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BusinessDriver issuesLess than TruckloadNewsTop StoriesTrucking

TFI needs drivers at leaner, meaner UPS Freight successor

Company works to seat trucks amid post-acquisition attrition as it cuts salespeople

TFI International bought UPS Freight with plans to make the LTL carrier “lean and mean,” a turn of phrase CEO Alain Bédard likes to use. While the company is implementing that strategy, including recent cuts to salespeople, one thing it needs more of is truck drivers. 

As of late July, Montreal-based TFI (NYSE:TFII) was employing 5% fewer Teamsters members — about 10,540 people — in the rebranded TForce Freight than the 11,100 UPS (NYSE:UPS) had as of Dec. 31, according to a recent SEC filing. While TFI and the Teamsters, which represent more than 75% of TForce Freight employees, declined to comment on the drop, sources close to the company and union said drivers had been leaving faster than they’re being hired.

The issue reflects, in part, a larger problem facing the trucking industry: hiring and retaining drivers. But comments made by Bédard to financial analysts in July suggested that the change in ownership compounded the issue.

“We had people retire when we took over,” Bédard said after TFI reported second-quarter financial results. “You know, we had some people say, ‘You know what. This is not UPS. Who are these guys? I don’t want to know who are these guys.’ So they just retired. OK, so we’re going through that now.”

The $800 million UPS Freight acquisition, completed on April 30, represented the most ambitious effort for TFI to date, adding a fleet of 6,300 tractors and nearly 200 facilities. The Canadian company has built itself into a North American trucking and logistics powerhouse by buying up and turning around companies with a mandate for ruthless operational efficiency.

Nothing, though, has approached the scale of UPS Freight.

Lack of drivers holding back volume growth

TFI needs drivers to boot LTL volumes at TForce Freight. (Photo: Brian Straight/FreightWaves)

The lack of drivers hasn’t stopped TFI from improving TForce Freight’s profitability. In just a few months, the Canadian company brought the unit’s operating ratio from 99% — barely profitable — to below 95% by targeting unprofitable freight. However, as Bédard noted, the driver issue is one of the reasons why it doesn’t expect volumes to grow in 2021. 

“I think it’s not possible. No. 1 is because, you know, we’re looking for drivers. We’re looking for dockworkers as we speak,” he said.

TFI also has the firepower to spend what it needs to in order to attract and retain drivers. The company generated nearly $300 million in net cash flow during the second quarter. It also is hoping that massive modernization of the aging fleet it acquired from UPS will help keep drivers happy. 

TForce offering bonuses, hybrid mileage-hourly pay

TFI also would not comment on what it’s doing to improve recruitment and retention of drivers. TForce Freight does not appear to be chasing the eye-popping mileage rates being offered by other carriers, at least publicly.

Positions being advertised on behalf of TForce Freight on UPS’ website quote mileage rates in line with the minimums laid out in Teamsters contracts, which range from 50 cents to 72 cents per mile for long-haul drivers. TForce is free to go above those rates.

Some of the open over-the-road driver positions offer potentially lucrative packages. One linehaul position in New York was offering $25.50 per hour plus 65 cents per mile, while another in Pennsylvania included a bonus of up to $10,000 in addition to $17.70 per hour plus 50 cents per mile.

Beyond the rates, the unionized driver positions include a slew of benefits, such as vacation — which can eventually hit five weeks — health insurance, 401(k) and a pension. Though what happens to those benefits, particularly the pension, will be a big open question the current contract expires in 2023.

Bédard has on several occasions since the acquisition said that the largely unionized operation isn’t standing in the way of growing TForce’s profits. Meanwhile, the company and the union have a vested interest in ensuring that driver rolls remain filled. 

TFI cuts sales staff after CEO bemoans high costs

On the sales side, TFI has been addressing what it sees as the opposite problem. Earlier in September, TForce cut a significant number of salespeople, who aren’t unionized, according to sources close to the company. TFI declined to comment on the cuts.

