TFI International continues to struggle to improve the performance of its TForce Freight less-than-truckload group, Chairman, President, and CEO Alain Bédard told analysts February 20 while reiterating that he still wants to make a sizable acquisition to improve the division’s U.S. network density.
Speaking to analysts after Montreal-based TFI (No. 6 on the 2025 FleetOwner 500: For-Hire) reported poor fourth-quarter results, Bédard said he’s “not happy at all” with the state of TForce, which TFI bought in 2021 when it was UPS Freight, and lined up the challenges. It still struggles with poor service levels relative to its peers—and is perceived as such, hurting its pricing power—and is churning too many of its customers, particularly more profitable small and medium-sized businesses.
Perhaps the most important to Bédard, though—and the reason he still wants to add bulk either this year or next despite calling the division “a big rock in my shoe”—is the low density in TForce’s network, which raises its operating ratio. The division’s roughly 20,000 shipments per day, the CEO said, are too low to be an effective national player.
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“We’ve been trying, working with the sales team to understand, ‘Guys, we need more freight close to our terminal. We need more freight per pickup,’” Bédard said. “By doing that, you’re way more efficient.”
TForce isn’t Bédard’s only headache these days, however: In the last three months of 2024, TFI produced a net profit of $88.1 million, which was a drop of more than 30% from the prior-year period, even though total revenues before fuel surcharge rose about 9% to $1.8 billion thanks to the acquisition last year of specialty transport venture Daseke for more than $1 billion.
In addition to weaker LTL results and a drop in logistics revenue, the bottom-line drop also was the result of a drop in rates and miles driven at Daseke as well as that division’s excess equipment, which it had committed to buy before being acquired. In all, TFI’s adjusted operating ratio climbed to 91.2% in the fourth quarter from less than 88% in late 2023. That lifted its full-year ratio to 89.9% from 88.4% in 2023.
Bédard told analysts the first quarter has yet to bring any improvement in TFI’s metrics, in part because the Trump administration’s trade and tax actions are making things “very foggy” and leading some customers to take a cautious stance. That outlook was one reason Bank of America analyst Ken Hoexter downgraded TFI to ‘underperform’ from ‘neutral’ after the earnings report, telling clients his new price target is $109, down from well above $130.
Between the earnings report, conference call, and Hoexter’s note, TFI shares (Ticker: TFII) took a beating February 20, falling more than 20% to $101.48. They have now lost more than 30% over the past six months, a move that has cut TFI’s market capitalization to about $8.6 billion.
TFI’s rough ride might last beyond the spring: Bédard said—as he has before—that he doesn’t see the freight recession ending soon, an assessment that’s more negative than most of his peers.
“The market is not going to help us again in ’25. I mean we still think that we’re going to be in a freight recession. We don’t see anything changing over the course of ’25.”
