Good day, ladies and gentlemen. Thank you for standing by. Welcome to TFI International second quarter 2026 earnings call. At this time, all participant lines are in listen only mode. Following the presentation, we will conduct a question- and- answer session. Callers will be limited to one question and one follow-up. Again, that's one question and one follow-up so that we can get to as many callers as possible. Further instructions for entering the queue will be provided at that time. Please be advised that this conference call may contain statements that are forward-looking in nature and are subject to a number of risks and uncertainties that could cause actual results to differ materially. I would also like to remind everyone that this conference call is being recorded on July 27, 2026. Joining us on the call today are Alain Bédard, Chairman, President, and Chief Executive Officer, and David Saperstein, Chief Financial Officer. I would now like to turn the conference over to Mr. Alain Bédard. Thank you. Please go ahead. Thank you, operator, and welcome everyone to our call this afternoon. Within the past hour, TFI International reported stronger than expected quarterly results with adjusted diluted EPS of CAD 1.85, exceeding our clip range of CAD 1.50-CAD 1.60 and up 38% year-over-year. All three of our business segments grew operating income by double digits, and we again produced solid free cash flow, which, as you know, is a longstanding priority of ours. Put simply, the investment we made during the recent slowdown, both in internal operation and strategic M&A, are beginning to benefit our performance. We now have a balanced and diverse portfolio of operating companies in attractive end markets, which we continue to serve while always maintaining our focus on efficiency and related operating principles. There is no better than the hardworking people of TFI to execute on our plan and capitalize on the resulting opportunities. The foundational support for TFI International's thoughtful approach to value creation, both cycle in and cycle out, begins with our strong balance sheet, which improved further during the quarter. We generated more than CAD 200 million of free cash flow, further supporting our ability to strategically allocate capital and, very importantly, return excess capital to shareholders whenever possible, including close to CAD 40 million in quarterly dividend paid during the quarter. Let's take a high-level look at our second quarter financial results. Starting with the top line, our total revenue before fuel surcharge of CAD 1.9 billion was up 6% over the past year, while operating income climbed nearly 30% to CAD 220 million. That reflects a margin of 11.6, which was up more than 200 basis points relative to the 9.5 figure a year earlier. On a consolidated basis, our net cash from operating activity rose to CAD 256 million from CAD 247 million. Let's dig deeper into each of our three segments, starting with LTL, which was 38% of our segmented revenue before fuel surcharge. We generated CAD 725 million of LTL revenue before fuel surcharge, up 3% year-over-year. Our LTL adjusted operating ratio was 88.5%, and operating income of CAD 86 million was up a very solid 17%, producing a return on invested capital of 12%. Let's move to our truck, for which revenue before fuel surcharge came in at CAD 761 million, up 7% the past year and now representing 40% of our segmented total. Revenue per truck per week, excluding fuel surcharge, rose 13% year-over-year. We increased our brokerage revenue by 34% in addition to this. Our operating income of CAD 106 million was up a very robust 50% from the prior year quarter, and our adjusted OR of 86.1 improved by 400 basis points. Our return on invested capital for the truckload was 6.9. Stepping back, as capacity has come out of the truckload sector, we've worked to reduce our own capital intensity and right-size equipment level, creating significant operating leverage. We've also focused on optimizing our business mix and end market exposure, which now includes an attractive mix of flatbed and specialized expertise. Rounding out our segment discussion, logistics revenue before fuel surcharge was up 10% year-over-year to CAD 432 million, accounting now for 23% of the segmented total. Operating income expanded a full 32% to CAD 50 million, reflecting an 11.5 margin, which was up nearly 2 percentage points versus the second quarter of 2025, and our return on invested capital was 13.3. Before opening up for Q&A, let me discuss our balance sheet and provide our updated outlook. As I mentioned, we generated just over CAD 200 million in free cash flow during the second quarter of the year and ended June with a funded debt-to-EBITDA ratio of 2.4, which has improved from 2.5 at the start of the year. Lastly, looking ahead for the third quarter results, we expect adjusted EPS of CAD 1.70-CAD 1.80, which would represent a 50% year-over-year increase at the high end. We also expect year-over-year adjusted operating ratio improvement of 500 - 600 basis point in the truckload segment, 250 - 350 basis point in the logistics segment, and a comparable operating ratio in the LTL segment. For the full year, we continue to expect net CapEx, excluding real estate, in the range of CAD 225 million-CAD 250 million, unchanged from previous expectations. I'll mention, as I do each quarter, that our outlook range assume no significant change, either positive or negative, in the operating environment. Now, operator, if you could please open the line. Both David and myself would be happy to take questions. Thank you. Ladies and gentlemen, we will now begin the question- and- answer session. If you have a question, please press star followed by the one on your telephone keypad. You will hear a prompt that your hand has been raised, and should you wish to cancel your request, please press star followed by the two. I would like to advise everyone to have a limit of one question and one follow-up. If you're using a speakerphone, please lift the handset before pressing any keys. One moment please for your first question. Your first question comes from the line of Scott Group from Wolfe Research. Please go ahead. Hey, thanks. Afternoon, Alain. Good afternoon. I wanted to start on the LTL business. I'm not sure if I heard right. Are you saying sort of a flattish year-over-year margin in LTL? If that's right, maybe just talk through what you guys are seeing from a demand standpoint, a service capacity standpoint, and maybe a pricing standpoint. I think, Scott, that the world of truckload has changed tremendously over the last six to nine months. With what the administration has done in the U.S., with all these things that they've done to help us with reducing the supply. That's really the truckload. I still find that the LTL market in the U.S., and the same in Canada as well, it's still very soft. There's no big revolution in the demand there. This is why we're saying that, yes, we're conservative, but we want to say that LTL, we don't see a lot of major improvement versus what we could see on the truckload sector or on the logistics sector. Maybe just to follow up there, I guess you're not seeing spill from truckload into LTL. It