Alain Bedard: Yeah. Yeah, you know what, Brian, I mean, the reason we did that $500 million placement is because — it’s not because we don’t know what to do, right? It’s just — we’re just getting ready to do something right. So if you look at what we’ve done this year, I mean, we’ve done about $100 million, right, of investments, okay, in terms of M&A. I think that we’re going to do more than that in ’24. So this is why we got set up with this private placement just in order to get a little bit more dry powder for us to be in a position to do the good things that we want to do into ’24. In terms of our pipeline, our pipeline is really strong in terms of M&A. Hello?
Brian Ossenbeck: In terms of quick follow-up, any thoughts on the yellow bankruptcy auction? Anything — seems like you have enough doors in the US now, but wanted to see if there is any particular assets that looked of interest to you. And then maybe just as a quick follow-up, same time, can you just give us a sense of how density is tracking in TForce Freight? It’s always a big part of the story here, some comments on stops per truck or miles between stops now that you have a big step up in volume in the third quarter. Thank you.
Alain Bedard: Yeah. Yeah, you know what, Brian, we’ve said it many times. I mean, our focus in the US, okay, has always been logistics and LTL. And to a certain degree, specialty truckload if there’s something that makes a lot of sense for us to do. In terms of improvement, okay, at TForce Freight, our miles per stop between each and every stop has improved, okay. This is helping us reduce the cost, okay, but we’re still a far cry from what we do in Canada. So, as an example, if we do, let’s say the Canadian story is we do about 5 miles between each and every stop. In the US, we used to be doing double-digit miles over 10, right? So now, with less volume than two years ago when we bought the Company, okay, our average mile per stop is not 5 in the US, but it’s not 10 anymore.
So it’s single-digit now. So slowly, okay, we’re doing more in terms of having drivers picking up freight and driving less. And when they drive less, well, they cost less money because they don’t on fuel. There’s less risk of accident because they — they’re not driving, they’re picking up freight. All right. So we are on the right track, okay, but we’re still far from the efficiency that we have in Canada. But this is work that needs to be done between our sales team and our ops team. So that the sales team really understands what we’re looking for. So TForce Freight used to be a sales-oriented company when it was owned by UPS. When it’s owned by TFI, it’s not a sales-oriented company. It’s an operational-oriented company. So the operation talks to sales about what they want, what they need to improve density.
It’s not the other way around where sales, this is the customer, this is the shipment, and now you got to take care of that. No. This company is moving into an ops-driven, okay, environment, and it’s the operation that works with sales and say, hey, this is what we want, this is the area, this is the kind of freight we need, okay. And don’t bring me something that I don’t want, right. Because I’m not jack of all trades and I still have none anymore.
Brian Ossenbeck: Got it, Alain. Appreciate it. Thank you.
Alain Bedard: Very good, Brian.
Operator: The next question comes from Scott Group of Wolfe Research. Please go ahead.
Scott Group: Hey, thanks. Good morning, Alain. Just want to follow up on the M&A. Just want to follow up on the M&A discussion. So it sounds like more M&A next year. Should we be thinking about a sort of a larger, more transformational deal? Is this just more — just more of the tuck-in deals? And how do you balance M&A with the potential for a big buyback just like the stock is now, basically back to like, pre-yellow levels right now? So how do you balance on the neighbor’s buyback?
Alain Bedard: Well, you know, buyback, we really love buyback. So I’ll give you an example. We just renewed our NCIB, Scott. All right. And we have an order to buy 1 million shares depending on the price. So this is, you know, this is the focus depending on the price, we’re there, we’ve renewed our NCIB, and we’re going to be, you know now. If there’s a major transaction, okay, and I think that if you look at history, normally you have something of size in ’24. We did a lot of nice tuck-ins in ’24. We’re probably very close to being done for, I mean, ’23. We’re probably close to being done in ’23. We got this $500 million placement just to get ready to be in a position, okay, in a better position. Our leverage is 1.39 right now.
We should be closer to 1.2 at the end of the year. So we have a lot of dry powder on our line of credit with our bankers. Now we have cash. We got $300 million to $400 million of cash at the end of the year. Okay. So we’re well positioned to do something of size in ’24. Now, it’s always the same story with TFI. There’s always one — not just one file that we’re working on. There are always more than one. So I think that the possibility of doing something of size in ’24, I would put that at 65%, 75%.
Scott Group: Okay. And then the —
Alain Bedard: Scott?
Scott Group: The other — at times, though, you’ve actually gone the other way and you’ve sold assets or spun assets. Is that something you’re thinking about right now? Are there assets potentially worth monetizing?
Alain Bedard: No, not in ’23 or ’24, Scott. Maybe that’s something that may happen in ’25, depending on what happens in ’24. We’ll see.
Scott Group: And then just lastly, you made a comment earlier that you’re not sure if the — if it’s the right environment for big LTL GRIs or something like that. And I know the GRI you announced earlier this month was, you know, a bit lower than last year’s GRI. We just had Saia announced their GRI this morning, and it’s actually a point bigger than last year. So maybe just I want to understand why you think it’s not an environment more supportive for LTL GRI and pricing.
Alain Bedard: Scott, you can’t compare OD, Saia with TForce Freight, right? So our reputation is not the same you know. So we have to gain reputation. We have to improve our service. We have to improve our cost, but we’ll also have to improve our service because for years and years, we’re hiding the truth, right? So this is why us in Canada, we could do these kinds of things, okay. We could be the leader, okay. But Scott, I’m sorry, but in the US, we have to be followers today. We have to follow OD and Saia and can we be in the same league of those guys? No. I mean, we were not as good as them. We’ll be, but we’re not today. So this is why when we talk to our teams as guys, let’s be cautious on that, okay. And Saia and OD are, you know the big guys.
You do really well. Fine. Us, we still have lots of work to do in terms of service, in terms of costs. And maybe next year we’ll be in the same league. Maybe it’s going to take us another year or two, but we’re not there, Scott. So we cannot be as aggressive on pricing as these guys are. Us, we have to be very aggressive on our cost.
