survive the worst economic recession since the Great Depression. As you may recall, the U.S. District Court in Little Rock, AR in December 2010 dismissed ABF’s suit on a technical basis stating that ABF did not have standing or the legal right to bring its lawsuit.

Click here to read more.

July 12, 2011: YRC Worldwide is one step away from completing its financial restructuring by a July 22 deadline, a key official at the $4.4 billion trucking company said Monday.

The company secured a $400 million asset-based loan facility from its lenders, and now must raise $100 million through the sale of convertible securities to its lenders.

Click here to read more at The Journal of Commerce.

July 11, 2011: A series of union concessions between YRC Worldwide Inc. and the International Brotherhood of Teamsters is in jeopardy again after a federal appeals court restored a legal challenge by rival trucker ABF Freight Systems Inc.

In a ruling released July 6, the 8th U.S. Circuit Court of Appeals in St. Louis overturned a lower court's decision that ABF lacked standing to challenge the agreement.

Click here to read more.

July 7, 2011: The United States and Mexico Wednesday signed a cross-border trucking agreement under which the U.S. will open its roads to Mexican trucks, while Mexico will suspend about $2 billion in tariffs on U.S. goods.

Under the agreement, signed by U.S. Trade Representative Ron Kirk and his Mexican counterpart in Mexico City, Mexico will suspend 50% of its tariffs within ten days, according to a statement by the U.S. Department of Transportation.

Click here to read more at Transport Topics.

July 7, 2011: A series of union concessions between YRC Worldwide Inc. and the International Brotherhood of Teamsters is in jeopardy again after a federal appeals court restored a legal challenge by rival trucker ABF Freight System Inc.

In a ruling released Wednesday, the 8th U.S. Circuit Court of Appeals in St. Louis overturned a lower court’s decision that ABF lacked standing to challenge the agreements.

Click here to read more at the Kansas City Business Journal.

June 15, 2011: Proposed hours of service (HOS) regulations currently being promulgated by the Federal Motor Carrier Safety Administration (FMCSA) to improve driver safety are unnecessary and could prove costly to small trucking businesses, lawmakers and witnesses told a House panel June 14.

During a hearing of the House Small Business Committee's Subcommittee on Investigations, Oversight, and Regulations, witnesses unanimously opposed the proposed rule that among other things, limits the time drivers spend behind the wheel to either 10 or 11 hours. Currently, drivers are limited to 11 hours behind the wheel.

Leading the attack on the proposed rule, Subcommittee Chairman Mike Coffman (R-Colo.) said that there has been a significant decline in large truck crashes since new HOS rules were implemented in 2003.

Since then, Coffman said, there has been a reduction in fatal truck-related crashes by more than 33 percent and a decline of crashes resulting in injury by 40 percent.

“Despite these major improvements in driver safety, the FMCSA has now proposed complicated and cumbersome travel requirements for drivers meant to increase truck safety by reducing the daily maximum driving limit, decreasing the maximum on-duty time limit, and requiring mandatory breaks,” Coffman said. “The decreased instances of crashes involving commercial trucks over recent years begs the question: ‘Is this new rule really necessary?'”.

Coffman said the new regulations could cost the small trucking industry $2.5 billion annually in lost revenue.

“The failure of the agency to take into account the significant improvements in driver safety over the last seven years has the potential to not only cost small businesses billions, but also lead to an increase of new and inexperienced drivers on the road to fill the employment holes created by the proposed rule,” he said.

Legal Challenge to Earlier Rule

The proposed rule, issued in December 2010 (247 DLR A-9, 12/27/10) following a legal challenge to a version proposed two years earlier, would, among other things, limit repeated use of a 34-hour “restart period” for calculating when drivers may begin driving again after a shift.

The rule would change the current regulation, which was promulgated in 2003 and took effect in 2004.

The Bush administration proposed revisions to the rule in 2008 that would have increased the number of hours truckers could drive in a workday, and that was challenged in federal court by a coalition made up of the International Brotherhood of Teamsters and several safety advocacy groups.

The U.S. Court of Appeals for the District of Columbia Circuit agreed to hold the rule in abeyance pending the release of a new proposed rule, when the plaintiffs and the agency reached a settlement agreement in October 2009 (206 DLR A-13, 10/28/09).

In releasing the revised rule in December, FMCSA said the new proposal would improve driver safety and health, lessen fatigue, and improve highway safety, among other benefits.

Rule Details

The proposed rule would limit the time drivers spend behind the wheel to either 10 or 11 hours, and would continue to require drivers to remain off duty for a minimum of 10 consecutive hours between shifts.

Under the rule currently in effect, drivers are limited to 11 hours behind the wheel, and FMCSA said it was considering again lowering the limit to 10 hours. Drivers were limited to 10 hours of driving time prior to 2003.