doesn't sound like you're seeing that. On the truckload side, you're saying pretty meaningful improvement. Maybe just talk about the pricing that you're seeing right now on the truckload business and any sort of differences between the flatbed and some of the other parts. That's a very good question, Scott, and I'll ask David to talk about that. For sure, what we see on the pricing side of the truckload is very impressive. The way we see it is that it's mostly because of the supply constraint, not because the demand is just going through the roof. It's just the supply. Right, David? Maybe you could add to that. Absolutely. Because what we're seeing on the LTL, the reason that the margins are expected to be flat is because we have too much volume and not enough price. That's what we're working on fixing. That's a specific thing. I don't know if that really could be extrapolated to the market or not. It's related to us. Of all of the issues to have, it's probably the one that it's clear what to do and we know that we just need to raise the price, and we're working on that. On truckload, the dynamics are really good. Actually we saw the pricing or the revenue per truck accelerate throughout the quarter. In April, we were at 11.1% revenue per truck per week year-over-year growth. That increased to 13.3% in May, and it was 14.4% in June. The dynamics there are strong. The LTL issue that we have, let's see, I mean, the shipment count was up 7.5% in the quarter in LTL. It's just that the revenue per shipment before fuel was down 2%. Yeah. You know what, Scott? We're very proud of what our truckload guys have been able to accomplish with If you just look back at our Q1 OR in our truckload, we were above 90. Yeah. Right? We were, I think, a 93 OR in our truckload, and now we're down to an 86.1, okay. I think that this is quite an accomplishment. Okay. The investment that we made two years ago in the U.S. specialized truckload is just starting to pay off. Yeah. Exactly, because you see that in the depreciation. We talked about this a couple of quarters ago. Well, the depreciation is down double digits now, and the revenue is up. We're saving a fortune on equipment costs, and the brokerage revenue is up 35% year-over-year. This goes back to the saying, do more with less instead of doing less with more. Yeah. Thanks. Thank you, guys. Thanks, Scott. Thank you. Your next question comes from the line of Ravi Shanker from Morgan Stanley. Please go ahead. Great. Thanks. Afternoon, Alain and David. Maybe if I can just follow up to your last response on LTL, where you said, obviously, you have too much volume and not enough price. David, do you think that's something you can reset in one cycle, or is it a multi-cycle process to get the price where you want it? Also, if it is multi-cycle, if you can give a sense of how much you can do this cycle versus the next, etcetera? Yeah. You know what, Ravi? The issue we have with pricing is in wins in one sector per se, right? SMB, no. Corporate, no. The biggest culprit where we probably made a mistake is 3PL, and it's mostly on our blanket thing there, where we got inundated with volume, okay? Because probably we were the cheapest guy in the country, right? This is what now our commercial team is working on fixing, okay? Because this is like a no-no, right? It's not all over a TForce Freight, okay? SMB and corporate, not an issue. Blanket 3PL has been overwhelmed with volume and with pricing that probably does not reflect the market. Maybe we were not aware of where the market was going, and now we have to react to that. That's what David was saying, that in all the problems that we can have, it's probably the one that could be fixed now. Does that take three quarters? I don't think so. Our guys, we know what the issue is. We know that the market is still soft, to a sense. We're very cheap right now with our rates in some sectors. We're going to be fixing that now. We're fixing that now as we speak. Understood. Maybe as a quick follow-up, are you getting any more confidence in the cycle to maybe restore a full-year guide? Yeah. To restore a full-year guide. Look, I hope that at some point we'll restore a full-year guide. Absolutely. We are starting to get confidence in this truckload cycle, that's for sure. The fact that it's so supply driven, and therefore has some staying power, is giving us a lot of confidence. I think that the delta is going to come from getting the LTL to produce to its full potential. We're sub 90 this quarter, right? We could be a lot more sub 90 if we fix this pricing. By the way, when we do that, we won't have all the excess cost that we had this quarter. This quarter, we were dealing with a lot of excess costs related to the surge in volume, which is not necessarily an ongoing thing. We'll see. We hope that we come back to a full year guidance soon. Very good. Thank you both. Thank you. Your next question comes from the line of Jordan Alliger from Goldman Sachs. Please go ahead. Yeah. Hi, afternoon. Just sort of curious, coming back to LTL quickly. With the pricing actions that you guys are working on, would you expect that to sort of come down a little bit as you sort of work to repair the price? Then on the flatbed side specifically, are there pockets? I know the discussion has been supply tightness, but I'm just curious, are there pockets where demand on flatbed is looking better? I know you're not giving a full year guide per se, but just because I'm perhaps not as familiar, is there a way to think about seasonality in the truckload/flatbed business 3Q to 4Q? Thank you. Yeah. When you think about the flatbed thing there, Jordan, okay, we are highly involved in wind, and wind is growing, okay? We're also highly involved in data center and everything that is industrial. What we've been able, Steve, our Senior EVP, has been able to do with our flatbed operation is to create within the old Daseke organization, some niche carriers. I'll give you an example of what Steve and his team have done with one of our carriers that's called SPD on the West Coast, where these guys were running 200 trucks and the old saying, jack of all trades, master of none. These guys are a niche carrier for the aerospace business. With Boeing and with Bombardier and with others, okay, we see some growth there. I'm sure you're familiar with Boeing. Those guys, they're quite busy. We're piggybacked on Boeing. Now, we made a niche carrier of SPD. These are sectors like the aerospace, the wind, the data center, okay, that we see a lot of opportunities. Steel, too. Okay, our TSH group, which specialize in steel, okay, those guys they're up, revenue-wise, I would say 20%-25% year-over-year. Okay, steel is we're very busy with that. A lot of steel probably goes into the data center or I don't know where it's going, but we're really very busy with that. On the other side, if you think about drywall, okay, we're a significant player in that business. Drywall is maybe not the best business you want to be in right now because not a lot of people are building homes, right? It's kind of a mix, but, I mean, what our team has been able to do, okay, is kind of having within the specialty truckload, our business unit being more specialized