TFI International reported lower fourth-quarter and full-year earnings as weaker freight demand weighed on volumes across its core business segments, though the company generated stronger cash flow.

Fourth-quarter operating income fell to $127.2 million from $160.2 million a year earlier, while net income declined to $71.7 million, or $0.87 per diluted share, compared to $88.1 million, or $1.03 per share, in the prior-year period. Revenue slipped to $1.91 billion from $2.08 billion.

For the full year, net income totaled $310.6 million, or $3.72 per diluted share, down from $422.5 million, or $4.96 per share, in 2024, as softer market demand reduced revenue in the less-than-truckload and logistics segments.

Despite the earnings pressure, the company highlighted improved free cash flow and increased its dividend.

“We finished 2025 on a favorable note, delivering robust free cash flow that topped $10 per share for the year, driven by our entire team’s keen emphasis on customer service and operational efficiencies,” said Chairman, President and CEO Alain Bédard.

On a conference call with analysts, Bédard acknowledged spot market pricing has improved but contract rates, which lag the spot market, have not yet moved. But he added shippers are now trying to lock in low rates, a typical precursor to stronger contract pricing.

“When shippers start to see a movement upward in the spot market, they try to get into a long-term agreement with you at those low rates,” he said.

However, he said there continues to be excess capacity and little growth in demand. Bédard says customers are still nervous about making significant investments and will likely continue to be so until a new trade agreement is reached between Canada, the United States and Mexico.

Nonetheless, Bédard said the company is well positioned for a turnaround, having implemented new technologies giving it visibility into finances by terminal and new tools to assist in managing the business.

It is also making a deliberate shift from retail freight to industrial, having seen the rise of the gig economy and Amazon in retail goods delivery.

“The retail economy is increasingly controlled by the gig economy. The focus of ours is to move away as fast as we can from the retail economy,” Bédard told analysts. TFI International is targeting shipments of at least 1,450 lb (657 kg).

“We’re normally paid by the weight, but the cost is not based on the weight, the cost is based on the movement,” Bédard said of LTL deliveries.

The company is also looking to become a reliable partner in the construction of data centers.

“We have one of the largest flatbed fleets in the U.S.,” said Chief Financial Officer David Saperstein, adding data center construction is a high-value niche segment that is in its infancy.

In terms of mergers and acquisitions, Bédard doesn’t anticipate any major deals in 2026, but will continue to take advantage of smaller tuck-in acquisitions.

“Large deals take time,” he said. “We have to be very careful. Until we have a deal between the three countries, a NAFTA-kind of deal, it’s very difficult to do a deal of size because we don’t know what the rules are going to be…There are too many unknowns between the three major countries [Canada, the United States and Mexico].”