TFI International shares drop as CEO says trucking slump led to ‘disaster’ quarter
MONTREAL — The head of TFI International Inc. says its latest quarter was a “disaster” marked by low cargo volumes amid a trucking sector slump, with the first half of 2025 “foggy” at best.
“Q4 was a disaster for us,” said chairman and CEO Alain Bédard on Thursday.
“We are still in a very deep freight recession. The volumes are not there … There’s a fight for freight.”
The country’s largest trucking firm reported Wednesday that fourth-quarter profits dropped by a third year-over-year to $88.1 million due to intense competition and weaker demand from businesses.
On Thursday, shares slid more than 15 per cent to $153.58 in mid-morning trading on the Toronto Stock Exchange.
On a conference call with analysts, Bédard said high costs and inefficient operations at two big companies TFI acquired over the past four years have been a drag on earnings.
He called out subsidiary TForce Freight, which TFI bought from UPS for US$800 million in 2021. The Virginia-based carrier focuses on “less-than-truckload” deliveries — multiple drops of cargo for different clients on a single run.
“TForce is a big rock in my shoe,” Bédard said, citing a poor operating ratio, a key metric that refers to operating expenses as a percentage of revenue. “That’s the reason I’m up at night.”
Last April, TFI acquired Texas-based flatbed truck operator Daseke for US$1.1 billion. The company has some 400 excess trucks due to deals signed by the previous management, Bédard said. “This is killing us on depreciation expenses.”
Meanwhile, a higher number of accident claims and a weak Canadian dollar further dented income last quarter.
“We just throw money out the door,” he said of the claims, calling them “unacceptable.”
The chief executive also said the first half of the year will be “more difficult” than the first six months of 2024.
In a bid to boost American investment, Bédard said TFI will relocate its legal headquarters to the United States, already home to 70 per cent of its business.
He said there will be no change in the location of its head office or management teams.
“We’re not moving people from, say, Toronto to Chicago. Every member of the head office is staying where they’re at.”
TFI first listed on the New York Stock Exchange in 2020. But as a foreign company, it cannot take on more investment from American shareholders, who currently hold 49.9 per cent of its stock, Bédard said.
Its foreign status also “creates a little bit of issues” around its contracts with the U.S. Department of Defense, he added.
This report by The Canadian Press was first published Feb. 20, 2025.
Companies in this story: (TSX:TFII)
Christopher Reynolds, The Canadian Press