The head of Canada害羞草研究所檚 biggest trucking firm says the upcoming U.S. election is straining an already weak market for freight.
Uncertainty over the outcome of the political contest this fall means some customers are holding off on shipments until the result becomes clear, Alain B茅dard, chairman and CEO of TFI International Inc., said Friday.
On a conference call with analysts, B茅dard gave the example of a green energy company spun off from General Electric, claiming GE Vernova害羞草研究所檚 wind turbine business could suffer depending on who wins after ballots are cast on Nov. 5.
害羞草研究所淚f it害羞草研究所檚 candidate one, he害羞草研究所檚 against windmills, so that business is going to fall. If you take the No. 2 guy, well he likes windmills, he害羞草研究所檚 more green. So that害羞草研究所檚 why we have these kinds of customers just sitting on the fence not knowing where the ball is going to drop 害羞草研究所� left or right,害羞草研究所� B茅dard said.
害羞草研究所淲e still anticipate this freight recession will not change probably before 害羞草研究所�25. We have an election year in the U.S. A lot of our customers are just waiting to see what害羞草研究所檚 going to happen.害羞草研究所�
GE Vernova did not respond to a request for comment.
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害羞草研究所檚 first quarter, below analysts害羞草研究所� expectations.
害羞草研究所淲hy is that? Because the truckload in Q1 was just a disaster,害羞草研究所� he said. 害羞草研究所淚t害羞草研究所檚 a very, very difficult market right now.害羞草研究所�
B茅dard was referring to the 害羞草研究所渢ruckload害羞草研究所� segment of the business that carries full loads to a client, as opposed to 害羞草研究所渓ess-than-truckload害羞草研究所� 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.
The Conference Board of Canada has said household debt will hamper consumer spending this year, as Canadians害羞草研究所� penchant for online purchases continues to taper off from pandemic highs, leaving shippers in the lurch.
B茅dard 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, B茅dard replied: 害羞草研究所淲e害羞草研究所檙e asking ourselves that question.害羞草研究所�
B茅dard called the phenomenon known as Driver Inc. a 害羞草研究所渃ancer害羞草研究所� for legitimate trucking companies as rule-breaking rivals gain a competitive advantage.
Driver Inc. refers to the misclassification of workers as self-employed, which means the company does not provide benefits or basic labour protections.
害羞草研究所淥ur Canadian business will shrink, absolutely, because of Driver Inc.,害羞草研究所� he said. 害羞草研究所淧eople will lose jobs 害羞草研究所� good-paying jobs 害羞草研究所� at TFI because of that Driver Inc. unfair competition.害羞草研究所�
The mislabelling of contractors who drive for only one company and do not own their trucks or control their own schedules is illegal 害羞草研究所� and risky, since workers do not receive basic entitlements such as workers害羞草研究所� compensation, paid sick leave, overtime or severance.
害羞草研究所淭hey don害羞草研究所檛 pay any benefits to their drivers. That is really killing us,害羞草研究所� B茅dard 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 Canada Revenue Agency.
Other challenges lie ahead for TFI, including the integration of Daseke Inc.
TFI closed its purchase of the Texas-based flatbed trucking company for about $1.1 billion earlier this month in a move that bolsters its fleet of 11,000-plus trucks by more than 40 per cent.
害羞草研究所淚t害羞草研究所檚 not a disaster. It害羞草研究所檚 not UPS Freight, where these guys were losing money,害羞草研究所� B茅dard said of an acquisition from 2021. But he criticized Daseke害羞草研究所檚 former head office: 害羞草研究所淭hose guys were costing a fortune and the results were not there.害羞草研究所�
Last year, TFI snapped up JHT Holdings in August. The addition drove up revenue in TFI害羞草研究所檚 logistics segment by 24 per cent year-over-year 害羞草研究所� the only one to see an increase last quarter.
Despite its acquisitions 害羞草研究所� six in the past 12 months 害羞草研究所� net income fell 17 per cent year-over-year to $92.8 million in the quarter ended March 31. Revenue nudged up one per cent to $1.87 billion.
Christopher Reynolds, The Canadian Press
