TFI INTL INC earnings calls

U.S. LTL problems and fuel

Q (Ken Hoexter · BofA): How should we think about U.S. LTL performance, fuel impact, Q4 outlook and improvement potential into next year?

A: Management said Canadian LTL benefits from density but U.S. LTL has poor density and suffered from higher fuel and costly spot linehaul in 2026. They expect major improvement in 2027 after team changes, but they are cautious for Q4 because a six-year UPS partnership ends in early 2027 and that may force customers to find other solutions.

"Now, I am sure you saw in our MD&A, okay, another little thorn in our shoe for our U.S. LTL is our six years partnership with our friend at UPS is coming to an end, okay, in early 2027, right?" — Alain Bédard (CEO·CHAIR)

U.S. LTL margin and GFP size

Q (Scott Group · Wolfe): Where is U.S. LTL margin now, and does the UPS partnership ending only affect the GFP business? How big is GFP?

A: They said the UPS partnership is only the GFP reseller relationship and ends January 2027. On profits, management compared operating ratios: U.S. LTL closer to a 97% OR and Canadian LTL sub-75% OR. They also said GFP operating income in Q3 was a little over $4 million.

"Well, the operating income in Q3 was a little over $4 million." — David Saperstein (CFO)

Linehaul mix and spot market

Q (Jose · TD Cowen): Was 3PL mix still a factor lowering revenue per shipment in Q3, and how much rail vs truck is used and can they shift from spot to contracts?

A: They said 3PL mix remained a factor in Q3 but improved through the quarter. About 55% of miles are run by their own drivers, roughly 20% by rail, and they also use owner-operators and contracts; when volume spiked they relied on the spot market and that raised costs, but by quarter-end those spot needs normalized.

"About 55% of our miles is done through our own people, okay, our own drivers." — Alain Bédard (CEO·CHAIR)

LTL market and truckload outlook

Q (Ravi Shanker · Morgan Stanley): How do you view the overall LTL market on demand, pricing, competition and capacity? And what's the potential upside for truckload in 2027?

A: They said the U.S. LTL market is somewhat soft but pricing is holding because peers manage capacity well; the core problem is their own execution and mix. For truckload, they expect constrained supply to help in 2027, and they plan further internal tweaks to improve profitability over the year.

Labor cost and cost inflation causes

Q (Walter Spracklin · RBC): Why hasn't your cost structure insulated you from wage inflation, and where are you seeing the most inflation? Also questions on succession and M&A plans if LTL scale doesn't materialize.

A: They said driver wage inflation is real because of driver shortages, so they must get more efficient per asset and reduce empty miles. On LTL, labor isn't the main issue — third-party linehaul and spot costs drove inflation — and they will keep investing and consider acquisitions if the right opportunities appear.

"When you think about the theory is, if a guy delivers 15 shipments a day, you give him two more, okay" — Alain Bédard (CEO·CHAIR)

GFP effect and asset-light non-union plan

Q (Brian Ossenbeck · JPMorgan): Does GFP non-renewal affect your network density, and how will a non-union expansion work with current terminals? Also questions on liability and accident reserves.

A: They said GFP was a brokerage-run operation done by UPS, so its end does not affect their core operations. For a non-union build, they plan an asset-light model managing docks while third parties run P&D and linehaul, similar to their Canadian approach. On accident reserves, they said current accruals are normal and they focus on reducing accidents via tech and safety.

"On that, Brian, GFP is like a brokerage operation for us." — Alain Bédard (CEO·CHAIR)

What drives logistics growth

Q (Jordan Alliger · Goldman Sachs): Is logistics growth mainly brokerage or other services, and when will U.S. LTL profitability start to improve?

A: They said logistics growth is a collection of asset-light services tied to OEMs, data center and storage work, and recent acquisitions added organic growth beyond pure brokerage. For U.S. LTL, they have been changing the team and expect to see improvement after bringing experienced executives, but it will take time after three years of trying.

"We did $49 million of operating income in the quarter." — David Saperstein (CFO)

Sell or fix U.S. LTL?

Q (Cameron Doerksen · National Bank): Would you consider divesting TForce Freight if it takes too long to reach desired returns, or will you keep investing to fix it?

A: They said they have no intention of selling U.S. LTL and will keep fighting to fix it. The plan is to change management and build an efficient operation; if needed they will build a parallel non-union, asset-light network or seek a solid operator at the right price.

"We have no intention of selling our U.S. LTL at all." — Alain Bédard (CEO·CHAIR)

Path back to prior EPS levels

Q (Kevin Chiang · CIBC): Excluding U.S. LTL recovery, can you still reach prior peak EPS levels from other segments, and will you buy back stock now?

A: They said returning to prior EPS like $8 requires U.S. LTL contribution and a freight market recovery; other segments can add some but not enough alone. On capital allocation, they balance buybacks versus M&A and will decide in 2027 based on stock level and industry conditions.

"We need those guys to get the job done, right, to get to that $8." — Alain Bédard (CEO·CHAIR)

Contract renewals and service trend

Q (Bruce Chan · Stifel): What are you seeing on truckload contract renewals and driver cost headwinds? And where are LTL service levels now and headed?

A: They said contract rates are being renewed at higher prices and revenue per truck is up 13%, showing realized pricing gains. For LTL service, they admitted service deteriorated in early 2026 after volume and weather issues but now have stability at ~20,000 shipments and are focused on improving on-time delivery going forward.

"The revenue per truck per week, which we publish, is a really good indication of where pricing is, right?" — David Saperstein (CFO)

Outlook for 2027 by segment

Q (Konark Gupta · Scotia Capital): Do you expect volumes, margins and logistics growth to improve in 2027 across truckload, LTL and logistics?

A: They expect truckload supply constraints to help in 2027 though demand remains soft and more internal tweaks are needed. For U.S. LTL they expect the market to stay soft and they must fix service, mix and costs; logistics has strong organic growth potential and should continue to perform well.

"Yeah. Konark, we believe that 2027, on the truckload sector, the freight environment's going to be still soft, but the supply is going to be constrained, okay?" — Alain Bédard (CEO·CHAIR)

Truckload OR target for 2027

Q (Benoit Poirier · Desjardins): Given implied Q4 truckload improvement, what OR could you achieve in 2027 and will LTL OR improve or worsen next year?

A: They said Q1 2027 should show major improvement versus Q1 2026 and with current market conditions a sub-85% OR for truckload in 2027 is probably the best realistic outcome. For LTL they do not expect OR improvement and would be disappointed if consolidated OR doesn't break 90% in 2027 after staffing changes.

"I think that Q1 2027 is going to show major improvement versus Q1 2026." — Alain Bédard (CEO·CHAIR)

Is U.S. LTL structurally broken?

Q (Ari Rosa · Citi): Has your view evolved on whether U.S. LTL is structurally broken given union constraints, and what if new management can't fix it in 12–18 months?

A: They said the issue is management, not drivers or unions, and that drivers will perform if managed properly. Their plan includes building a parallel non-union, asset-light network because asset-light models need non-union structure, but the primary focus is changing day-to-day management in TForce Freight.

"So, when I talk about the issue of people, I am talking about the management." — Alain Bédard (CEO·CHAIR)