in their world, okay? Instead of, if I take the other example of Lone Star, which is something that's happening now out of Texas. I mean, those guys are good with wind, they're good with data center, they're good at moving everything that nobody wants to move because it's too big or it's too heavy, okay? We said, you know what? The over-the-road operation within Daseke, that doesn't fit you. What we'll do, we'll move that to those specialists within TFI, okay, our truckload division, Wylie, okay? Wylie is the king of the over-the-road for us. Right? This is what's happening on the truckload side. The first part of your question was, David, I don't remember exactly. Yeah, can you repeat the first part? Yeah. Oh, yeah. Well, I was just curious on the less-than-truckload side, given the price actions, repair actions you're taking- Oh, yeah. volume is strong. I was just curious how that might look from here a little bit. Yeah. For sure. Volume is going to come down a bit because, as you know, the minute you start to get back to closer to market, okay, if we get too close to market, because we still have to improve our service. I mean, the guys are working on that, but like David was saying, we incur way too many costs in our Q2 operations because of this huge surge in volume, but also our service suffered, right? Now it's very clear what the mandate is for Cal and his team, and we'll get there. For sure, I mean, we'll have to drop a few shipments to get there. Got it. Thank you. Your next question comes from the line of Ken Hoexter from Bank of America. Please go ahead. Hey, great. Good afternoon. Alain, can you talk maybe a little bit about the truckload pricing? Are you touching at all right now, given the improvement is just maybe given the mix of how much is contract, how much takes time? Just want to see where you are in the marketplace and able to reprice that. Yeah. On that, David, I mean, I think that we're not a big player on the spot market. No. Okay. I don't remember exactly the split between contract and spot. On the U.S. side, it's about 25% spot. 25% spot. Yeah. For sure, I mean, you know how the shippers are. I mean, the market is going down. Contract or no contract, they will sit down and try to bring prices down, right? The market is going up right now. Yes, we have agreement, but we have to sit down with customers because at the same time that the market is moving up and our contract is too far away from the market, then we have to sit down. We did that. We did that. I mean, we did that with some major customers, and they understand. I mean, now it's a different situation. We're not in the business of hauling freight just for the pleasure of hauling freight. We're in business to service customers so that our shareholders make money, right? Yeah. I really want to stress that you have two things going on in our truckload. One, we're exposed to the right-end market, yes. Two, the market's turning because of the supply, yes. The last thing, and this is unique to us, is that we've dropped our depreciation by CAD 12.5 million in this quarter alone, and yet the organic revenue is higher than it was last year. We're truly getting an enormous benefit to the bottom line as a result of that. That's really specific to the work that the team has done over the past year, making sure that our trucks are being deployed in the right places. Trucks that are not being deployed, we move them, and then we broker out what we don't want to do ourselves. That's it. Ken, don't forget, we bought Daseke in 2024. In 2024, we were stuck with the Daseke CapEx, like these guys like to buy trucks and trailers. We had way too much CapEx in 2024. We get to 2025, it's too early in the game, so we still bought too much equipment in 2025 versus what the market, okay, could bear. Now, after a year and a half of experience with Steve and the team, now we are adjusting our asset base to the business that we want, the business that's highly profitable. That's why we're in 86 OR, right? We're saying, you know what? Those customers, maybe we could broker the freight to some good carriers that want to work for us. Great. Thanks for that. If I can get a follow-up on capacity on both sides, maybe talk a little bit about how much capacity you have utilization on miles per tractor, and then in the LTL with shipments up 8%, talk about what excess capacity you have now. You've changed your management there with Cal. Are you focused more on culling that 3PL business, more on price? How do we think about usage of that capacity as we move forward? Thanks. Yeah. On the first one, I'll answer that. We report revenue per truck, not miles per truck. The reason for that is that some of our business we build by the mile, but some of the specialized is billed like by the day, for example. It's not so much by the move, so it's not so much of a mileage, I think. Revenue per tractor is what we report, and that's up 13%. As I mentioned earlier, it was increasing as the quarter went on. We exited the quarter around 14.5. In terms of capacity, we're at capacity. We have to reduce our volume in the LTL because it went up so quickly that we had to spend money in ways that we wouldn't normally spend money. Lots of overtime, lots of third-party carriers to help us out in a pinch. All of these things that you do when your volume increases 10%, 12%, 13% overnight. If you ask us where we are on capacity, well, we don't have any capacity. We're raising price on the brokers in order to bring down that rate of growth. Great. Thank you very much. Appreciate it. Thank you. Your next question comes on the line of Walter Spracklin from RBC Capital Markets. Please go ahead. Yeah. Thanks very much. Good afternoon, David. Good afternoon, Alain. I'd like to start on pricing, more in a more conceptual, longer term kind of way to look at it. I'm just curious, when you look at the drivers of pricing, you mentioned supply driven by whether it's the non-domiciled ELD or CDLs or the English language proficiency or even the Montgomery ruling. These things seem like it's not like in past cycles where it's something that can be easily or quickly reversed. I know, Alain, you've been in this business a long time. Looking back at previous cycles where pricing has come up, do you feel like this has more stickiness? Can the pricing here hold for longer given the type of drivers that have caused that pricing to go higher, and can it be sustainable? You're absolutely right, Walter. In a normal trucking environment, guys used to make a lot of money when the demand was high. Demand high doesn't last. It could last a month, could last a year, could last 18 months, then you got too many trucks because now the demand is falling. What I like about this, which I've never seen before in 30 years being a trucker, is now it's the supply, right? I was just reading about what the administration wants to do in the U.S. is that they have a particular group of drivers that they're saying now, we had the CDL, the illegals, the English proficiency, like you just said, they're also focusing on another group of drivers that, according to the U.S. administration, are dangerous, are not safe, et cetera. To me, on the U.S. side, I think that this move