TFI agrees to buy Gorski, raises guidance
MONTREAL, Que. – TFI International raised its 2018 EBITDA guidance yesterday, due to a strong trucking environment.
“The general freight environment is strong throughout North America, and all of our segments are benefiting,” Alain Bedard, chairman, president and CEO said on a Q3 earnings call with analysts. “As a result of these favorable conditions and our own success driving profitable growth, today we are raising our 2018 EBITDA guidance to a range of $665 million to $675 million, from the prior range of $635 million to $645 million.”
Bedard said he’s predicting a strong peak shipping season, especially for the parcel and courier (P&C) segment.
“If we look at the Canadian side, our P&C is just busting at the seams,” Bedard said. “The guys are just going crazy with volume.”
He also said the LTL trans-border segment is doing well, as is intermodal. Over-the-road LTL in Canada is not growing, however, as retailers are losing business to e-commerce. Bedard said he’s also optimistic about the U.S. business in the fourth quarter.
The focus for TFI International, Bedard said, is on improving the quality of revenue.
“Our focus has always been the same…let’s address the cost issue, maintenance, fuel economy, etc. Efficiency. Making sure that the customer we serve fits the network and let’s not be a jack of all trades and a master of none,” Bedard said.
As strong as 2018 has been, Bedard thinks 2019 will be even better.
“I would feel very confident that 2019 is going to be better than 2018,” he said.
On the mergers and acquisitions front, Bedard revealed the company has acquired Gorski Bulk Transport, and will likely make three or four more purchases before the end of the year in Ontario and Quebec.
“The Gorski acquisition was fantastic,” Bedard said. “Gorski has a small operation in the U.S., very small, but it’s our first foothold in the U.S. territory in terms of specialty truckload, and we could add to that probably within the next six to 12 months.”
Bedard is also optimistic a new trade deal with the U.S. and Mexico, and the impending electronic logging device (ELD) mandate in Canada will also benefit the company. Certain aspects of the new trade deal benefit e-commerce, Bedard noted.
“We believe we are going to see a lot more activity between the U.S. and Canada,” he said. “Goods flowing from the U.S. to the Canadian consumer…On the truckload side, we’re so busy right now and we have tariffs on steel, we have tariffs on aluminum – they’re still on. So, we lost a little volume on the steel side but our guys are so busy in other sectors that we don’t see anything, we don’t see a drop in our business. And now if the tariffs go away on the steel side, I mean, we’re just going to be even more busy.”
As for ELDs, Bedard said they will help level the playing field.
“It’s going to be, in my mind, a big benefit for safety in Canada and it’s also going to eliminate some cheating, sad to say,” Bedard said. “So that’s going to be favorable to us, because we don’t cheat.”
He anticipated the Canadian market will contract slightly when the ELD mandate is passed, as it did in the U.S.
For details on TFI Internationals’ Q3 earnings, go here.
Have your say
This is a moderated forum. Comments will no longer be published unless they are accompanied by a first and last name and a verifiable email address. (Today's Trucking will not publish or share the email address.) Profane language and content deemed to be libelous, racist, or threatening in nature will not be published under any circumstances.