A first for Werner: Small group of workers votes to unionize
A tiny step toward unionization has come to one of the biggest truckload carriers in the country, albeit at a subsidiary that isn’t in the longhaul business of the parent company.
At three facilities in New Jersey operated by mostly one-way trucking carrier ECM, which is 80% owned by Werner (NASDAQ: WERN) after a 2021 acquisition, the United Food and Commercial Workers union won a representation vote earlier this week to represent 26 workers. The operations are in Cinnaminson, Hamilton and Piscataway.
Mike Thompson, who led the unionization drive for UFCW’s Local 152, said the vote was 17 in favor and eight opposed, with one member not voting.
The 26 workers at ECM compare to a workforce that at the end of last year Werner said in its 10-K report totaled 10,249 drivers, 693 mechanics and maintenance personnel for its trucking activities, 1,610 “office associates” for its trucking business, and 1,748 employees at Werner Logistics — its internal 3PL — and other nontrucking activities.
A visit from the CEO
But the union battle still was considered significant enough at Werner, according to Thompson, that Werner CEO Derek Leathers did visit the workers in New Jersey before the vote to make the company’s case against unionization. A spokeswoman for Werner confirmed the in-person visit.
Thompson, in an interview with FreightWaves, said the victory at Local 152 was the first in any unionization drive at ECM. There are other transportation professionals who are represented by the UFCW, he said, including drivers at food producer Sysco (NYSE: SYY).
UFCW’s website also shows it has unionized public transportation workers. But truck drivers aren’t a significant part of the mix at the UFCW. On the company’s website, a drop-down menu titled “Who We Represent” lists several industrial sectors; transportation isn’t on it.
“I think the biggest thing the Werner representatives said when they had meetings is that they didn’t know the [worker] conditions when they bought ECM,” Thompson said. “Two years ago, they didn’t realize there were issues and they basically just said they want another chance, standard company type of stuff.”
As far as why the workers would turn to a union when they had not been previously organized, Thompson said, “I think there was a feeling that there was a lack of respect. … Their benefits are not that affordable for what they are and they really don’t have much time off. And at the end of the day they just thought, let’s see if I can make an improvement.”
What comes next?
The Werner spokeswoman, in response to questions submitted by FreightWaves, said when Werner became aware of the unionization drive, “management engaged immediately.”
As far as whether the UFCW would use the vote as a springboard to other organizing actions, Thompson chose not to respond, while the Werner spokeswoman said it “would be presumptuous of Werner to speculate on the Union’s plans for moving forward.”
Werner has no other unions anywhere in the company, according to both the spokeswoman and a passage in the company’s 2023 10-K with the Securities and Exchange Commission.
ECM describes itself as a truckload and logistics provider. But at the time of the acquisition in 2021, its truckload activities were described as mostly “one-way,” and the company as a whole was referred to as a regional carrier.
At the time of the acquisition, ECM included regional truckload carriers ECM Transport and Cheswick, which together operated a fleet of approximately 450 trucks. A separate subsidiary, Motor Carrier Services of Pennsylvania, operates a fleet of approximately 50 trucks.
Revenues generated by ECM are reported in One-Way Truckload within the company’s Transportation Truckload Services segment. Prior to the acquisition, ECM achieved revenues of $108 million in 2020. For the first six months of 2023, One-Way Truckload inside the TTS segment had revenue of approximately $360 million, down from about $375 million for the first half of 2022.
In the second quarter, the average length of a trip in TTS was 604 miles, Werner said in its earnings report.
In Werner’s call with analysts to discuss earnings for the second quarter of 2021, soon after the ECM acquisition was announced, Leathers addressed the question of staff satisfaction at ECM, during a time when trucking markets — and turnover — were soaring.
“Something I am probably most happy with thus far as it relates to the ECM acquisition is that the due diligence and the work and frankly, the very cautious nature of Werner in terms of getting something across the finish line and then deciding that this was the right one has been proven true thus far,” Leathers said on the call. “The driver morale, the driver retention has been very strong. Same on the customer front. In fact, I would say, at the moment we feel like we have some momentum with ECM and conversations we are having are about growth, not retention or not attrition at all.”
Discussions and efforts regarding unionization began in June, Thompson said, adding that a successful union vote that quick was unusual.
“We look forward to bargaining a first contract that recognizes their hard work and the role they have played in their company’s success,” Local 152 President Brian String said in a prepared statement.
Winning a union vote and getting a contract are two different steps. There may be parallels with the workers’ vote at the Hialeah, Florida, facility of XPO (NYSE: XPO) to be represented by the Teamsters, which was followed by a July 2021 signing of the first-ever contract between XPO and a union. But in June, the workers voted to decertify the union, even though a contract was in place.
“That’s really where the rubber meets the road,” Thompson said of the contract negotiations. “You win your election and it doesn’t make you a union member. You don’t pay dues until you get a contract.”
Thompson added that the UFCW will send out possible dates for negotiation. And he added that Werner officials had said prior to the vote that they “would bargain in good faith.”
As for Werner, the spokeswoman supplied the company’s view of what happened and what is to come.
“Company leadership works hard to foster various lines of communication with its professional drivers by constantly seeking and evaluating their feedback,” the company said in the statement supplied to FreightWaves. “Werner’s professional drivers have not felt the need to unionize because of these sound and effective practices. The company will continue reinforcing and implementing Werner’s strong culture throughout the enterprise.”
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