Uncertainty over the outcome of the political contest this fall means some customers are holding off on shipments until the result becomes clear, Alain Bédard, chairman and CEO of
On a conference call with analysts, Bédard gave the example of a green energy company spun off from
"If it's candidate one, he's against windmills, so that business is going to fall. If you take the No. 2 guy, well he likes windmills, he's more green. So that's why we have these kinds of customers just sitting on the fence not knowing where the ball is going to drop — left or right,” Bédard said.
“We still anticipate this freight recession will not change probably before ’25. We have an election year in the
A tough trucking environment in general has also hurt transport companies, the chief executive said, resulting in a seven per cent year-over-year drop in adjusted earnings per share in TFI's first quarter, below analysts' expectations.
"Why is that? Because the truckload in Q1 was just a disaster," he said. “It's a very, very difficult market right now.”
Bédard was referring to the "truckload" segment of the business that carries full loads to a client, as opposed to "less-than-truckload" deliveries that make multiple drops of cargo for different clients on a single run.
Employment in trucking and logistics fell by about 38,000 jobs between 2021 and the end of last year, according to industry non-profit Trucking HR Canada.
Bédard said rampant undercutting of labour laws by some trucking outfits has harmed TFI to the point where he is mulling a sale of one of its components.
Asked by an analyst whether he would dispose of its ailing Canadian truckload division, Bédard replied: "We're asking ourselves that question."
Bédard called the phenomenon known as
“Our Canadian business will shrink, absolutely, because of
The mislabelling of contractors who drive for only one company and do not own their trucks or control their own schedules is illegal — and risky, since workers do not receive basic entitlements such as workers' compensation, paid sick leave, overtime or severance.
"They don't pay any benefits to their drivers. That is really killing us," Bédard said.
He added that he believes provincial and federal leaders will crack down on scofflaws, but noted the problem has persisted despite years of warning calls from the industry.
In the federal budget this month, the government reiterated its pledge from a year earlier to amend the Canada Labour Code to bolster job protections for federally regulated gig workers. The effort would strengthen bans on employee misclassification, according to the
Other challenges lie ahead for TFI, including the integration of
TFI closed its purchase of the
“It’s not a disaster. It’s not UPS Freight, where these guys were losing money," Bédard said of an acquisition from 2021. But he criticized Daseke's former head office: "Those guys were costing a fortune and the results were not there."
Last year, TFI snapped up
Despite its acquisitions — six in the past 12 months — net income fell 17 per cent year-over-year to
This report by The Canadian Press was first published
Companies in this story: (TSX:TFII)
© 2024 The Canadian Press. All rights reserved., source