TFI Buys Hercules Forwarding to Boost US LTL Operations

Reboot of US LTL Unit a Key TFI Focus in 2024 Ahead of 2025 Split
Hercules Freight
(Hercules Freight)

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TFI International is to buy less-than-truckload carrier Hercules Forwarding Inc. for an undisclosed sum, it said.

The acquisition, announced late March 11, is Montreal-based TFI’s first since the blockbuster Christmas purchase of flatbed specialist Daseke Inc.

TFI made 12 acquisitions in 2023.

An LTL carrier with an emphasis on intra-U.S. and U.S.-to-Canada cross-border transportation, Hercules is set to be part of the process of turning around TFI’s U.S. LTL operations, a key focus for the company in 2024, particularly as the company prepares to spin off its truckload unit.

Hercules was founded in 1985 and its U.S. headquarters is in Vernon, Calif., and Canadian headquarters in New Westminster, British Columbia. The company operates 31 terminals and has 210 trucks, close to 600 trailers and about 75 containers. In 2023, revenue totaled in excess of $100 million.

The company’s focus is direct shipper customers across end markets including consumer/retail; heating, ventilation and air conditioning/building products; automotive; industrial; third-party logistics and food/beverage, TFI said.

TFI ranks No. 6 on the Transport Topics list of the largest LTL carriers in North America, and No. 4 on the TT100 list of the largest for-hire companies.

“This bolt-on acquisition fortifies our U.S. LTL portfolio while adding cross-border LTL into Canada, creating a partner for our Canada-to-U.S. shipments while offering synergy opportunities on both sides of the border,” said TFI CEO Alain Bédard.


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“Hercules’ impressively low claims ratio and skill at serving multiple premium freight markets moving high-value cargo across the U.S. and Canada aligns well with our focus and operating philosophy,” he added.

TFI has been growing its U.S. LTL operations since purchasing what became TForce Freight from UPS Inc. in 2021 for $800 million.

A couple of the 2023 acquisitions were LTL companies — Siemens Transportation Group and Hot Line Freight Systems — and the LTL division contributed 43% of TFI’s revenue in the fourth quarter of 2023.

Investors responded favorably to the Hercules deal, which was announced after the market closed March 11. TFI’s share price rose 1.46% in the first couple of hours of trading March 12, above the gains seen by benchmark indexes.

TFI’s final deal of 2023 — Daseke — was the biggest of the purchases. It came with 4,900 tractors and 11,000 flatbed and specialized trailers.

TFI’s focus in 2024 is closing the $1 billion purchase of Daseke and turning around the company’s U.S. LTL operations, Bédard told analysts Feb. 9 when reporting TFI’s fourth-quarter and full-year 2023 earnings.

Part of the reason for the focus on turning around the U.S. LTL operation — which has a much lower operating ratio than its Canadian counterpart — is the pending division into two publicly traded entities, which likely will take place in 2025.

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TFI’s U.S. LTL business posted an operating ratio of 91 in Q4, compared with 90.4 in the same period a year earlier. In contrast, the company’s Canadian LTL unit posted an operating ratio of 79.9 in the most recent three-month period.

Operating ratio provides insight on how well a company is balancing its costs and revenue generation. The lower the ratio, the better a company’s performance.

When the split takes place, TFI’s truckload operations will be separated from a combined less-than-truckload, package and courier and logistics business, Bédard said Feb. 9 as he filled analysts in on the prospects for the units. The split will not take place in 2024, he said.