Logistics Segment Q4 Carries TFI International Through Economic Headwinds

TFI

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A strong fourth quarter for its Logistics segment helped Canada based logistics company TFI International through the economic headwinds faced by the industry in 2023. Where the Logistics segment saw a 25.6% y-o-y uplift in revenue in the fourth quarter, overall operating income for TFI International in the full year was down 33.9% to US $757.6m, and overall revenues down 14.6% to $7.52bn.

Speaking of the overall results, TFI International’s President and CEO Alain Bédard said, “During the fourth quarter we were able to grow revenue over the prior year period.” In a large part this was down to the Logistics segment of the company seeing strong revenue growth of 25.6% to $471.6m and operating profit growth of 9.1% to $54.7m.

The Logistics segment had such growth due to the acquisition of JHT in August. At the time Bédard said, “We were immediately impressed by JHT’s well run operations, its asset light approach and leadership in the differentiated niche market.” JHT has annual revenues of $500m, so promises to significantly boost full year results at TFI International in 2024.

For the full year though, all segments saw drops in revenue, led by volume declines in the freight recession affecting North America:

  • Package and Courier saw a 26.9% y-o-y operating income decline to $114.4m and a revenue drop of 7.6% to $461m
  • LTL saw a 14.4% revenue drop to $2,777m and operating income fell 34.1% to $471m
  • Truckload revenue fell 18.2% to $1,652m and operating income was down 35.3% to $237m
  • Logistics saw revenues fall 5.0% to £1,604m and operating income increase by 14.0% to $160m

The company continues its programme of acquisitions, with the $1.1bn purchase of Canadian FTL company Daseke due to complete in Q2 of 2023. Speaking of the acquisition, which includes 4,900 tractor units, 11,000 flatbed and specialised trailers and more than 1.1m sq ft of industrial warehouse space, Bédard said, “Daseke’s deep expertise in servicing a broad portfolio of specialised and industrial end markets such as high security cargo, agriculture, manufacturing and construction is critical given the relative strength of specialised market dynamics today.”

Looking forward, Bédard seems to see signs of a gentle recovery across all segments after what was a tough year in 2023. He concluded, “We’re entering 2024 in an attractive position across all four business segments… with the ongoing turnaround of LTL a top priority.” This reflects the position of many of the company’s competitors in North America – a glimmer of light after a poor performing previous year.

Source: TFI International

 

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