TFI’s Bedard Optimistic About U.S. LTL, but some of Its Issues Persist

Why It Matters

The outlook signals a potential turnaround for a major U.S. LTL carrier, influencing investor sentiment and competitive dynamics in a market still grappling with service quality and cost pressures.

Key Takeaways

• U.S. LTL operating ratio slipped to 95.3% in Q1
• TFI stock rose 73% YoY, 32% past month
• BOA upgraded TFI to Buy, citing LTL improvement potential
• Flatbed rates surge; Daseke acquisition adds specialty truckload growth

Pulse Analysis

TFI International’s U.S. LTL unit still bears the scars of its 2021 UPS Freight purchase, where a lax, “monopoly‑style” culture left the network over‑extended and density‑poor. Bedard’s candid remarks about “stupid” practices and long haul pickups underscore the structural challenges of integrating a legacy carrier into a leaner, cost‑focused model. The recent combined operating ratio of 95.3% reflects both the lingering inefficiencies and the difficulty of assessing U.S. versus Canadian performance after the two segments were merged for reporting.

Financially, TFI has surprised the market. The company’s shares have surged 73% in the last 52 weeks and 32% in the past month, prompting Bank of America to lift its rating to Buy. Analysts appreciate the modest EPS guidance of $1.50‑$1.60 for Q2, which exceeds consensus, and they see cash‑generation upside as the U.S. LTL business trims costs, reduces claims to 0.6%, and improves service reliability. While winter weather depressed Q1 volumes, March and April showed roughly 8% year‑over‑year growth, hinting at a soft rebound in a still‑tight freight market.

Strategically, TFI is leaning on its specialty truckload and flatbed platforms to offset LTL headwinds. The late‑2023 acquisition of Daseke for about $1.1 billion has begun to bear fruit, with higher revenue per mile and an 8.4% reduction in the truckload fleet, boosting productivity. Flatbed rates are climbing, driven by a manufacturing resurgence, and TFI’s integration of Daseke’s technology and financial systems is delivering early signs of demand recovery. Bedard projects 2026 as a transition year, expecting the LTL segment to finally break out of its three‑year slump and contribute to a more balanced, profitable growth trajectory.