US and Canadian trucking giant TFI International’s CEO Alain Bédard was blunt and direct as ever about the poor performance of the company in 2024, but defended overall performance by saying there is a ‘very severe’ freight recession with no apparent end in sight.
Overall revenues were up 11.6% y-o-y to $8,396.8m in the full year, helped in a large part by the ongoing acquisition spree by the company. Operating income was down 5.1% y-o-y to $719m. Across the three reporting segments:
– Less Than Truckload (LTL) saw revenues down 6.2% y-o-y to $3,702.94m and operating income down 15.0% to $361.24m
– Truckload revenue was up 51.7% y-o-y to $2,937.31m and operating income up 6.3% to $252.43m with a consequent hit to operating income margin
– Logistics, the smallest segment was the only bright spot with operating income up 13.9% y-o-y to $182.36m on revenues that grew by 7.3% to $1,821.71m
LTL a rock in Bédard’s shoe…
With plans to spin off the truckload segment and to become a pure-play LTL company not yet off the cards, Bédard expressed frustration at the LTL segment, saying it is “A big rock in my shoe!”
US less-than-truckload shipments, the largest revenue stream for the segment, saw numbers down across the board. In Q4, tonnage fell 2.9% and across the year while cutting operational costs the company has seen volumes fall. Bédard said bluntly, “It’s like a dog chasing its tail.”
One of the key areas TFI International will focus on in the coming year is drawing in more business from small and medium clients. Bédard again: “We’re losing small and medium customers and they have the best margins,” adding, “We have to be way more aggressive in sales [to these target customers].”
Most important for the chief executive is density of cargo carried per mile. Essentially he wants more freight carried over longer distances with fewer empty miles per truck. By now at his most blunt and direct, Bédard exclaimed, “Density is the name of the game. Our density is [expletive deleted]!”
Truckload margins falling sharply
Core to the planned spin-off of the Truckload segment is the acquisition of specialist truckload company Daseke, completed in April 2024. The margin for this segment fell 3.64 basis points y-o-y to 8.59%, with acquisitions adding $1,061.3m (36.1%) to the segment’s revenues.
Bédard has long bemoaned the margins in Daseke, and in the earnings call added to his previous comments by saying, “We still have a lot of work to do to become lean and mean.”
Foggy into 2025
TFI International has given no firm earnings forecasts for 2025. Though many of his opposite numbers in the large scale trucking business in the US are upbeat about the coming year, once again the TFI International chief executive was blunt and direct, saying “It’s still very foggy. We’re still in a very deep recession. The volumes are not there. It’s going to be a very difficult 2025.”
Author: Richard Shrubb
Source: Ti Insight
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