TFI International’s turnaround of UPS Freight is running ahead of schedule, the company said Tuesday as it announced that it expects the LTL business, now called TForce Freight, to post an adjusted operating ratio below 95% for the second quarter.
TFI (NYSE:TFII) provided no details in what marks an unusual preannouncement ahead of the release of its second-quarter financial results on July 26. But the improvement in margins for the division “is consistent with companywide strong performance during the quarter.”
The Montreal-based trucking and logistics firm has previously provided expectations that TForce Freight’s margins would improve to 96%-97% percent within a year.
Instead, the division beat that target, and it happened only two months after the $800 million acquisition closed on April 30. While it might seem remarkably quick, working in TFI’s favor has been a red-hot U.S. LTL market.
UPS Freight was largely unprofitably under UPS’ ownership. TFI CEO Alain Bedard told analysts that his company’s plans for the LTL operation boiled down to making it “lean and mean,” which included renegotiating rates with shippers.
The acquisition is TFI’s largest to date. It added 6,300 trucks and 14,500 employees, including 11,500 Teamsters members.