that we're seeing now on the truckload sector, which is not the same with LTL or P&C. For truckload, I think that this is more of a permanent thing than we've ever seen before. This is why, Walter, it's a reflection of what our guys have been able to do in this market, even if the demand is not crazy in the truckload, specialized truckload sector. Those guys were smart enough to take advantage of the situation that we're going through right now, and that's why from a 93 OR, which was really bad in Q1, now we're down to an 86 OR. We just said in our presentation that we believe that our Q3, year-over-year, we're going to see, again, another major improvement in our truckload sector. Some also in our logistics, not so much in our LTL for now, because like David is saying, we have to attack some issues that we have in the U.S. right now, U.S. LTL, and the guys will do a job. I think that it's way more permanent, the situation that you were describing, Walter, than ever before, and this is typical of the U.S. market. On the Canadian side, we have a little bit of that, not so much because, as you know, the Canadian government now is asking the truckers, the employers of owner ops or whatever, to issue a T4A. Now these illegal guys in Canada now have a T4A, they have to report that as revenue, and now they have to pay tax. That's all. We're starting to see some major improvement on the Canadian side because the Driver Inc. fiasco is starting to become less. It's still there, it's not as bad as it used to be. Yeah. The only thing I would add to that is that the brokers are now very careful about wanting to broker loads to well-capitalized, serious carriers that are serious about safety, and that are spending the money on that. The whole industry is being cleaned up in a way that's going to result in better safety and for sure, normal rules being followed. Yeah. No more cheating. Fantastic. There you go. Looking at your capital plan for this year, I know you're not seeing any significant changes in growth, you mentioned on the sub-segment area where you have exposure, you are seeing growth. Is that causing you at all to revisit your capital plan? I think you had us at CAD 225 million-CAD 250 million for the year of net CapEx. Is that still the plan, or are there opportunities for you now to invest to take advantage of some of those sub-sectors? Yeah. So far, we're still in that range, Walter. For sure, we're seeing a lot of discussion with customers. Okay. The other thing also I'd like to point out, Walter, is that now what Steve has done is now we have a Chief Commercial Officer for our U.S. truckload operation. Mr. Hoppe, Scott Hoppe, is our Chief Commercial, which is going to be a big thing for us because if you look at the way Daseke was run, it was like a nine sales team and nine of everything. Now we are consolidating a lot of that, and commercial side is under Scott Hoppe, and Scott has got a tremendous experience, okay, in the U.S. He's lived all his life into that world, right? That's going to help us. That is for sure, having a one commercial team under Scott. We're already seeing the benefit when we talk to our customers. Okay. Appreciate the time as always. Thank you. Walter, it's a pleasure. Thank you. Your next question comes from the line of Brian Ossenbeck from JP Morgan. Please go ahead. Hey, good afternoon. Thanks for taking the questions. Maybe just wanted to understand a little bit better if you can make some changes or have made changes to the LTL commercial team or maybe how it ties in together with operations, because I would think that at least with the blanket pricing on 3PLs, you can adjust that relatively quick and not the o nly network you've heard that got a little bit flooded, maybe just some thoughts on what could be done differently or changes you've already made for the next time. Yeah. Right. It's the mistake that we encounter, Brian, is that focus was, hey, guys, we need to grow organically. We got overwhelmed because our pricing was too low, right? We fixed that. One thing I could tell you is that we are implementing a pricing software, the one that most of our peers are using. We are getting rid of the old UPS freight pricing. We've also, through our finance team now, getting our finance team involved through AI, okay, to help those guys make the right decision by lane, by customers, et cetera. Maybe David, you could give a little bit more details on that. Yeah, absolutely. It's very interesting. We now have tools where we're taking spreadsheets which have an entire month of shipments. These spreadsheets have about 500,000 lines and tons of columns, tons of data, and we're able to really isolate very specifically the problematic lanes, very specifically the problematic freight, the terminals, the customers, and then we're using that to help our pricing team go in and be real surgical and move faster. We're able to treat large amounts of data in ways that we haven't been able to in the past and be much more surgical with the pricing actions that we're taking. Okay. Appreciate that. Just a cleanup question. You talked a couple of times in the release about this incremental accident reserve. It's like CAD 10.5 million in the quarter. Does this recur? Is this a prior period adjustment? I think when we look at the corporate line, that certainly stood out this quarter. Yeah. Yeah. It's not recurring, that's for sure. We sure hope not. No. Every quarter we go through, we assess very clearly where our reserves need to be, we'll make adjustments to various files, it seems like some people wait till year-end to do that. We don't do that. We do it every single quarter. Also, David, if you could just add to that, the approach that through Brandon and the new team. Yeah. Versus the old way that we used to do it until about a year ago. By trying to settle ASAP, this is also part of the change. Yeah, that's actually, it's very interesting. From a business perspective, what you want to do is be very forthcoming and very aggressive with settling matters quickly. What we've done over the last couple of years is built a Miami-based legal team of in-house lawyers who are managing all of our claims and are working with the external lawyers and really driving it. The external lawyer doesn't always have your interests in mind, given how they get compensated by the hour, whereas us, our interest is getting it done. What's interesting about that is that when you start settling things fast, your actuarial reserves actually need to go up. The actuarial assessment is not looking at the fundamentals of what's happening. It's just saying, whoa. You guys had a ton of spend this quarter. Yeah, we did have a ton of spend, the reason we had a ton of spend was that we took care of a bunch of things that are not going to come back to bite us down the road. Right now, we're in that lump where the actuarial reserves are actually a little coming in high because of those settlements. Of course, when that then translates into less spend down the road, those reserves are going to come back and it'll unwind in the opposite direction. Yeah. Also maybe a few words on settling on the spot, what we're doing. Yes, absolutely. We do that with our internal team as well as an external provider. In terms of when there's an accident, we dispatch somebody immediately to the scene with authority to settle on the spot. So we've had a lot of success with that, and it's, yeah, it's an important part of our strategy. Yeah, because the problem, a claim grows with time. Over time, it's not going to get any better. It's just going to get more expensive. This is why we changed completely the approach there is if it's a minor thing, for sure, if it's major, okay, nobody's going to solve on the spot. If it's a minor thing that could turn over time, after a year or two, something way more expensive. We went, like David says, with our own team and with also an external provider to try to settle as much as we can on the spot right away before the lawyers comes in, before whoever, okay? Now I don't remember how many cases we settled. It's about 200. 