TFI posts strong Q2 results

TFI International posted a strong second quarter as it continues to improve the efficiency of TForce Freight through a reshaping of its network.

Adjusted net income was up 76% to $241.1 million (all figures U.S.) year over year (once adjusted to reflect one-time gains in Q2 2021).

“TFI International produced exceptionally strong results despite volatile macro conditions, with strong across-the-board performance and robust free cash flow that demonstrates the strength of our operating principles, a wealth of internal levers to drive efficiencies, and the growing diversity of our end markets,” said Alain Bédard, chairman, resident and chief executive officer.

“Our adjusted net income grew 76% over the year-ago quarter and our free cash flow expanded another 16% above already strong levels. In addition to double-digit top line growth generated by LTL, TL and logistics, our operating ratios were remarkably strong, including 69% for Canadian LTL, underscoring the untapped potential across much of our network.”

Growth was driven organically and through acquisitions, the company reported in its Q2 earnings. LTL revenue grew 39% to $870.2 million, while truckload revenues jumped 16% to $556.9 million. Logistics revenue rose 12% to $453.7 million. The package and courier segment saw revenue decrease 14% to $125.1 million.

The quarter marked the first time the company generated more than $300 million in free cash flow in a quarter.

In a conference call with analysts, Bedard said he remains upbeat about current economic conditions.

“Oil being over $100 a barrel really helps some of our provinces in Canada,” he said. “The Ontario and Quebec economies are doing well. A lot of people are talking about a freight recession, or maybe a recession overall, but when I look at July we are still running on all cylinders.”

TForce Freight
(Photo: TFI International)

Bedard said the company is still overbooked 5-10% every day. However, he also said TFI International isn’t planning any major acquisitions this year as it continues to focus on improving TForce Freight operations. When taken over from UPS, the business wasn’t very profitable. TFI has reduced its operating ratio (OR) from 98 down to 88, and has a vision of bringing it down further to an 80 OR.

It has a roadmap for getting there. Refreshing the fleet will get it down two to three points, while improving productivity by picking up more freight with fewer stops should improve it by another two to three points, Bedard explained. Introducing new technologies to the fleet should add another one to two points of improvement. Improving linehaul operations should reduce the OR by another one or two points.

“So, we have a path to 80 OR but that takes time,” Bedard said, noting it may take another year or two to get there.

Meanwhile, the company continues to refine its network. It recently sold a large, underutilized California terminal for $80 million. It has also been shedding freight that “doesn’t fit,” Bedard said, and upon acquisition about a third of UPS Freight’s cargo fell into that category.

The acquisition came with about 11,000-12,000 dock doors, and Bedard feels that’s “at least 3,000 doors too many.”

He wants to see the company focus on freight that’s closer to its terminals, so drivers spend more time picking up and delivering freight and less time driving. Larger shipments with fewer stops. It is also cleaning up the facilities it inherited, pulling out fuel tanks and doing some environmental cleanup.

TFI’s package and courier segment is benefiting from a return of B2B deliveries, which tend to be more profitable than B2C, which surged during the pandemic.

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James Menzies is editor of Today's Trucking. He has been covering the Canadian trucking industry for more than 20 years and holds a CDL. Reach him at or follow him on Twitter at @JamesMenzies.

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