Dive Brief:
- Montréal-based TFI International is turning to the head of its Canada packaging business to help turn around its TForce Freight LTL business, CEO Alain Bédard said during a Q2 earnings call Tuesday.
- EVP Bob McGonigal will take over the company’s U.S. LTL operation, which it acquired from UPS in 2021, working alongside TForce Freight President Keith Hall, the company reported on the call.
- TForce Freight’s operating ratio took a hit in the quarter, increasing to 91.5% from 88% in Q2 2022. McGonigal will oversee a series of ongoing changes projected to improve the measure to about 85% to 88% next year, Bédard said. The shuttering of Yellow Corp. should also help the LTL market recover, he said.
Dive Insight:
TFI International closed on its acquisition of UPS Freight in Q2 2021, launching TForce Freight and posting a 90.1% operating ratio that quarter.
Amid the downturn, the transportation provider continues to make steps to bring its operations under control.
Part of that solution is eliminating duplicate costs, given legacy platforms carried over from UPS. Bédard said the company recently switched its human resources platform and will finish other work before year’s end.
“All these duplicate costs, all these professional fees, will disappear,” said Bédard, who is also TFI’s president and chairman of the board.
Other LTL providers, such as Old Dominion Freight Line and Saia, have also recorded YoY slips in their operating ratios in Q2.
Meanwhile, TFI’s LTL operations in Canada are operating better — but that business still experienced a slip, too. The carrier reported its Q2 operating ratio there increased from 69.1% in 2022 to 73.7% this year.
“The main reason ... why we're doing so well in Canada is because our guys have the financial information, ... they have the tools, the info, and they take action,” Bédard said.
To further improve its U.S. LTL segment, headquartered in Richmond, Virginia, TFI is also implementing other changes. That includes providing more information to terminal managers to better manage costs, people and customer relationships, Bédard said.
With a shift away from UPS’ financial system, the company is slowly moving financial information to managers, such as the average labor cost per shipment, so that they can take action and reduce costs, he said.
“By providing financial information ... to our terminal managers, I think that that's been the success of our business in Canada,” he said.
