Dive Brief:
- TFI International cut salaries at Daseke’s corporate headquarters by at least $12 million per year, TFI Chairman, President and CEO Alain Bédard said during a Q1 earnings call.
- The Canada-based freight giant is lowering costs by 75% at Daseke’s head offices over the next two years, the CEO said on the call. TFI anticipates spinning off Daseke late next year or in early 2026, he said.
- “The head office of Daseke was the cancer,” Bédard said. “Those guys were costing a fortune, and the results were not there. So, we did some cleanup.”
Dive Insight:
The corporate salary cuts at Daseke demonstrate TFI isn’t hesitating to ask its new billion-dollar acquisition to do “more with less” — something management instructs at its other operations.
TFI hopes integrating Daseke, which it acquired in April, will help scale and boost TFI’s truckload businesses, which suffered the most in another tough quarter.
TFI’s overall operating income fell to $151.6 million in Q1, compared to $166.4 million in Q1 2023, according to an earnings release. Its truckload operating income tanked by 41% YoY to $41.5 million in the quarter.
TFI attributed the overall decline in operating income to weaker market conditions. A Producer Price Index for long-distance TL general freight trucking has hovered around the same level for all of Q1.
Daseke’s corporate headquarters cost about the same as the TFI headquarters to run, indicating head office costs were “through the roof,” Bédard said.
Other than the head office, most of Daseke’s business units operate well, the CEO said.
“There's maybe one or two that are subpar, OK, that we're going to have to work on,” he said.
