The head of international transport and logistics company TFI International (NYSE: TFII) said Tuesday that the company’s U.S. less-than-truckload operation, , has picked up about 3,000 shipments per day since it became clear that LTL rival Yellow Corp. was going out of business.
Alain Bedard, chairman, president and CEO, said the U.S. LTL unit was moving about 23,000 shipments a day before it became apparent that Yellow wasn’t going to survive and customers began looking elsewhere to move their freight. It then jumped to 26,000 shipments a day, Bedard told analysts.
A year ago, TForce was running between 28,000 and 30,000 shipments per day as it was culling unprofitable freight out of its system following its 2021 purchase of UPS Freight, Bedard said.
He characterized Yellow’s demise a “huge benefit for the industry” because it removes a low-price player from the market. “It’s a very special situation.”
TForce will focus on building density in the U.S. rather than chase new freight, Bedard said, noting that there is still too much distance between pickups in the U.S. network.
“We want to increase our density. We have 4,000 too many doors as it is,” he said.
TForce will also focus on accepting freight from existing customers who used Yellow, he said.
Bedard’s comments come as TFI reported across-the-board revenue declines in its four major segments, as well as adjusted diluted earnings per share results of $1.59 that came in below Wall Street consensus of $1.82. The company also reduced its EPS outlook for the year to between $6 and $6.50 from $7 to $7.25 a share.
The second quarter was “terrible for us. Very tough,” Bedard said. “We never imagined such a major disruption in the freight market as we saw in Q2,” he added.
The TForce unit’s operating ratio, the ratio of revenues and expenses, came in, on an adjusted basis, at 91.5. Bedard said he would be “disappointed” if the unit wasn’t running in the 85% to 88% range in 2024. High inventory levels that have restrained freight growth have been coming down slowly, he said, but that will be a 2024 story.
The TForce unit could accept up to 30,000 shipments per day without disrupting the unit’s OR plans, Bedard said.
TFI has allocated $500 million for acquisitions and share repurchases, he said. This year will not be a milestone for acquisitions, though TFI will soon announce what Bedard called a “fantastic transaction.”
Meanwhile, TForce’s Teamsters members decisively ratified a five-year contract, which calls for increases for full-time local cartage and clerks of $4.50 per hour over the life of the agreement. Road drivers will receive increases to their current mileage rate over the length of the deal, starting at just under 76 cents per mile in August 2023 and increasing to just under 83 cents per mile by January 2028. The agreement was ratified by 81% of those who voted. The Teamsters represent 7,800 TForce Freight employees.
Gregory Davis
I worked for Yellow freight. I’m Homeless due to layoff. Teamsters are useless they sold out.
Joe
We are leaving so much business behind customers are calling competitors to pick it up at higher rate. All carriers in Chicagoland have called their employees back from layoff and are hiring again. While at Tforce there’s no equipment to have our guys back to work.
Dick Bischoff
“The second quarter was “terrible for us. Very tough,” Bedard said. “We never imagined such a major disruption in the freight market as we saw in Q2,” he added.”
The Canadian goof ball won’t pick up or doesn’t want to pick up shipments outside every terminal’s 30 mile radius and he wonders why his business plan sucks. Service coverage map looks like swiss cheese, shippers will go to carriers that have full state coverage and pricing.
Good Day
Freight Zippy
I hope they are not accepting the Yellow pricing that was in existence?
If not, then this is a shot in the arm and a bonanza for T Force.
Now they need to fix their work rules to match the 21st Century and perhaps then they could compete with the well managed carriers.