Benjamin Mohr Mok

Benjamin Mohr Mok asked for the U.S. LTL operating ratio outlook for Q2 and the full year, and requested more detail on the strategy to grow small and medium-sized business (SMB) accounts.

Answer

Executive Alain Bedard projected the U.S. LTL operating ratio would improve from 99% in Q1 to around 96% in Q2, with a goal of reaching the low 90s by year-end. He explained the SMB strategy involves smarter pricing to retain profitable accounts rather than losing them to broad-based rate increases. He also highlighted a renewed focus on growing the GFP product, whose revenue decline has now stabilized.

Benjamin Mohr, on for Ariel Rosa, asked whether TFI is losing entire small and medium business (SMB) accounts or just volumes, and sought quantification of the potential OR improvement from various initiatives.

Answer

Executive Alain Bedard clarified that the issue is high customer churn in the SMB segment, where TFI is losing more accounts than it is gaining. Regarding initiatives, he estimated that fleet management improvements could save $20-$35 million annually, while fixing billing and bad debt could save another $10-$15 million. He stated it was too early to quantify savings from a new P&D software, and that improving density has so far yielded no results, reinforcing the need for an M&A-driven solution.

Benjamin Mohr Mok, on for Ariel Rosa, asked for clarification on the timeline for achieving a sub-90% OR in U.S. LTL. He also questioned why service perception hasn't improved from 2023 to 2024 despite significant efforts.

Answer

CEO Alain Bedard clarified that he would be very concerned if a sub-90% OR isn't achieved in the second half of 2025, admitting he underestimated the time required for the cultural turnaround. He attributed the lack of service improvement to a step back in claims performance and ongoing issues with missed pickups, suggesting the current incentive programs are not effective and will be revamped for 2025.