Veltex Corporation (VLXC)

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Trucker Roadway - labor talks may drag on cargoes
Wednesday February 5, 10:49 am ET
By Michael Connor


MIAMI, Feb 5 (Reuters) - Roadway Corp (NasdaqNM:ROAD - News) on Wednesday said it and other leading U.S. shared-loads truckers may soon begin losing cargoes to non-union rivals as bargaining resumes on a new Teamsters contract for 65,000 workers.
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"Going by history, I would expect that there will be freight diversion to some degree that will begin to start fairly shortly -- not of a significant nature," Roadway Chief Financial Officer Dawson Cunningham said.

Cunningham, in answering questions at a Goldman Sachs conference, said wholesalers, manufacturers and other shippers were likely to switch loads even more frequently during weeks before the March 31 expiration of a current pact.

"It would begin to pick up in the latter part of this month, certainly into March and then take one final bump in early April, even if the contract is settled, simply because some people will have committed to that," he said.

The Teamsters and an industry group representing unionized workers at Roadway, Yellow Corp (NasdaqNM:YELL - News), Arkansas Best (NasdaqNM:ABFS - News) and a unit of US Freightways (NasdaqNM:USFC - News) were scheduled to resume bargaining on Wednesday in Chicago after a two-week break.

Agreements on many secondary issues such as seniority rights were reported by both sides during bargaining that began in October but talks broke off in late January over wages and health care costs.

Both sides are eager for a deal ahead of March 31 in order to avoid a repeat of the last round of talks. Down-to-the-wire bargaining in 1997 cost unionized truckers lost cargoes and an estimated 5,000 jobs as shippers worried about a walkout shifted loads to nonunion carriers.

Cunningham expressed optimism about settling on a new contract at the New York conference and said any shifts to non-union truckers may be limited by the tightened capacity among all shared-loads, or less-than-truckload, carriers since the September closure of Consolidated Freightways (Other OTC:CFWEQ.PK - News).

The passing of Consolidated, with some 15,000 Teamsters workers and 15 percent of the LTL capacity, has lifted shipments at rivals and yielded a late 2002 surge in profits among many LTL truckers after two tough years.


http://biz.yahoo.com/rc/030205/transport_roadway_1.html