TFI International’s operating income dropped 19.2% year over year in Q4, the company reported Wednesday.
Ongoing freight demand weakness and underperformance of TFI’s U.S. LTL unit, TForce Freight, drove the company's operating income decline, according to its earnings report.
TFI CEO Alain Bédard repeatedly described TForce as the “big rock in my shoe” and the company’s largest problem in a quarterly earnings call on Thursday.
TForce’s operating income dropped by more than one-third YoY — a nearly $36 million decline — to $70.3 million in Q4, the carrier reported.
“This is like a nightmare for me,” Bédard said.
TForce has improved its service, the CEO said, but its damage claims rate increased for the second consecutive quarter to 0.9%, and it has lost market share among the high-margin local business customers.
Reduced damage claims and local business growth have been key areas of improvement for LTL competitor XPO.
Missed pickups continue to plague TForce, Bédard said, another issue contributing to its sales team’s difficulties.
“Right now, if you look at my missed pickup, I still have way too many,” he said. “I've got about a little shy of 400 a day that we miss pickup.”
The missed pickups exacerbate declining shipment counts, which dropped 6% YoY in Q4, Bédard told analysts.
TFI has managed to lower TForce’s fleet age to an average of 4.2 years, but maintenance costs remain too high, the CEO said.
“We still have a lot of work to do at TForce Freight on the fleet side to reduce our costs,” Bédard said.
