Very few trucking executives have been willing to make market predictions in 2024 after their cautious forecasts of a year ago turned out to be over-optimistic. But TFI International Inc.’s Alain Bédard—not one to shy away from concise and forceful statements—bucked that trend April 26, albeit with zero optimism.
“This freight kind of recession will not change probably before ’25,” Bédard, TFI’s chairman, president, and CEO, told analysts after Montreal-based TFI reported its first-quarter results. “We have an election year in the U.S. I mean, a lot of our customers are just waiting to see what’s going to happen.”
Bédard and his team said TFI, which ranks seventh on the 2024 FleetOwner list of top for-hire carriers, produced net income of $201 million on total revenue of $1.87 billion in the first three months of this year. Those numbers were down from $232 million and up from $1.85 billion, respectively, in early 2023. Big drops in operating profits at the company’s truckload and package/courier units were the main contributors to the bottom-line deterioration; less-than-truckload operating income rose to nearly $67 million from $58 million a year earlier even though revenue slipped slightly to $681 million.
Those numbers and the advantage of reporting after several big U.S. truckload industry names’ “scary” results led TFI’s leaders to lower their forecast for TFI’s 2024 profits by about 3%.
“We thought that ’23 was a bad year but when I looked at the start of ’24 with my peers’ results, I’m saying maybe ’24 is going to be worse,” Bédard said. “Who knows? I mean, one quarter is not a year but […] this is why we have to underpromise and overdeliver.”
See also: TFI buying cross-border specialist Hercules Forwarding
Looking into 2025 and beyond, Bédard was more optimistic about the U.S. economy based on conversations with TFI clients. Until then, though, it sounds like election-year considerations are playing a role in what customers are telling TFI will be a “steady-eddy year,” he added.
That last sentiment was echoed by Saia Inc. (No. 19 on the FleetOwner 500) CFO Doug Col, who recently also told analysts that many of the LTL carrier’s customers have grown more sophisticated with their freight spending by consolidating shipments and going to the truckload market—where price competition has been brutal—more often than before.
“The industrial complex has just been weaker,” Col said on Saia’s earnings conference call. “Who knows, in an election year, maybe you get a different regulatory environment around energy or something like that, for example, over the next couple of years. […] We all benefit when the industrial supply chain is full and moving and energy has been missing.”
Also missing from TFI’s operations, Bédard said, are hundreds of pounds per LTL shipment. The company continues to work on finetuning its acquisitions of TForce Freight and UPS Freight and Bédard said he’s pushing for its average weight per shipment to climb to 1,500 lb. from about 1,200 today. That and a denser network—TFI is shrinking parts of its footprint to shed excess capacity, including by relocating some work into a handful of smaller facilities it acquired from the shuttered Yellow Corp.—will improve profitability, he added.
A relative bright spot for TFI are the recently acquired Daseke Inc. flatbed and specialty businesses, Bédard said. While those units are down slightly from their 2023 performance, Bédard said they’re on track to meet their plans.