200, eh? Yeah. On the spot. Over time, this is for sure, is going to help reduce our cost of claims. Just to understand, it seems like you've been doing this for a couple of years, at least had the team in Miami doing it. You feel like you've sort of hit an inflection in cleaning up some of the stuff, now quarterly is going to be more of a, I don't know, standard practice. Seems like it still could be a little bit bumpy just based on the activity. No, I think that this quarter's reserve, increase in reserve is exceptional. We do not expect these types of movements every quarter. Okay. All right. Thanks for all the details. Appreciate it. Thank you. Your next question comes from the line of Jason Seidl from TD Cowen. Please go ahead. Thank you, operator. Alain, David, afternoon, gentlemen. Good afternoon. Wanted to get a clarification question in first. I think you said that in terms of your spot TL exposure was at 25%. I was wondering if that includes all the heavy haul, because it seemed a bit higher than I thought it would be. I think like Daseke legacy was about 5%. No, that's the U.S. flatbed, it's 25%. The heavy haul and the legacy specialized in Canada is very negligible spot. No. Right? There's none. That's what I thought. It's like the over-the-road, Jason, the over-the-road flatbed, not the special, highly specialized- Right. tank, okay, or dumps or whatever. It's really the over-the-road thing. The regular flatbed if you want to call it. Okay. My next one's more of a macro question. Alain, did you guys see sort of any pull forward into June and maybe talk about the July trends that you're seeing out there? So far, what we're seeing in July, okay, or in June, I think that if you look back, David, at month of June, this was a great month in June. Yeah. May was a little bit soft. June was great. April was great. July, even with the vacation that we have with our customers, vacation we have with our own employees, drivers, and all that, so far what we're seeing is that it's quite surprising what we're seeing so far. Yeah, exactly. In July, right now, up until today in July, the revenue for truck In the truckload is 14.5%, which is the same as it was in June. Yeah. What we're seeing in the LTL is what we expect, right? Which is that the revenue per shipment is down less, right? It wasn't down 2%, it was down less. Also the shipment count's coming down. We're starting to see the effect of that price increase that we're putting through, work through in the way that we expect it to. Yeah. This is with the 3PL. Okay, corporate and SMB, it's steady as for us. Volume-wise and price-wise. Makes sense. Gentlemen, appreciate the time. Good quarter. Thank you, Jason. Thank you. Your next question comes on the line of Konark Gupta from Scotiabank Capital. Please go ahead. Good afternoon, Alain and David. My first question is on the LTL. Just trying to understand the move from Q2 to Q3. For the second quarter, the LTL operating ratio was, I think, 88.5%, which is, I think, better than the midpoint of what you were expecting heading in. You're saying flat in Q3, which probably means about 88.8%. If you had high P&C volumes and higher costs in Q2 and working to address that in Q3, why is that Q3 operating ratio not improving sequentially from Q2? Is it because it's going to take time to resolve those things, or is there some other noise in Q3? Okay. Konark, there's one thing that you got to keep in mind is USD versus Canadian dollars. Right? Our Canadian profit now are discounted at, let's say CAD 1.40, okay, versus the average of Q2. That's a little bit of an issue, okay. The other thing also part of our forecast is what's going to happen with fuel. For sure, there's no question about that the only area us where it's really a tailwind fuel is the Canadian LTL and P&C. Truckload is never a tailwind for us, and U.S. LTL is never a tailwind, or logistics. For sure, not knowing where we're going, okay, with fuel, this is why our Canadian folks, okay, when they gave us their forecast, they went with maybe a little bit conservative on fuel versus what it is today. Right? Now we're again above $5 a gallon. That's why our Canadian folks are being very cautious about where this is going to go. You got USD. What is USD versus CAD? CAD 0.01 difference, if I'm not mistaken. Yeah. CAD 0.01 is about CAD 0.01 in EPS. Okay. Yeah. It's about one to one though. No, thanks for that explanation. Sorry, make sure that I'm understanding that those margin improvements that we put in the press release, and we mentioned, those are year-over-year numbers. Yes, absolutely. I think your Q3 LTL year-over-year being flat also somewhat means year-sequentially flat. Given you had 88.8% and 80.5%. No, that's good explanation. If you can help us, I know you guys are not disclosing your regional operating ratios, but from trend perspective, is the U.S. LTL operating ratio likely to make a bigger move, a bigger and better move, in the next coming quarters compared to your Canadian operating ratio? Because that's where you're seeing service improvements. Is that fair? Yeah. Absolutely, Konark. The biggest bang for the buck is on the U.S. LTL. On the Canadian side, we are running very lean and mean and very efficiently compared to the only peers we have in Canada. When we compare ourselves to the only peers we know about, yeah. It's really the U.S. where we still have a lot of work to do, okay, to get to where we have to be. Okay. If, just to put that into context, Alain, how far are you from mid-80s on that? Is it like a year away or it's more like six months away in the U.S.? Konark, I've been at it with the team for five years. Every year we have a different kind of an issue, and we're just saying, when is this going to happen? Right? If you would talk to Cal, that is exactly what he's going to tell you. We fixed a lot of things, okay. I think that we're getting close to the end, right? Once our commercial team is way better. Okay. We have stability in our commercial team now, which never happened before. Our operating team, we definitely need some improvement there, and we're working on that. Our fleet, okay, in terms of the asset, in terms of the management of our fleet, it's major improvement. We're heading in the right direction. We fell in Q1, Q2. Now we're back on our feet, and we're going to be correcting that in the