TFI Q4 Profit Slumps 33% on Higher Costs, Tonnage Decrease
“It’s going to be a very difficult 2025,” Bédard said. (TForce Freight)
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Profit at TFI International fell in the fourth quarter of 2024 even as revenue rose on the back of the acquisition of flatbed carrier Daseke.
Increased costs, a decrease in less-than-truckload tonnage and idle specialty truckload rolling stock hurt TFI earnings in the most recent quarter as the North American freight market remained in a rut, said CEO Alain Bédard, warning analysts the outlook was no better for 2025.
TFI posted Q4 net income of $88.1 million, a 33% slump compared with $131.4 million in Q4 2023, while revenue rose to $2.08 billion from $1.97 billion.
Montreal-based TFI saw its truckload unit revenue jump 64% to $693.2 million from $399.3 million in the year-ago period, but revenue at the LTL and Logistics divisions fell by 13% and 14%, respectively.
Daseke, the No. 1-ranked flatbed carrier in North America, boosted revenue at TFI’s specialized truckload unit to $531.9 million from $283.4 million in the same period a year earlier.
However, the specialized truckload unit’s operating ratio was 91.6 in Q4, compared with 87 in the year-ago period.
Operating ratio provides insight into how well a company is balancing its costs and revenue generation. The lower the ratio, the better a company’s performance.
The unit operated 6,888 trucks on average in the most recent quarter, compared with 4,051 a year earlier.
A lot of the specialized truckload unit’s equipment is not being used very often, Bédard said during a Feb. 20 conference call with analysts, particularly as wind turbine installation sags.
The truckload market is still weak, and rates remained under pressure in the first quarter of 2025, he said, adding that the cost side of the equation was also hurting margins, particularly if measured in revenue per mile.
“We still have a lot of work to do on cost [at Daseke],” he said. “We still have a lot of work to do to become lean and mean.”
Daseke ordered a lot of trucks ahead of its acquisition by TFI, which had to honor those purchases. The company has a lot of equipment lying around, said the company’s top executive, adding that TFI plans to start unloading the excess trucks in the first quarter.
By the end of 2025, TFI expects the operating ratio of the specialty truckload division to be below 90, he said.
TFI ranks No. 4 on the Transport Topics Top 100 list of the largest for-hire carriers in North America and No. 8 among both truckload and LTL players.
The company reported a 9.8% year-over-year decrease in LTL revenue to $737.3 million in the most recent quarter from $817.3 million.
TFI’s U.S. LTL operations shipped 811,000 tons of freight in Q4, compared with 835,000 tons a year earlier, while its Canadian LTL operations shipped 609,000 tons, down from 639,000 tons in the year-ago period.
However, the U.S. LTL operations — the backbone of which is the TForce Freight unit bought from UPS in 2021 — continue to perform nowhere near Bédard’s expectations.
The U.S. LTL unit’s operating ratio in Q4 was 97.3, compared with 91 a year earlier. TFI’s Canadian LTL operations posted an operating ratio of 81, compared with 79.9 in the year-ago period.
“TForce is a big rock in my shoe, no doubt about it,” Bédard told analysts.
TFI has been cutting its U.S. LTL costs, but volume has been falling at the same time, he said, noting: “It’s like a dog chasing its tail.”
“We’re losing small and medium customers, and they have the best margins … we have to be way more aggressive on sales to small and medium-sized customers,” he said.
The company is trying to increase its sales, while at the same time raising pickup density.
“Density is the name of the game,” he said, adding that TFI was pushing for less miles and picking up more at each stop at the U.S. LTL operations. “Our density is [expletive],” he said.
“If you can’t get the density organically from your sales team, you have to do more M&A to improve your density,” he noted.
Looking forward, Bédard is not optimistic about the freight environment in 2025.
TFI has yet to issue any guidance for the current year. “It’s still very foggy. We are still in a deep recession. It’s going to be a very difficult 2025,” he said.
Truckload and LTL volumes so far in 2025 have been weaker than the company expected in October, when executives formulated plans for 2025, he said.
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American Trucking Associations projected Jan. 16 that after two years of declines, U.S. freight volumes are set to grow 1.6% in 2025.
As the market and Bédard await a turnaround, TFI intends to re-domicile to the U.S. Around 70% of TFI’s operations are based in the United States. It began operating in the U.S. in 2011.
TFI will not delist from the Toronto Stock Exchange, in what Bédard termed an evolution of the company.
The company’s headquarters will not change either, he said. TFI’s head office team is spread out between Montreal, Toronto, Chicago and Minneapolis. “We’re not moving the head office. Every member of the TFI head office is staying where they are,” he said.