Dive Brief:
- TFI International will delay the spinoff of Daseke and its other truckload holdings until it can acquire another major LTL carrier, Chairman, President and CEO Alain Bédard said on a Q3 earnings call Tuesday.
- TForce Freight’s parent company hopes to close a $4 billion-$5 billion deal for another U.S. business around the end of next year for more market capitalization before a split, Bédard said.
- In the meantime, TFI is divvying up its real estate and equipment holdings to prepare for the spinoff, which he estimated could be delayed until 2026 or 2027. “First we have to do this deal,” he said.
Dive Insight:
Bédard has no delusions about his company’s ability to dominate LTL share in the U.S. as it does in Canada. TForce Freight’s pricing is lower than its competitors, he acknowledged, because it does not offer their levels of service or damage claims ratio.
“We will probably never be the dominant player in the U.S.,” the TFI CEO said. “But we have to be more of, like, maybe a No. 3 or No. 4, not No. 6 or No. 7.”
“Twenty-two thousand shipments a day,” he added, his voice trailing off. “We’re too small.”
The Canada-based company’s “preferred M&A target is in the U.S.,” Bédard said.
TFI previously disclosed its acquisition of ArcBest shares, stoking rumors it might acquire the other major unionized U.S. LTL carrier, ABF Freight. Timing didn’t work out last year, but ArcBest in May lowered the vote threshold for any future acquisition of the company.
TFI walked away from an M&A deal this year because the parties couldn't agree on a price, Bédard said. Future acquisition targets could include nonunion, asset-light brokerage operations in the U.S., he said.
FedEx Freight is also heading toward an expected spinoff, with a review of its role in the FedEx portfolio wrapping up by the end of the year. A FedEx Freight spinoff would be positive for both FedEx shareholders and other LTL providers, TFI’s Bédard said on the earnings call.
“But it's not easy to do,” Bédard said, reminding investors that TForce was once UPS Freight. “It's not a very easy process.”