In addition, the proposed rule would maintain the current “driving window” of 14 consecutive hours after coming on duty following a break of at least 10 hours. A driver, however, would be permitted to be on duty for only 13 hours of that time as opposed to the current 14 hours. The on-duty time not spent driving includes such activities as waiting for cargo, having cargo unloaded, meals, and rest breaks.

Twice a week, to provide additional rest for drivers or to “respond to unanticipated conditions,” drivers would be allowed to extend the driving window to 16 hours, according to the proposed rule, but they would be required to take three hours of breaks.

The proposed rule also would leave unchanged the current rule's weekly limits for drivers of 60 hours on duty in a seven-day period, or 70 hours in eight days. The 34-hour restart allowed under the current rule, which permits drivers to restart the 60- or 70-hour “clock” by taking a break of at least 34 consecutive hours off duty, also would be retained, although it would require the restart period to include two periods between midnight and 6 a.m., and would prohibit drivers from taking another restart break prior to seven days after the last one.

‘Negative Impacts.'

Paul James, president of Denver-based Rex Oil Co., testifying on behalf of the Petroleum Marketers Association of America, said that his group opposes any reduction in the maximum daily drive time.

“A one-hour reduction as proposed would have negative impacts on drivers and small business petroleum transporters,” James said.

First, he said the reduction would hurt drivers who are largely paid at an hourly rate, and who thus would face reductions in their paychecks.

Second, he said the reduction in maximum daily driving hours would drive costs up for small business petroleum transporters. With fewer hours to drive each day, many companies, James said, would be forced to hire additional drivers or delay deliveries to the following day.

James said his group believes the proposed changes should not apply to short haul drivers.

“Fatigue is a less significant factor among short haul drivers as opposed to long haul drivers with sleeper berths that travel long distances for days on end along the nation's interstate highways,” James said.

Teamsters, Safety Advocates, Support Rule

While no witnesses were present at the hearing to defend the proposed changes, the International Brotherhood of Teamsters and highway safety advocates, such as the Advocates for Highway and Auto Safety, Public Citizen, and the Truck Safety Coalition, have jointly said they agreed with many parts of the proposed rule, but that their support was “contingent on the restoration of the 10-hour limit on the number of consecutive hours of driving permitted in each work shift,” which, the groups pointed out, was “the same limit that had been in place for 65 years from 1938 until 2004.”

In comments to the FMCSA in March, IBT and the safety groups said the proposed ban on using the 34-hour restart period more than once every seven days or 168 hours “would prevent long haul, truck load and other drivers on intensive and irregular schedules—from taking only the minimum 34-hour off duty restart on a regular basis” (54 DLR B-1, 3/21/11).

‘Negative Impact' on Small Businesses

Continuing the attack on the proposed rule, James Burg, president of Michigan-based James Burg Trucking Company, testifying on behalf of the American Trucking Associations, said the proposed changes would have a “profoundly negative impact” on small businesses, would restrict productivity, and would result in greater congestion and increased emissions.

“These proposed changes come at a time when the pool of qualified drivers has shrunk, the cost of purchasing equipment and maintaining new equipment has risen, and general operating costs have been climbing,” said Burg.

If the rule is finalized, Burg said he would need to add additional trucks and drivers simply to counter the loss in productivity.

“By my estimates, we would need to increase our retained earnings by between 20 percent and 25 percent just to maintain our current level of financial stability,” he said.

Rusty Rader, of Pennsylvania-based J.J. Kennedy, Inc., testifying on behalf of the National Ready Mixed Concrete Association, said while the current HOS regulations are not perfect, the rules are “manageable and much more flexible for operations.”

“The less time ready mixed producers spend with ‘bureaucratic overhead,' the more time they can spend pouring concrete, employing more people and building America's economy,” Rader said.

By Derrick Cain for BNA Daily Labor Report

May 10, 2011: Forty-two House members joined Reps. Duncan Hunter (R-Calif.) and Daniel Lipinski (D-Ill.) in a May 4 letter to Transportation Secretary Ray LaHood blasting a proposed North American Free Trade Agreement cross-border trucking program with Mexico.

However, Emergency Committee for American Trade President Calman Cohen May 6 told DOT in a comment letter that instituting the pilot program would show a commitment to improving U.S.-Mexico trade ties as well as advance the president's National Export Initiative goal of doubling U.S. exports by 2015.

Since 2009, Mexico has slapped tariffs on U.S. products totaling more than $2.4 billion in value because of U.S. noncompliance with the NAFTA trucking provisions. The cross-border trucking program would implement NAFTA trucking provisions that have been stalled since 1995 because of safety concerns about Mexican trucks on U.S. roads.

