TFI International announced earlier in the year that it was acquiring UPS Freight in an $800 million deal. About 90% of the acquired business will operate under TFI’s LTL business under a new name: TForce Freight.
The acquisition gives TFI International access to one of the largest LTL networks in North America.
What You Need to Know About the TFI International UPS Freight Merger
TForce now operates as a subsidiary of TFI International. The transition to TForce Freight will be seamless. UPS’ employees and assets will transition and continue to serve customers of TFI International.
UPS is still responsible for any taxes, pension obligations and workers’ compensation claims and costs before the acquisition.
TForce will continue handling UPS’ LTL distribution, and UPS will continue providing freight volumes and services for five years.
The new company will offer a diverse range of services, which includes:
- Standard LTL
- Dedicated
- Expedited
- Trade show services
Additionally, TForce will offer cross-border and international LTL in:
- Alaska
- Canada
- Mexico
- Puerto Rico
- U.S. Virgin Islands
- Hawaii
- Guam
The company will continue offering UPS Ground with Freight Pricing, which offers savings through the UPS Package network. In addition, for a limited period, TForce Freight will continue using UPS technology for shipping, rating and other purposes.
The deal was overseen by Morgan Stanley & Co. LLC. RBC Capital Markets served as financial advisors Shudder Law Firm served as legal advisor to TFI.
What’s Next for TForce?
To start integrating UPS Freight into its fleet, TFI International upgraded UPS Freight’s equipment. Equipment upgrades benefit drivers, but they also reduce repair and maintenance costs while improving safety.
TFI is also focusing on reducing the number of cargo claims. Currently, that figure is at about 1%, which TFI’s CEO feels is too high. The goal is to cut that number in half.
To meet margin goals, the company is eliminating unprofitable freight and implementing strategies to make its new terminal network more profitable.
In the future, TFI International may look to leasing space on the dock and in the yar south of the border.
TFI International made more than a dozen acquisitions in 2020, but the purchase of UPS Freight has garnered the most attention. The company has no plans to make other major acquisitions in 2021 or 2022. Instead, their primary focus will be to build TForce Freight to a profitable level.
On July 13, TFI International announced that TForce Freight, during the second quarter, would be projected to report an adjusted operating ratio of below 95%. That would have beaten expectations of a 96-97% adjusted operating ratio.
But the actual results of the second quarter, released on July 26, were even more impressive. TForce Freight managed to achieve an adjusted operating ratio of 90.1 after just two months of operation under TFI.
TFI International has been working hard to implement the goals mentioned previously. In addition, they have been aggressive at removing low-performing freight, which has improved the profitability of TForce Freight significantly.
TForce Freight Services
According to the TForce Freight website, the company offers the following products:
- TForce Freight LTL Guaranteed: Guaranteed delivery on a specific date
- TForce Freight LTL: Standard LTL service, with long-haul, regional and interregional service
- TForce Freight LTL Guaranteed AM: Noon delivery – guaranteed (only in select zip codes)
- TForce Freight LTL Expedited: Guaranteed delivery for a specific time and location
Currently, TForce Freight has more than 39,000 two-day and one-day lanes. Advanced technology is allowing customers to track and process LTL shipments, reconcile billing and manage their shipments.
TForce Freight has more than 22,000 trailers, 6,700 tractors and over 200 facilities in North America.
The acquisition of TForce Freight will drive TFI International forward as a leader in transportation and logistics in North America. The improved performance of TForce Freight in just the first few months of operation is evidence that TFI has the right strategies in place.