Dive Brief:
- Almost a year after Yellow Corp.’s bankruptcy sent shippers scrambling to competitors, TForce Freight’s volumes are “back to square one,” TFI International Chairman, President and CEO Alain Bédard said on an Q2 earnings call last week.
- The lack of volume growth means the Canada-based company’s U.S. LTL carrier is “way too fat,” Bédard said, emphasizing a focus on cutting administrative, technology and other costs.
- “Our focus at TForce Freight is really, really to be more lean and mean,” Bédard said. Although the carrier is still upgrading its linehaul and billing technology, Bédard called its IT costs “way too high.”
Dive Insight:
While volumes have receded since last summer, Bédard described shipment counts as steady, noting he doesn’t expect the freight market to provide much help the rest of the year.
TFI’s overall LTL operating income increased 2% year over year in Q2, the company reported.
Swollen technology costs aren’t limited to TForce Freight. Bédard said TFI aims to halve the IT spend at Daseke, which the company finished acquiring in April. It cut Daseke’s head office salaries by $12 million.
“If you look at what we've done so far with Daseke on the truckload side,” the CEO said, “we're attacking costs like there's no tomorrow.”
Technology is also part of the company’s cost-reduction solution, though. TFI has provided TForce Freight terminal managers with cost-tracking tools their Canadian counterparts use to react more quickly to swings in demand.
“We are improving service,” Bédard said. “At the same time, we are reducing costs, but not enough. ... A lot of our reduced cost has to come from admin, OK? Our admin cost is too high, but that's got nothing to do with the operation.”
