Dive Brief:
- The International Brotherhood of Teamsters ordered Yellow Corp. to halt the use of purchased transportation within 30 days, citing sections of its collective agreement and saying PT is no longer permitted, in a March 24 letter obtained by Transport Dive.
- “Please confirm in writing that all Yellow operating companies will comply with their contractual obligations and cease the use of PT no later than 30 days from this notice,” Teamsters National Freight Director John Murphy wrote in the letter to Bryan Reifsnyder, Yellow senior VP of trucker relations. The letter was first reported by FreightWaves.
- While Yellow has reduced its purchased transportation due to slack demand in recent months, the practice is a necessity for the carrier and many other trucking companies, allowing them “to move additional loads to better serve our customers,” spokesperson Heather Nauert said in an emailed statement.
Dive Insight:
LTL companies rely — sometimes more than they’d like — on purchased transportation, which allows them to add extra capacity to their linehaul networks, for a price.
Executives at Yellow and its competitors often mention efforts to lower their purchased transportation spending when talking with investors and analysts.
“If it’s not operating and adding to the profitability of this company, we’re better off pulling back on purchased transportation and other areas and focusing on the business that operates well for Yellow,” Yellow CEO Darren Hawkins said during last quarter’s earnings call.
The Teamsters’ demand that Yellow eliminate the practice altogether is an escalation of tactics following the union’s rejection of Yellow’s resubmitted change of operations proposal for the One Yellow network overhaul.
The One Yellow network reorganization proposes to integrate the company’s linehaul network and its pickup and delivery options to reduce redundancies, and doing so in the west has already begun paying off, President and COO Darrel Harris said last summer.
The company believes the changes “would further modernize Yellow and better enable us to compete in a marketplace that is populated by non-union carriers,” Nauert said.
“We have been working in good faith with the IBT to come to an agreement,” Nauert said. “We are disappointed that IBT leadership is unwilling to engage in mutual conversation about the future of our 22,000 union employees. We believe that respectful, constructive dialogue is always important.”