“It is important that the United States fully implement the proposed pilot program to achieve the quick removal of these tariffs to restore U.S. companies' exporting opportunities and end the dispute that has encumbered for too long the important U.S.-Mexico trading partnership,” Cohen said.

If the United States remains out of compliance with its NAFTA commitments, U.S. exports are at a disadvantage and the nation's ability to reach the NEI goal is hampered, Cohen said.

Mexico has committed to suspending 50 percent of its retaliatory tariffs if and when DOT formally signs on to the proposed program. The remaining tariffs would end when the first Mexican carrier receives authorization to operate in the United States.

The ECAT letter noted that the three-year program includes checks to ensure carrier safety and verify driver certifications, including requirements that carriers undergo safety data and compliance reviews, as steps toward receiving permanent operating authority.

Lawmakers Oppose Program

The lawmakers' letter underscored members' concerns with the safety, security and costs of the program. Hunter circulated a draft of the letter last month (75 DLR A-11, 4/19/11).

“The cross-border trucking program clearly puts foreign interests above our own,” Hunter said in a statement. He added that the program was bad for the U.S. economy, the trucking industry, U.S. truckers, and border security.

Under the DOT proposal, participating Mexican carriers and drivers would be required to comply with all applicable U.S. laws and regulations, including those concerned with motor carrier safety, customs, immigration, vehicle registration and taxation, and fuel taxation, the Transportation Department's Federal Motor Carrier Safety Administration said in an April 13 Federal Register notice soliciting comments (69 DLR A-8, 4/11/11).

Lipinski said, “Past inspection failures and gaps in security at the border show that opening our roads to Mexican truck traffic could result in the entry of unsafe vehicles and drivers that pose a threat to the safety of the public.” He added that the agreement gives drug traffickers another “potential avenue to exploit at a time when crime and violence in Mexico are on the rise.”

NFTC Backs Program

On the other side of the issue, National Foreign Trade Council President Bill Reinsch May 3 wrote to DOT in strong support of the border opening as envisioned by the proposed pilot program.

“The pilot program represents a critical step toward meeting the long-standing U.S. commitment to allow cross-border delivery of international cargo by Mexican-domiciled carriers from Mexico into the United States, access that is already provided to Canadian carriers,” Reinsch wrote, noting that the United States is bound by NAFTA provisions barring the United States from favoring Canadian or domestic carriers over Mexican carriers.

Not only does U.S. noncompliance with NAFTA lower U.S. credibility with its largest trading partners, it also may negatively impact future and ongoing negotiations, the letter warned. “U.S. compliance with the agreement will help to restore trust in America's international commitments,” Reinsch wrote.

While welcoming the pilot program, Reinsch said it was critical that it lead quickly to a permanent solution to fully comply with U.S. NAFTA cross-border services commitments.

By Rossella Brevetti for BNA Daily Labor Report.

Text of the letter may be accessed here.

May 4, 2011: The Western Conference of Teamsters Pension Fund has made it official: YRC Teamsters are no longer participants in a pension plan.

Instead, they will get approximately $1.75 per hour put into a 401(k) plan, effective June 1.

On May 2, the Union Chair of the Fund, Chuck Mack, informed all Western locals that "YRC will not re-enter the Plan at a lower contribution rate. They will instead make any pension contributions to the International Union’s 401k."

It's a major blow to many YRC Teamsters, a and sad day for all Teamsters who care about our union’s strength in freight and our ability to organize in trucking.

It's also a strong signal that a change of leadership is a must to get our union back on track in freight and trucking, and rebuild Teamster Power. The Hoffa administration has had 13 years, and the result has been backpedaling, excuses and blaming someone else.

YRC Teamsters in the Western Fund will retain what credits they earned in the past, but not accrue any new years or credits toward retirement. It is an especially bad blow to those with fewer than 25 credited years in the fund; they will not become eligible for any early retirement ("golden 80"), unless they get back into the fund at a different Teamster employer.

There are other Teamster pension funds in the east who have not been heard from regarding what will happen with YRC Teamsters, even though June 1 is just weeks away. That is the date that YRC must resume paying pension contributions.

May 3, 2011: YRC Worldwide (YRCW), the financially ailing second-largest less-than-truckload (LTL) company which has lost in excess of $2.7 billion the last four years, says it has reached another “milestone” in its long-awaited restructuring plan now scheduled for completion in July.

Under terms of its latest debt swap plan, supported by more than 95 percent of its senior secured lenders, shareholders will hold less than 2.5 percent of YRCW stock, which has been battered throughout the worst recession to hit trucking companies in more than 70 years.

Click here to read more at Logistics Management.