Bédard expressed displeasure with the costs of the sales side of the business. He told analysts in July that TForce Freight had been spending $350,000 a month on sales. 

“I fell off my chair when I learned that — impossible,” he said. “So we are now working with the team to address [it]. This is not normal, guys. I mean, what are we doing?”

TFI’s stock has more than doubled since the UPS Freight deal was announced. Investors will get another glimpse at how the integration of the acquisition is going when the company reports third-quarter financial results, likely in late October. 

Read more

Click for more FreightWaves articles by Nate Tabak

Nate Tabak, Border and North America Correspondent

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 ntabak@freightwaves.com.

20 Comments

  1. I had a claim for damages the company caused they destroyed it and refused the claim and it’s there fault know it’s going to court there impossible to contact there customer service is some to be desired it’s not ups I refuse to do any shipping with them and I hope more companies do the same there terrible

  2. I am a driver at TFORCE FREIGHT, as a part of the benefits you forgot to mention the most important and if that is removed as a benefit in the new contract on 2023 TFORCE will ha to face thousands of us leaving the company, what’s that?… THE PENSION, we have both 401k and PENSION plan, as you see guys are leaving, and another group just left due to the introduction of a new package in addition to our medical plan(Teamcare), we have one of the best pension plan in the nation and if they removed from us we have no more reasons to stay here, the salary Is not like FedEx freight or Saia and other ones, that’s why no one moves here, there is no motivation for the workers to talk anything about this company. So far we have in the contract the right of uniforms and so far we just got shirts, lol, they told us that we have pay for our pants, remember, we are Union and we are United, the only reason we let them di that is because we want to help them to grow and in order to have a decent contract on 2023 with pension, so far in salary they can no compete as I mention other companies are biting our salaries for more the $3.00 more per hour. Believe or not one reason driver are leaving is because they are thinking, that if they cannot keep the promise of the uniforms, who can guarantee us they will take care of us?. So far no one from TFORCE show up to our terminal and give a motivation to stay, so far everyone is getting ready looking jobs.

  3. Start by telling the truth. No employee has ever met a TFI manager, they’ve given a pep talk using a overnite/ups freight manager, there’s a lot of mis trust.they still have UPS FREIGHT management running the show(the same crew that couldn’t sail the ship in the first place) .currently they are cutting runs due to a lack of freight. You want positive changes in trucking, start playing a fair game.

    1. Yup they need to bring in there people I agree weed out bad management. Make company into a bad ass freight train mashing threw the highways and byways

  4. I applied in Raleigh NC and the pay they offered was way to low to drive a truck. If the wage was realistic I wouldn’t mind driving for the company. The wage I was told was what I made back in the 80s.

  5. I worked for the company and quit after 5 years. Operations manager has driven drivers and other staff to the point of misery. Disrespectful, humiliation, and this person still is employed. Go figure the root of the problems are right in front of their face. I will say the head director is useless.

  6. It’s the same management we had under UPS Freight, the ones who drove into the ground in the first place. There is no communication from TFI at all. We the employees do not know what they want other than being profitable. The majority of drivers left after the sale when they noticed that were no changes being made, they were tired of the bull, lies, being overworked and underappreciated. Then to top it off the CEO decided to turn down our road trucks to 65, but in the desperation of our shop manager he turned them down to 64, in states that are 70mph. He stated it was for safety reasons, take a ride with us sometime see for yourself how unsafe it is. TFi wants to hire workers? reduce management retrain the ones that are left, retention bonuses for the employees turn the trucks back up treat us like the adults we are.

  7. TFI is the same outfit that bought Conway Truckload/CFI. They’re bottom feeders. Genius move, cutting your sales force when you’re taking over a company. TFI is nothing but carpetbaggers from Canada. Good luck to the drivers if they stick around, there’s better jobs out there, including the real Buster Brown.

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