Mullen Group is increasingly likely to invest capital into the U.S. market if Canadian politicians don’t “get their act together” in response to the threat of U.S. tariffs.

Speaking to analysts on a Q4 earnings call on Feb. 13, chairman and senior executive officer Murray Mullen made no secret that he’s more bullish on the U.S. market than in Canada.

“It really depends on Canada’s response to how it’s going to be competitive with the Americans,” Mullen told analysts. “If Canada doesn’t get its act together – the politicians and Canadians – we’re going to turn our attention to the U.S.”

So far, he doesn’t like what he sees. He noted that trucking businesses in the U.S. are excited about the growth opportunities they see under the Trump administration. “Up here, we’re on our heels a bit,” he said.

Mullen sees no economic growth for Canada this year. “If they’re going to win, we’ve got to follow the money,” Mullen said of the U.S., noting the Canadian dollar is “worth nothing.”

“If Canada is not a place to deploy capital, we’re not going to deploy it here,” he added, noting the company has pivoted in the past due to changing market dynamics, such as when it lessened its reliance on oil and gas. “I hope I don’t have to pivot away from Canada, but I have to do what’s best for our shareholders and if pivoting away is required for our shareholders, I’ll pivot.”

The U.S. trucking industry, Mullen reiterated, is flashing signs of improving demand and increased optimism. Mullen Group currently operates a 3PL business in the U.S.

While Mullen remains poised to make acquisitions on either side of the border, those will have to fit three criteria: the target must be a good fit with Mullen Group; the price must allow for an ROI; and there must be synergies available.

Mullen was coy about the type of acquisition he’d seek south of the border, but he indicated it wouldn’t be LTL. “We can’t get big enough,” he said of becoming an LTL player in the U.S. “We’re looking at other verticals where we think there’s opportunity. I can’t say more than that. We’re going to go where the capital goes.”

Financial results

Mullen Group posted Q4 and full-year 2024 earnings Wednesday evening, with revenue basically flat for the quarter and full-year periods.

Profit slipped by $10.5 million, or 35.7%, to $18.9 million on the quarter due largely to foreign exchange implications related to the company’s acquisition of ContainerWorld Forwarding Services. Adjusted net income was down 6.3% on the quarter and 11% on the year.

Mullen praised his business units and their people for weathering a difficult year.

“It took a lot of hard work by everyone in our 40 business units and at corporate office to mitigate the very challenging market conditions,” Mullen said. “Not only was demand soft, but pricing pressures intensified, due to undisciplined competition. These were difficult issues to deal with, so for Mullen Group to accomplish what we did last year, keeping revenues flat and improving operating income before depreciation and amortization, is something all of our business associates and teams can be proud of.”

In written comments, Mullen said: “From a demand perspective, I do not believe that 2025 will be any better than last year. The Canadian economy remains rangebound, at best, with downside risks emerging due to the potential for trade disruptions between Canada and the U.S. And, when you couple trade disruptions along with the fact that Canada is lagging in terms of capital investment, the only conclusion that I come to is that the demand for freight services will continue to underwhelm.”

When it comes to Q4 revenue by segment, LTL was down 0.3%, logistics and warehousing up 14.3%, specialized and industrial down 15.3%, and U.S. 3PL was off 0.4%.

Supply and demand will dictate growth opportunities

Mullen admitted he sees little growth coming to the Canadian economy in 2025, while “costs remain elevated due to inflation and legacy costs.”

He said the company will remain “ultra-cautious” until it sees signs of stabilization. Market improvements will be driven by only two factors: growing demand and reduced supply. Mullen doesn’t expect the former to happen this year.

“We made an assumption, we think [the Canadian economy] is going to be about the same,” he said. “We don’t see any uptick. We don’t see Canadians having more disposable income, so we think the demand side is going to be relatively flat.”

He does, however, expect to see capacity further sucked out of the market.

“We’ve had too much supply and that’s why prices have been so low, and customers have been taking advantage of that situation,” Mullen said. “There’s excess supply so they win. It’s going to revert to the mean. Our competition is weak and dying. Until then it’s just a fistfight.”

In the meantime, Mullen said the company will adjust and adapt to changing market conditions as required, in close communication with customers. And if it can’t find attractive acquisition opportunities, Mullen said the company will invest in itself through share buybacks.

He also said he’s grateful to have a strong balance sheet during such an uncertain time. “Our shareholders don’t have to worry about their dividend and our people don’t have to worry about their jobs.”