TFI International, Canada's largest trucking company, is experiencing negative impacts due to the US trade war. Reduced freight volumes, particularly in the specialized truckload unit, are attributed to uncertainty among industrial clients, who are delaying purchases awaiting resolution of the trade conflict.
The uncertainty stemming from the trade war is impacting various sectors. For example, US farmers are hesitant to invest in new equipment due to uncertainty about export markets, leading to decreased orders from agricultural equipment manufacturers and less business for TFI.
The trade war's uncertainty has caused TFI to cancel a major acquisition deal. While the company plans future acquisitions, the current climate is deemed too uncertain for significant mergers and acquisitions.
While US-bound truckload volumes remain stable, there is a significant decrease in goods returning to Canada, impacting the profitability of the backhaul. Aluminum shipments are strong, however Canadian steel shipments have been dampened by US tariffs.
TFI reported first-quarter results below analyst estimates, although free cash flow showed an increase. Management declined to provide full-year guidance but projected a profit per share for the second quarter.
Despite the challenges, TFI shares saw an 8% increase on the Toronto Stock Exchange following the report.