TFI Stock Down 14.7% as CEO Bedard Slams US LTL Unit

TFI International (NYSE: TFII) shares fell 14.71%, or $16.55, to $95.99 by early Friday afternoon after CEO Alain Bedard laid into the company's U.S. LTL operations on the third-quarter earnings call, admitting the business is running at an operating ratio close to 97 while its Canadian counterpart runs below 75.

The stock drop came almost as soon as the earnings landed late Thursday. Even with the selloff, TFI shares remain up 11.24% over the past 52 weeks and sit well above the 52-week low of $80.63, recorded on November 20 last year.

"Truckload is great," Bedard said on the call. "Logistics is great. U.S. LTL is not and I feel like I'm a broken record on that. We've got to correct the situation."

How bad is the US LTL operating ratio?

TFI does not break out operating ratios for the U.S. and Canada separately. The company-wide LTL OR for the third quarter was 91.3%, against 88.8% a year earlier. But Bedard filled in the picture himself.

"When we report a 91 OR, you can think that our U.S. operation is closer to a 97 and our Canadian operation is more like a sub 75," he said.

Canadian shipments run about 10,000 per day, against roughly 20,000 in the U.S., so the weak American network dominates the segment's blended numbers.

The comparison with peers is brutal. Old Dominion Freight Line (NASDAQ: ODFL) posted a 71.5% OR for the quarter, while XPO (NYSE: XPO) came in just over 80%. Bedard cited other LTL carriers' performance as a benchmark without naming them.

Who is the new manager?

Bedard said TFI is bringing in a new manager to run the U.S. LTL operations, on the job since October 1, though he declined to name the person. The executive was retired from an industry peer, and Bedard said the identity will be revealed soon.

"We need management to jump in and do the right thing," he said. "A new broom sweeps clean. We have got to change the recipe and that's what we're doing now."

He called the U.S. LTL business "a rock in my shoe" and said more hires beyond the new leader are needed to drive change.

Bedard was careful not to blame the unions representing LTL workers, repeatedly pointing the finger at management instead. But he acknowledged the structural constraint in the U.S.: "there's nothing we can do except build some kind of non-union network in parallel to the network that we have."

What role does Hercules Forwarding play?

The vehicle for that parallel network is Hercules Forwarding, a non-union carrier TFI bought in 2024 and now uses for roughly 1,000 LTL shipments per day.

"This is small," Bedard said. "But unless there is something of size that comes to us, the plan is going to be to slowly build that non-union company, like we do in Canada."

TFI's Canadian LTL operations mix union and non-union labor. "So it's OK. We'll run a second network if we can," he said. The goal "would be to bring more stability to TForce," the name of the U.S. LTL operations, built largely through the acquisition of UPS Freight in 2021.

Density remains the core operational complaint. Bedard said the average mile driven between each stop in the U.S. package and delivery operation is about twice that of the Canadian operation. "In Canada, we focus on trying to do business with customers that are close by and not run 100 miles to do a delivery," he said. TFI has tried to change that culture at the U.S. unit, "but it seems difficult to do." Fuel costs have magnified the density problem, he added.

Bedard also traced a "mentality of, we really don't care" to the legacy of UPS (NYSE: UPS) ownership, which directed investment toward its core parcel business.

Will TFI sell TForce?

One analyst asked the once-unthinkable question: might TFI divest its U.S. LTL operations? Bedard circled through a lengthy answer before landing on no.

"If you look at TForce, we want to be in LTL," he said. "I'm not happy with what's going on, but it's a fight. We've been fighting but losing." He closed flatly: "We have no intention of selling our US LTL operations at all."

"There's no more excuse on the fleet. There's no more excuse on the financial tools. It's just that we have the wrong guys," Bedard said.

What about Truckload and Daseke?

The Truckload segment recorded an 86.7% OR for the quarter, and Bedard credited the turnaround of flatbed operator Daseke, acquired in 2023 for $1.1 billion in a deal that once had TFI contemplating a truckload spinoff. Daseke ran ORs of 97-98% before the purchase; FreightWaves coverage of its pre-acquisition quarters shows OR performance at either side of 90.

"Daseke has been turned around very, very fast," Bedard said. "The Canadian operation is doing even better, but our U.S. operation is slowly catching up."

With a new U.S. LTL leader already on the payroll and a non-union buildout through Hercules taking shape, Bedard has signaled that the next several quarters will show whether management change — not capital — can close a 20-point OR gap with Canada.