next quarter. It's been much easier, Konark, to turn around a truckload operation, because if you look back, and you look at that sheet today, the SFI truckload in the U.S., it's day and night versus what these guys were doing two years ago. Much easier to turn around a truckload division versus a big network that was probably not very important to the previous owner. This is why the tools, the fleet, the real estate, the morale, the management team was probably not priority for them. It is for us. Okay. No, that's a very good answer. Thanks so much, Alain and David. All the best. Thank you. Thank you. Your next question comes from the line of Tom Wadewitz from UBS Financial. Please go ahead. Yeah. Good afternoon. Let's see. Wanted to ask a little bit more on LTL and the brokerage piece, or the 3PL piece. How much of the book in LTL is with 3PL? Is that 30%? Is it bigger or smaller than that? Then I think in terms of just maybe if we look to, let's say, 2027, how do you think these two big businesses you have, LTL and truckload, develop? It seems like you are seeing a lot of really good news in truckload this year. Is there more significant runway or a similar improvement in 2027, or is that more moderate? Then LTL, just from a, I think, margin and pricing perspective, it's taken a bit longer, but is that kind of a, anyways, do you think about the delta and the improvement you could experience in 2027 in LTL? I guess a couple of questions within that. Thank you. Yeah. Okay. You know what, Tom? On the truckload side, we're just starting. We're just starting in a sense that what we've done with SPD. Now, SPD is focused on one business. We're doing the same thing with Lone Star. Lone Star, your focus is going to be, let's say, the wind, the data center, everything that is big and heavy and long, et cetera. Next is we're going to be working with another of our division. That we're going to do the same thing. Then we're going to attack another one of our division. This is an ongoing process, and it's not going to end in 2026. It's probably going to go all the way to probably summer of 2027, maybe Q1. By Q1 of 2027, we should be done. We have one company that is called SFI, with one leader of commercial, which is our friend, Scott Hoppe, one TMS, which is the McLeod Software system, that now it is going to be implemented over with one finance system, which is our Infineon system. With one fleet management, which is called MIR. With one visibility. We are also implementing Salesforce for Mr. Hoppe and his sales team. It is going to be one company versus when we bought Daseke, it was more like nine companies that were all over the place. This is truckload. What you see in 86 OR right now, are we going to do better than that in 2027? If the market is about the same, and the same is true of this supply constraint, yes, we will do better. Can we get to, let us say, an 80 to an 82 OR, 83 OR? I think so. If market stays about the same, if the supply is not changing, I think so. We still have lots of good stuff going on. Our brokerage operation with our specialty truckload is growing, like David was saying, I think 35%. With good margin. We are protecting ourselves. We use carriers that are professional, that we deal with them on a day-to-day basis. We do not deal with fly-by-nights. This is really our truckload operation. On the LTL side, we are working on improving, like we said, T4 trade. At the same time, we have a very small non-union LTL business today in the U.S. Very small. 1,000 shipments a day, 1,300 shipments a day, which is peanuts. We are working to build that up over the next few years and do the same thing as we do in Canada. In Canada, we run union or we run non-union. We run both. This is what we will also be focused on, is trying to beef up that non-union LTL slowly. We do not want to be in states where there is no density. When you build from scratch, the advantage you have is you pick the states. Where would we want to be? We want to be in Texas. That is for sure. We want to be in California. That is for sure. We want to be in Ohio. We want to be in Michigan. One will be in New York, one will be in the Carolinas. This is the beauty when you build from scratch. With 1,000 shipments, that is what you would call that build from scratch, right? Whereas with TForce Freight, we have a huge network, and we have to live with what we have got, and we are working on improving it every day. Any thoughts on just mix of 3PL within your LTL today? How large it is? It's over a third. It's ballooned to over a third. Yeah. As the volumes increase. That's pretty sizable. It's not atypical, but do you think that there's a significant loss of shipments as you price up? Because I think the 3PLs do tend to be, they shift things around as your pricing changes, I guess as you saw by having low prices. Well, if you talk about the 3PL, the CSP, the customer-specific pricing, no. Okay, Tom, they don't move around because what you give them is a specific pricing for a specific customer. That is way more secure than the blanket. The blanket, you're right. When you get the shipment, it's probably because you're the cheapest guy in town, okay. This is where we're working on changing the mix. Until a few years ago, blanket was probably like 80%-85% of the shipments that we were getting from the 3PL. If I remember correctly, our CSP, customer specific, we're at 45%, 55% is blanket, and this is where we got overwhelmed with volume, and this is what we're fixing. One thing is for sure is that 33% with 3PL is too much, and the approach has been with Cal and the rest of the team is, you want to use maybe the blanket as a loss leader when you are in a soft period. Let's say December, January, and February, that you don't have to lay off your workers. You could maybe use some of those 3PL blanket shipments to keep your employees at work, then you don't have to rehire people when you become busier, let's say, in February and March. Right. Okay. Thank you. Pleasure. Thank you. Your next question comes from the line of Kevin Chiang from CIBC. Please go ahead. Thanks for taking my question, Alain and David. I'll keep it to one. When I think back to your Canadian truckload segment, during the last peak, we saw ORs below 80% there, and now you're having the Driver Inc. model getting tackled more aggressively by the federal government. Wondering within your Canadian TL segment, do you think margins can achieve a higher peak than you saw in the last cycle, given that cycle also saw the Driver Inc. headwinds? It's still early, Kevin, I would say that the problem we have is that some sector of the Canadian truckload are still very weak, like steel. As you know, steel is on the Canadian side because of the tariff, steel is an issue. The other thing also that is an issue still in Canada is forest product. Lumber, plywood, et cetera. Because of those weaknesses in some sector, because we still don't have a deal with the U.S. This is why we're seeing major improvement on the Canadian side. Can we see more? Maybe if Driver Inc. continues to disappear. The problem we have is that we have some sector on the Canadian truckload side, steel, forest products, that are being affected because of we