TFI International shares drop as CEO says trucking slump led to ‘disaster’ quarter

Commercial trucks and passenger vehicles drive across Ambassador Bridge on the Canada-U.S. border in Windsor, Ontario, Canada, on Thursday, Aug. 9, 2018. (Cole Burston/Bloomberg)

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, so it’s going to be a difficult ’25 ... There’s a fight for freight.”

Shares in the company dropped almost 21 per cent to close at C$143.78 Thursday on the Toronto Stock Exchange after it reported results that fell short of expectations.

The country’s largest trucking firm, which keeps its books in U.S. dollars, reported Wednesday that its fourth-quarter profit dropped by a third year-over-year to US$88.1 million from US$131.4 million due to intense competition and weaker demand.

On an adjusted basis, TFI earnings in the three months ended Dec. 31 amounted to US$1.19 per share, down from US$1.71 per share a year earlier. The average analyst estimate had been for a profit of US$1.60, according to LSEG Data & Analytics.

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, which refers to operating expenses as a percentage of revenue. Last quarter the metric, which is better when lower, topped 97 per cent.

In April, TFI acquired Texas-based flatbed truck operator Daseke for US$1.1 billion. Its costs effectively matched its revenue. And the company has some 400 excess trucks due to deals signed by the previous management, Bédard said.

Meanwhile, a higher number of accident claims in the U.S. and a weak Canadian dollar further dented income last quarter.

“We just throw money out the door,” he said of the claims, which drained an “unacceptable” US$8 million from TFI coffers.

The chief executive also said the first half of the year will be “more difficult” than the first six months of 2024, though he held back on offering a financial forecast for 2025.

“It’s very foggy,” he said three times during the call.

The cloudiness stems from uncertainty over whether the Trump administration will follow through on sweeping tariff threats against Canada and Mexico, with retaliatory duties pledged in kind by those two countries.

In Canada’s largest province, the tariff threat prompted an 18 per cent spike in truck shipment cancellations to the U.S. from Canada and a 14 per cent increase in cancellations in the other direction, according to a recent survey of Ontario Trucking Association members.

However, less than five per cent of TFI’s business comes from transborder shipments, Bédard said. The vast majority of sales flow from domestic trips within the U.S. and Canada.

In a bid to boost U.S. investment, he said TFI will relocate its legal headquarters to the United States, already home to 70 per cent of its business.

Quebec pension manager rebukes trucking firm TFI for planning move to U.S.

There will be no change in the location of its head office or management teams, he said.

“We’re not moving people from, say, Toronto to Chicago. Every member of the head office is staying where they’re at.”

Bédard gave no hint that TFI’s upcoming change in address relates to the potential tariff battle with Canada’s largest trading partner. Rather, it’s about shares, he said.

TFI first listed on the New York Stock Exchange in 2020. But as a foreign company it cannot take on more investment from U.S. shareholders, who as of last summer held 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 noted.

Christopher Reynolds, The Canadian Press

This report by The Canadian Press was first published Feb. 20, 2025.