XPO said it had reached an agreement with its drivers to increase pay by 8% after the Unite union threatened strike action.
The logistics firm said it would also raise the hourly rate for warehouse workers by 13% over the next 15 months.
Unite claimed the pay increases for HGV drivers, warehouse staff and cross-dock operatives were secured after its members voted for industrial action because their rates of pay were below those of XPO’s competitors.
Matt Draper, Unite national officer for transport, said: “From the outset, Unite had made it clear that it believed this dispute should be resolved via negotiations.
“Once XPO understood the strength of feeling of its workforce a new offer was tabled and agreed by members.”
An XPO spokeswoman said: “Over the last 18 months, we have consistently reviewed the developing driver availability and pay environment.
“As a result, working with our employees, we amended our compensation in 2021 and agreed to increase the hourly rate by 8% for our drivers and 13% for our warehouse colleagues in the next 15 months.
“By ensuring that our pay and benefits remain competitive, we have remained an employer of choice and have increased our employed driver and warehouse population to above pre-pandemic levels,” the spokeswoman added.