TFI to Put LTL, Truckload Units on Diets as Q2 Profit Falls

TFI International is implementing cost-cutting measures in its Less-Than-Truckload (LTL) and Truckload divisions as CEO Alain Bédard views the freight market as persistently weak. The company reported a Q2 net income of $117.8 million, down from $128.2 million the previous year, while revenue increased significantly due to acquisitions, most notably its $1 billion purchase of Daseke Inc. However, this revenue was tempered by decreased freight volumes and reduced fuel surcharge revenue, compounded by restructuring and increased interest costs. In the LTL division, revenue rose slightly, driven by improved revenue per shipment, yet Bédard expressed concerns about the light loads from TForce Freight, the company’s U.S. operations, which is currently operating at 35% excess capacity. In the Truckload segment, revenues surged primarily due to the Daseke acquisition, but there’s also an urgent focus on slashing costs, particularly in IT. Looking ahead, Bédard projected that the freight environment would not see significant improvement through 2024 and 2025, prompting a necessity for TFI to lean operations further. The comments reflect ongoing challenges in the freight industry, aligning with an expert view that during austere market conditions, companies must prioritize efficiency and adapt swiftly to shifting demand signals. Emphasis on advanced technologies and strategic acquisitions will be vital for companies in maintaining competitive edges in such a challenging landscape.