So even if the market stays soft like it is now, I think that TForce Freight team will definitely improve. So this is why, to me, when we have a target for ’24 to be in this 87, 88 range, okay, I think it’s reasonable. But this is me talking before meeting those guys tomorrow. I hope that’s their plan because to me, that is a reasonable plan. That’s a reasonable target. We’ll see. But the fact that this market probably will stay soft, okay, even with the disappearance of a major player, okay, that’s the best that we can read so far. If I’m wrong and the market improves, so now even better, but the focus and I’m repeating that at TForce Freight, we have to be more efficient. We have to reduce our costs. We’re going to be providing — providing them financial information now by terminal, which they never had, which we have in Canada.
So think about it, Ken. Look at our OR in Canada. I mean, in a very difficult market in Canada, we’re able to come out in Q3 with less volume with a sub-80 OR. Why? Well, because our guys are very disciplined. They manage the cost notwithstanding the market condition. They do a better job than our US team. Our US team, you know, they don’t have the financial information detail. We’ll have that by terminal, and we’ll start to see some improvement ’24 and on.
Ken Hoexter: Great. Alain, I’ll ask a follow-up, but I’ll keep going. So you can get a sip of water there, but maybe you kind of reiterated your full-year target, right? So you’ve been yet and that’s a pretty wide range when we’re looking just as we move into fourth quarter. Maybe can you talk a little bit about what gets you to the bottom end versus the top end? Or is there — is your thought still some decent rebound into the fourth quarter. You look at that Canadian LTL, I agree, you know, staying in the 70s, amazing, but yet deterioration of 400 basis points. So I don’t know if there are thoughts you want to throw out there about what gets you bottom end versus top end of the range given we’re close to that, that year-end number.
Alain Bedard: Yeah. Good question, Ken. You know, if you look, our logistics in Q3, what you see in there is only six weeks of our JHT acquisition. So for sure, I mean, JHT is going to be there for the full quarter. So that’s going to help us. I believe that TForce Freight will do better in Q4 ’23 than Q4 ’22. Okay. So that’s going to help us to get to our target. Now, first, we’re going to work hard, okay, to — because we miss consensus two quarters in a row, right, Q2 and Q3. And you know, out of 25 years, we missed guidance about five times. I have been involved with trucking. So I don’t like that. So this is why, believe me, we’re going to work very hard to be closer to $6.50 than to $6, right. First, results that I’m seeing from October, okay, are very encouraging. So that’s why I feel pretty good of just reaffirming our $6 to $6.50, but we’ll probably be closer to $6.50 than $6 — $6.50 than $6.
Ken Hoexter: Great. Alain, thanks for the time. Appreciate your thoughts.
Alain Bedard: Very good, Ken.
Operator: The next question comes from James Monigan of Wells Fargo. Please go ahead.
James Monigan: Hey, good morning. Actually, just wanted to sort of follow-up
Alain Bedard: Good morning, James.
James Monigan: On the broader LTL. Good morning. Follow-up on the broader LTL discussion kind of to get a better understanding of the volume and pricing trends you’re seeing. It seems like there was surge of break to pull back. Just kind of want to get some context around that as well.
Alain Bedard: Okay. So I mean, the forecast we have for Q4 and into the new year, I mean, our forecast is based on about 25,000 to 26,000 shipments a day, okay. That is where we are seeing us going into ’24. So that to me is should be normal, okay, for the company of our size for, you know, the next years to come. And Tom, what was the, I mean, what was your next question?
James Monigan: Essentially, the trends you’re seeing in October and then you mentioned that there was a spike up in volume, and the spike down, just what was driving that during the quarter?
Alain Bedard: Yeah. Well, it’s just adjustment from shippers, right. So you know, when YRC closed their doors, I mean, for sure, customer called you, and then there’s an action and reaction and there’s been an adjustment. So this is why we went from 23 to close to 26 and back down to 24, 25 as we speak now. So but there, again, the story of TForce Freight, it’s not about volume for now. It’s about cost, okay. So what we’re saying to our sales team, guys, okay, try to get better freight, okay. 26,000 shipments is normal for us in ’24. That’s our goal. Okay, fine. Get better shipment because we keep improving that. And the ops guys have to work on the cost. So that’s how we’re going to bring, okay, we’re not focusing on getting more money from the customer. If we can do that, fine. If the market allows us to do it, fine. But our focus is not that our focus is really bring the cost down, okay. Be more efficient, do more with less.
James Monigan: Got it. Then on Canadian LTL, you’re doing much better than sort of the long-term guidance you had given at the Investor Day. And it seems like we’re at 12 [indiscernible] in terms of it. So like how should we think about essentially, is that number conservative, or is that actually sort of how you still think about the business? And if not like what do you actually do think the long-term margin can be in Canadian LTL? Thanks.
Alain Bedard: I think Canadian LTL, if you look at that Q3, with volume and pressure on the Canadian market, we were able to come up with a sub-80 OR. And don’t forget that we also made an acquisition in the Canadian LTL market, the Kindersley Group. And these guys are 2% bottom-line guys, right? It’s going to take us a year to bring those guys closer to 15% bottom line guys, right? So I mean, to me, we’ve always been more focused on bottom line than top line. So Kindersley is going to help us with the volume. So this is why when you look at our Canadian volume, Q3 over last year, our volume is up because of Kindersley, right? But you know, that’s good in terms of volume. But the profit margin is really, really like 2% with these guys.
So it’s going to take us a little bit of time. But I think that the Canadian market — Canadian LTL market is way more difficult than the US one in terms of market condition, quality of revenue, et cetera, et cetera. So this is why when you look at also our Canadian LTL, a lot of our freight is intermodal, okay? So probably like 40% of our revenue runs on rail. So to be able to come up with a sub-80 OR using the rail this is like close to America. But again I’m always emphasizing this is that our Canadian team has information, okay, to act and react, okay, every day. And this is what’s lacking in the US, those guys have the excuse today of not knowing anything about costs. The only thing that now they know is their labor cost per shipment, okay, since October of last year.
