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TFI has strong Q3, but TForce Freight margins weaken

Operating ratio of US LTL unit creeps up following fairytale performance post-UPS deal

Margins at TForce Freight have improved dramatically since TFI acquired UPS Freight. (Photo: TForce Freight)

TFI International reported record third-quarter financial results on Thursday even as the performance of its U.S. LTL operation, formerly known as UPS Freight, took a slight dip.

The Montreal-based company’s adjusted net income of $138.9 million, or $1.46 per diluted share, increased 60% compared to a year ago and beat analysts’ estimates by seven cents, according to Seeking Alpha. Revenue came in at just under $2.1 billion, in line with estimates. 

TFI’s (NYSE:TFII) U.S. LTL operation, rebranded as TForce Freight, didn’t quite live up to the gravity-defying performance during the second quarter, the first three months of the Canadian company’s ownership.

The U.S. LTL operating ratio rose by six basis points to 90.7% compared to the second quarter, though it remains a dramatically better situation than the 99% — barely profitable — performance before the acquisition of UPS Freight closed on April 30

Regardless, TForce Freight is still performing far better than what the company has projected publicly.

“I’m particularly pleased that our strong performance comes at a time when the most compelling benefits from our pivotal acquisition of UPS Freight are still ahead, and yet firmly within grasp as the newly branded TForce Freight continues to exceed expectations under the TFI umbrella,” TFI CEO Alain Bédard said in a statement accompanying the release of financial results. 


TFI’s LTL business, which is overwhelmingly represented by TForce Freight, brought in $85.1 million in operating income on total revenue of $989.3 million, or 860.8 million excluding fuel surcharges. 

The company achieved the early leap in operating performance by targeting low-yield freight through repricing or cutting it altogether. It also has been increasing accessorial charges. 

But among its challenges, TFI has also faced a shortage of drivers at TForce as well as discontent over some changes. TFI’s move to cut truck speeds is the subject of a Teamsters complaint to the National Labor Relations Board. 

In TFI’s other businesses, the quarter was solid. The Canadian firm’s logistics segment saw its operating income increase by over 100% compared to a year ago with revenue rising by 94%, as its bet on U.S. asset-light operations continued to pay off. 

Truckload revenue increased by 19% to $488.6 million, while operating income dropped slightly by 1% to $55.8 million versus the third quarter of 2020. However, that drop is somewhat misleading, since TFI had received over $8 million in wage subsidies in Canada in the third quarter of 2020, compared to none in the current quarter.

Bédard will discuss the results during a call with analysts on Friday morning.

TFI U.S. LTLQ3/21
Shipments (in thousands)2037
Weight per shipment1048
Tonnage (in thousands)1067
Revenue per hundredweight$28.77
Revenue per shipment$301.41
OR%90.7%

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One Comment

  1. Joe

    It’s all smoking mirrors!! I work for Tforce out of Chicagoland terminal. We use to be the busiest in the country. We have layoff dock workers and drivers are sitting home not enough work?!? While competitors are still hiring? A lot customers are complaining why we still missing pick ups. They’re back to old UPS freight way of squeezing numbers and not worry about CUSTOMER service. As long stops per hour, property time, idle time, OT line up forget about everything else. Now that competition has space our customers are jumping ship!

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Nate Tabak

Nate Tabak is a Toronto-based journalist and producer who covers cybersecurity and cross-border trucking and logistics for FreightWaves. He spent seven years reporting stories in the Balkans and Eastern Europe as a reporter, producer and editor based in Kosovo. He previously worked at newspapers in the San Francisco Bay Area, including the San Jose Mercury News. He graduated from UC Berkeley, where he studied the history of American policing. Contact Nate at [email protected]