don't have a deal with the U.S. so far. Aluminum, we have lots of tariff on aluminum. Aluminum, it's not an issue because right now, if you look at the situation in Qatar that they probably supply 10% of all the aluminum in the world, and those guys are out. This is why our guys, the aluminum from B.C., although B.C. is small for aluminum, Quebec is big. This is like flying out the door. Really, really busy with that. The issue is steel and forest product. Okay. I'll keep it to one. Thank you for the color there. Pleasure, Kevin. Thank you. Your next question comes from the line of Bascome Majors from Stephens. Please go ahead. Yeah, good evening, and thank you for taking my questions. To follow up on Tom's question about where you think there might be opportunity in your larger businesses to really continue to deliver significant growth in the next year. Where are the places that are most likely to show acquisitive or M&A growth in the next year? Do you have a sense of that? Any walkthrough of how you feel on that side of the business would be helpful. Thank you. Excuse me, does he mean on M&A side? Yeah, which segments would grow through M&A. Okay. Well, what we like in M&A for sure, and you've seen it with the Daseke acquisition, is that if we could find something of size that fits well in our specialty truckload, absolutely. Between you and me, like I said, a small non-union LTL, okay, that could be added to our small non-union LTL that we have today. Let's say a CAD 200 million LTL, that would be a great fit for us to start with to build that network. Logistics. Us, we're big fans of logistics. We love logistics. We love to make money, and if you exclude the intangible, okay, we do really well with our investment in logistics. If we could have the chance that to put our hands, like we did in December, it's small. It's only, what, CAD 150 million revenue? Yeah. It's highly profitable, and we have a solid team there that's going to grow. It's still small. It's only $150, right? You say, well, Alain, this is all. Yeah, absolutely. Because TFI's blood is growth through acquisition. Yes, we like to grow organically, but M&A has been the success story of TFI. With the huge free cash flow that we generate, our leverage is down to 2.4. If we don't do anything of size, our leverage is going to come down to close to two by year-end. Right? Why is that? Well, because, we generate so much cash, right? We're very well-positioned. Solid balance sheet, huge free cash flow. We're on the hunt, for sure. Yep. Thank you. Thank you. Your next question comes from the line of Ariel Rosa from Citigroup. Please go ahead. Hey, good afternoon, Alain, David. Just very quickly, a point of clarification. For the U.S. LTL business, does the third quarter guide assume deterioration in the OR there? Continuing on Bascome's question, Alain, you're usually very good about giving us your thoughts on kind of the M&A landscape and how it might have changed and where there might be value. Maybe you could speak about what you're seeing there. Thank you. Yeah. On the Q3 for our U.S. LTL, no. They will improve the profitability of the company. There's no doubt about that versus Q2. In terms of M&A, I've always said you buy bad news, and you sell good news. That's why we invested CAD 1.8 billion over the last three years. Now people are starting to think that, oh, now times will be better, right? Then M&A could be more expensive, right? This is why when you have the M&A market more expensive, what's important is the fit. Okay? How does that fit you? If you have a target that's profitability, let's say is CAD 10 million, okay, and instead of paying five times, you have to pay six times because the market is What are you going to do with that CAD 10 million? If the 10 is, after two years, going to be 10.5, maybe it's not the best deal. If you think that the 10 will become 15 or 18, well then that's a great deal, right? Even if you have to pay a little bit more. This is that balance, okay, that we have to look at. Never forget that one of the easiest things to buy is your own stock, right? That's also a thing that we have to look at, right? If I'm buying TFI, I know what I'm buying. We've built TFI over the last three years, so we know TFI, right? That's always the balance between buying an opportunity or buying TFI or just reducing your leverage. Okay. Very helpful. Just quickly, I'm curious, this probably seems a little bit out of left field, but could we get your thoughts on kind of autonomous trucks and the development there, and any opportunities to maybe leverage that in line haul operations? Do you see that as still being kind of far down the road? Thanks. No. As a matter of fact, we are talking right now about that. We're talking. Maybe, David, you could give us a little bit more insight on that? Absolutely. It's actually exactly for our line haul as a first step, but we're very eager to roll this out. We are talking with one of the major providers of this autonomous truck technology. It was a surprise to us, but this has moved a lot faster than we thought. This particular company has driven millions of miles on real roads all around the southern part of the U.S. We're expanding from the West to the East. They've gotten into zero accidents. That's an incredible fact. You look at this, and you say, okay, there's a bit of an upfront cost, and then there's a cost per mile. What you benefit from is, first of all, it's like a team. It can drive day and night, and there's no hours of service. Second of all, it drives the truck way better. There's no idling. There's no acceleration. There's no braking. It's all very measured. You get better utilization out of the truck. Third of all, there's no accidents. There's the reliability of knowing the truck is going to be able to be driven. You don't have to deal with the driver turnover and the reality of people not showing up to work and whatnot. It's very exciting. We're rolling it out in the U.S. LTL on the line haul. In the first instance, the way the business model works is we broker to them immediately. They operate the truck. We get used to loading their vehicle, having it be in our yard. We sort of work in that way, but we broker it to them, and they deal with the operations. It's fine. Brokerage, transportation. It's PT. As soon as next year, we're going to be able to buy the technology, which gets put into new trucks, then we'll build this out. If it works, we'll roll it out beyond the line haul in the LTL. There's tons of applications of this for us. Got it. It sounds like starting small, opportunity to scale, if it works. Anything on timeline in terms of what that could look like getting to scale? The brokerage is happening this year to them. I expect that it'll go well, we'll be owning some of this technology next year, we'll just see how quickly we can scale it. Too hard to say right now how quickly. The dynamics of no accidents, better utilization on the truck, it's basically a team. All of the things that we discussed is really interesting. It's extremely interesting to think about as this gets rolled out broadly through our industry, what that means for consolidation among the well-capitalized truckers. Right? That's very