TFI International delivered a strong second quarter by most financial measures, but the company’s results highlighted two very different stories across its major business segments.
The transportation company reported second-quarter diluted earnings per share of $1.65, up 41% compared with the same period last year. EBITDA also increased by more than 11%.
However, the improvement was largely driven by TFI’s Truckload operations and Logistics segment, while its LTL business, which represented 41% of company revenue, improved at a slower pace.
The contrast between the two segments was particularly visible in EBITDA margins. LTL recorded an 18% margin, while Truckload reached 24.1%. The Logistics segment posted a 16.3% EBITDA margin. During the first quarter, Truckload and LTL margins stood at 19.5% and 12.1%, respectively.
Although LTL posted a larger percentage improvement during the quarter, its profitability continues to trail the stronger performance of the Truckload segment.
During a conference call with analysts, TFI CEO Alain Bédard and CFO David Saperstein explained that the two businesses are currently experiencing very different market conditions.
Truckload benefits from supply constraints
According to Bédard, the current strength in Truckload pricing is mainly driven by limited capacity rather than a surge in demand.
“What we see on the pricing side of Truckload is very impressive,” Bédard said. “It’s mostly because of the supply constraint, not because demand is going through the roof.”
Saperstein said Truckload revenue per truck per week accelerated throughout the quarter, increasing 11.1% year over year in April, 13.3% in May and 14.4% in June.
Operational performance also improved significantly. TFI’s Truckload operating ratio (OR) declined from 92.7% in the first quarter to 86.1% in the second quarter.
Bédard said the current Truckload market differs from previous strong cycles because supply constraints, rather than temporary demand spikes, are shaping the industry.
“In a normal trucking environment, guys used to make a lot of money when demand was high,” he said. “It could last a month, it could last a year, it could last 18 months.”
He added that the current market environment is different because reduced capacity could create a more lasting impact.
LTL growth creates operational pressure
TFI’s LTL segment experienced volume growth during the quarter, with shipments increasing 7.5% year over year. However, revenue per shipment declined by 2%.
Bédard said the increase in volume created additional operational challenges, including higher costs and service pressure.
“We incurred way too many costs in our second-quarter operation because of this huge surge in volume,” he said. “But our service suffered also.”
To improve profitability, TFI is using technology to refine its LTL pricing strategy.
Saperstein explained that the company is analyzing large amounts of operational data to identify underperforming freight and lanes. These tools allow pricing teams to make faster and more targeted adjustments.
“We’re able to isolate the problematic lanes, the problematic freight, and then use that information to help our pricing team move faster,” he said.
Daseke acquisition continues to influence Truckload performance
TFI also highlighted the impact of its 2024 acquisition of flatbed carrier Daseke on its Truckload operations.
The company benefited from a 5.6% year-over-year decline in depreciation expenses for property and equipment, with much of the improvement linked to Truckload operations.
Bédard previously noted that Daseke had invested heavily in equipment before the acquisition, creating higher capital costs.
“We bought Daseke in ’24 and we were stuck with its capex,” Bédard said. “These guys liked to buy trucks and trailers. So we had too much capex in ’24.”
TFI has since adjusted its fleet size to better match market demand. At the end of the second quarter, the company operated 11,987 trucks and 39,710 trailers, compared with 13,511 trucks and 42,796 trailers a year earlier.
The company’s flatbed operations have also benefited from demand linked to wind turbine projects and data center construction. Bédard highlighted Lone Star Transportation, a TFI subsidiary, as particularly well positioned in these markets.
Positive outlook for Truckload and Logistics
TFI expects the improvement in Truckload performance to continue throughout 2026. Bédard said the company anticipates a 500- to 600-basis-point improvement in Truckload operating ratio for the full year.
The Logistics segment is expected to improve by 250 to 350 basis points, while LTL performance is expected to remain relatively stable.
“The world of Truckload has changed tremendously over the last six to nine months,” Bédard said, pointing to measures taken in the U.S. that have contributed to reducing capacity.
By comparison, he described both the U.S. and Canadian LTL markets as still weak.
“There’s no big revolution in demand there, so this is why we’re conservative,” Bédard said. “We don’t see a lot of major improvement compared with what we can see in the Truckload or Logistics sectors.”
Saperstein added that LTL margins are expected to remain flat because the company currently has too much volume without enough pricing power.
Strong cash flow supports balance sheet
TFI also reported continued financial strength, generating approximately $200 million in free cash flow during the quarter, compared with about $186 million a year earlier.
The company used this performance to reduce its debt-to-EBITDA ratio to 2.4x, down from 2.5x at the beginning of the year.
TFI does not have publicly traded debt. The company’s leverage level remains comparable to figures previously discussed by industry competitor XPO, whose debt ratio was around 2.5x when its credit rating was downgraded by S&P Global Ratings.
Looking ahead, Bédard expects third-quarter earnings per share to reach between $1.70 and $1.80, compared with $1.65 in the second quarter.
