Dive Brief:
- Yellow Corp. will rely on pricing to offset costs of the International Brotherhood of Teamsters’ demand that it cease the use of over-the-road purchased transportation, CEO Darren Hawkins said during a Q1 earnings call.
- “With the current limitation in the union agreement ... we’ll certainly be leaning into pricing to protect our network,” Hawkins said. “And that’ll be the plan to protect service in Q2 as long as that limitation’s in place.”
- Negotiations between the carrier and the union have not resumed since breaking down in March, a Teamsters spokesperson told Transport Dive in an email Tuesday.
Dive Insight:
Even before the union’s demand, the Overland Park, Kansas-based LTL carrier was among a number of LTLs working to reduce purchased transportation costs. The company is navigating the Teamsters fight amid persistently muted freight demand.
Yellow’s YoY percentage comparisons and sequential gains in pricing have moderated, “just as we expected that they would, especially in a weaker freight environment,” CFO Dan Olivier said during the call.
Contract renewals are averaging price increases of 2% to 3%, compared to more than 10% a year ago, he said.
“Those contractual renewals reflect the execution of the overall pricing strategy to get paid appropriately for the work we perform,” he said, “as well as on a very selective basis, making strategic moves to either protect or to add profitable business to the network.”
The Teamsters pushed the carrier to reopen contract bargaining early to negotiate the proposed changes in the second phase of its One Yellow network overhaul. The union told Transport Dive it is open to discussing purchased transportation during those talks.
“When negotiation starts, all conditions are on the table,” the Teamsters spokesperson said.