interesting to think through. I think that what it means is that you're going to have a lot more consolidation and large capitalized players who can afford this technology are going to be dominating it. Trucking probably looks a little bit more like the rail in that way. Yep. Very interesting indeed. Thank you for the time. Yeah, we are definitely embracing that technology, that's for sure. Hello, your next question comes from the line of Cameron Doerksen from National Bank. Please go ahead. Yeah, thanks. Good evening. I guess I wanted to just ask a little bit about the logistics, the operating ratio improvement that you've indicated for Q3. Obviously, on a year-over-year basis, you've had some acquired businesses there that are helping that. I'm just wondering how much the, maybe an expected improvement in the truck moving businesses is impacting the Q3 year-over-year. Is that more of a Q4 into 2027 when we'll see kind of those volumes pick up just based on, I guess, the production plans for some of the truck OEMs? Yeah. What we're seeing on the truck moving business is that if you go back to 2025 and 2026, it's like the reverse. The first six months of 2026 was way lighter than the first six months of 2025, and the last six months of 2025 are very light compared to what we anticipate to be the last six months of 2026. Right? It's like the reverse. Right? For sure, our truck moving business is going to be very busy in the last six months of 2026 and into 2027. Right? I guess, are you seeing that yet? Oh, yeah. Maybe more so in Q4. Okay. Oh, yeah. No, we're seeing that in Q3, Cameron. Yeah. Okay. That's good. Even towards the end of Q2. Oh, yeah. Yeah. Okay. No, that's helpful. I'll leave it at one question. Thanks very much. Thank you, Cameron. Thank you. Your next question comes from the line of Benoit Poirier from Desjardins. Please go ahead. Yes, thank you very much. Maybe, Alain, I appreciate the color about flat LTL expectation for Q3 with some improvement, but any thoughts whether the tighter market for TL could eventually help the LTL market at one point? When would you expect the pricing action to kick in a more material manner? Yeah. You know what, Benoit, we were talking to one of our peers in the industry, and he was telling us, he's in the LTL business, and he was telling us that he's already starting to see, okay, shipments moving from truckload back to LTL. I would say us, we have not seen that, okay? This is what this guy from the industry was telling us last week. Right? I think that the fact that the truckload guys are getting busier because the supply has been reduced. They just say, you know what? These LTL shipments, it's too big of a hassle, okay? I'm going back to just pure truckload. Right? This is a transition that is probably starting as we speak, okay? This is affecting the van guys, okay, to the LTL. This is not affecting us in our specialized truckload operation because we don't really move LTL shipment in our specialty truckload sector. Okay, that's great color. Maybe just in terms of follow-up, there was some more talks today about the renewed liability risk after the legal case against C.H. Robinson. I don't know if you have any thoughts on what there could be some, any potential impact on your brokerage business, Alain. Yeah. What I would say on that is, first of all, remember, most of our logistics is not brokerage. Okay? Our logistics segment has some brokerage, but it's a lot of niche asset-light businesses that what they have in common is that they're asset-light. Has nothing to do with brokerage. Last mile. Last mile, truckloading business, value-added warehousing, et cetera. As it relates to brokerage, yeah, for sure. I mean, listen, we have a very serious safety review process for our carriers, and we're looking at exactly, if anything, what we need to enhance in that regard. We're already operating at an adequate level. What I would say, though, is that as soon as Montgomery came out, as soon as the judgment came out, not the one against the broker that came out just a couple, but when the Supreme Court ruled. As soon as that happened, we started getting calls like crazy from all these small brokers we had never heard of, right? They were calling us and trying to book loads with us. Why? Because those were probably the ones that were feeding the fly-by-night carriers, and it's too dangerous now to do that. I think that with this judgment that we've seen, it's only going to increase the level of diligence that brokers are going to do on their carriers, right? It's going to become unquestionable. You're going to have to work with a well-capitalized, professional, auditable, safe carrier. I think this is going to benefit folks like us and also some of the major trucker carriers who are doing everything they can on safety. That's well received, Benoit, that at the end of the day, I think the shipper also, it could be a wake-up call for the shippers to say, you know what? Why would I deal with a guy that's got no money and huge risk? Yeah. Right? This is all things that are helping, like David was saying earlier, clean up our industry of all the bad actors that have been there for so long. That's great color. Gentlemen, thank you very much. Thank you, Benoit. Thank you. Your next question comes on the line of Bruce Chan from Stifel. Please go ahead. Hey, good evening, gents. Just want to follow up on some of your comments around forestry products and Canadian steel. Obviously, we've had a lot of variability, let's call it, in the trade situation, and now there's discussion about new tariffs on Canadian goods into August. Just want to get your thoughts on how that might affect volumes, especially to the extent that anything is baked into guidance and whether you're expecting or seeing any inventory front-loading at this point. Yeah. No, we're not seeing any movement exceptional, okay, like pre-buying or pre-shipping, okay, because of the 30-day implementation deadline. Okay. We're not seeing that. This is not the same as what we've seen in Q1 2025, where everybody was trying to chase volume into the U.S. prior to tariff. We're not seeing that. The feedback that we're getting, okay, so far is that it will be implemented. We've asked our Canadian folks to look at what it is, and so far, it's huge for the Canadian economy, right? I think it's CAD 20 billion of export. For us, there's no real issue. The biggest issue we have between U.S. and Canada trade is forestry and steel. When we look at those next round of tariff, there's no real issues for what TFI is doing, transporter Canada-U.S., U.S.-Canada. Okay. Very helpful. Thank you. Thank you. That ends our question- and- answer session. I will now hand the call over to Mr. Bédard for any closing remarks. Thank you again, everyone, for joining us and, of course, for your ongoing interest in TFI International. As we move through the back half of the year, we will keep you posted on our progress, and we look forward to seeing many of you at upcoming events. Please don't hesitate to reach out if you have any further questions, and I hope that you have a great evening. Thanks again. Thank you. This concludes today's call. Thank you for participating. You may all disconnect.