Earnings Call: Q2 2020

Jul 28, 2020

Earnings release

Good morning, ladies and gentlemen. Thank you for standing by. Welcome to TFI International Second Quarter 2020 Results Conference Call. At this time, all participants are in a listen only mode. Following the presentation, we will conduct a question and answer session. Callers will be limited to one question and a follow-up in order to get to as many callers as possible. Further instructions for entering the queue will be provided at that time. Before I turn the call over to management, please be advised that this conference call will contain several 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 from those anticipated. All dollar amounts are in Canadian dollars. Lastly, I would like to remind everyone that this conference call is being recorded on Tuesday, July 28, 2020. I will now turn the call over to Alain Bedard, Chairman, President and Chief Executive Officer of TFI International. Please go ahead, sir. Well, thank you very much, operator, and I appreciate everyone joining our call this morning. Yesterday, after the market closed, we released our 2nd quarter results. And if you need a copy of the release, please visit our website. PFI International performed well during the Q2, generating solid financial results, while continuing to prioritize the health and well-being of our employees and customers. Indeed, we performed better than expected despite incurring and absorbing various COVID related costs of doing business and saw several positive developments during the quarter that bodes well for TFI's performance going forward. As you may recall, we acted decisively when COVID-nineteen began to spread and in recent months have continued to focus on the details of our business while maintaining our emphasis on the fundamentals. You've heard me say it before, this involves optimizing our free cash flow and earnings per share, which we then use to expand our business and create long term shareholder value. We pursue an asset light business model. We seek opportunities to enhance efficiencies, and we maintain a strong financial foundation. We do this regardless of macro business condition and the Q2 was no different. In other words, the same operating culture that has facilitated TFI's rapid growth over the years is also the key to helping us navigate the ongoing pandemic. One core element of this approach is that we also adhere during the quarter is the expansion of our platform through disciplined accretive acquisition. In June, we further expanded our specialized truckload operation with the acquisition of GOSCO Transport, enhancing our container transport and storage capabilities while adding density, geographic reach and new customers. Also during June, we had a compelling opportunity to acquire selected assets of both CT Transportation and MCT Transportation, further adding to our specialized truckload capabilities. Both are excellent strategic fits with strong customer overlap and network synergies throughout an expanded geographic reach in the U. S. Let's now turn to our 2nd quarter results. As I mentioned a moment ago, we incurred and have absorbed all of COVID-nineteen related costs related to the more challenging operating environment. The need for extra sanitation and personal protective equipment, the payment of special bonuses to furloughed workers returning to work and certain inefficiencies related to doing business in this type of environment are fully reflected in our results that I will review now with you. Starting with our high level performance. Total revenue of $1,100,000,000 was down 17% compared to the prior year's Q2. Our operating income decreased 12% to RMB 131 1,000,000 while our adjusted EPS on a diluted basis of RMB1.04 compares to CAD1.18 a year earlier. Given our emphasis on generating strong cash flow that we can then use to invest and expand our business, we are pleased to have produced net cash from continuing operating activity of R228 1,000,000 and that's up a very strong 61% over the prior year figure. While our financial performance was certainly impacted by the global pandemic, the month of June was by far the strongest of the quarter, and we're pleased to see a rebound in parts of our business as the quarter progresses after the initial pullback in April due to the COVID-nineteen. In addition, back in April, I mentioned our objective of merging even stronger when economic conditions return to normal. During the Q2, we saw signs of this becoming reality. For more detail on this, let's now review the performance of our 4 business segments, starting with our P and C. This segment represents 14% of total segment revenue and saw revenue before fuel surcharge decline 12% year over year in June quarter. Operating income of CHF 23,000,000 compares to CHF 30,000,000 in the prior year and the segment operating margin of DKK16.2 million compared to DKK18.9 million the prior year. Our Package and Courier segment saw a rapid decline in business during April when economic condition deteriorated due to the COVID-nineteen and B2B activity slowed significantly. However, we soon saw a rapid pickup in B2C, taking the place of much of the B2B business that had slowed. We were able to profitably take on this new B2C activity as so much of it came on quickly, allowing us to achieve immediate density in the region we choose to service. Due to the rapid replacement of business, our overall activity improved and in the month of June represented approximately 1 half of our full quarter package and full year operating income. Looking ahead, we expect this segment to permanently benefit from the shift that occurred during the quarter as we expect to keep a portion of this new B2C business while B2B eventually recovers. In addition, we believe that we can quickly scale our capacity in terms of both drivers and trucks to meet the increased demand. Turning to LTL. This segment represents 16% of our total segment revenue and cell revenue before fuel surcharge declined 28% year over year. However, our operating income of €33,000,000 was up 10% compared to the prior year, primarily due to the Canadian wage subsidy of CHF 17,000,000 and our operating margin expanded 7 30 basis points to 21%. For those who are not familiar, the Canadian wage subsidy was designed to help Canadian business affected by COVID-nineteen rehire workers and prevent further job loss, providing subsidies of 75% of employee wage subject to a per employee cap. Looking back on the quarter, our LTL segment experienced sharp revenue pressure in April due to the COVID-nineteen and its impact on traditional brick and mortars retail. Helping to offset that pressure, we improved efficiency by merging our Canadian Freightway and TST Overland Express operating companies in May. This provided a meaningful margin benefit during the second half of the quarter, and we expect that benefit to continue going forward. Moving along to our next business. Truckload is our largest segment, representing 46% of total revenue. Truckload saw revenue before fuel surcharge declined 17% year over year. However, our operating income of DKK70 1,000,000 was 3% partially due to the Canadian wage subsidy of €15,000,000 in our specialized operation. And our operating margin was 14 point 8%, was up 300 basis points compared to the prior year. Taking a look at our truckload performance, our Canadian business held up fairly well. After initial drop, our U. S. Business began to come back strong, again with approximately one half of our operating income for the quarter produced in the month of June. Our specialized operation also performed well despite the several important customers completely shutting down due to COVID-nineteen. Our adjusted operating ratio was 86.5 percent for the Canadian truckload, an improvement relative to 87.1 percent in the prior year, 78.6% for the specialized truckload, an improvement relative to 87% the prior year and 91.8% for USTL relative to 90.2 percent the prior year. Similar to the LTL, part of our improvement during the quarter goes beyond market condition, reflecting our long standing focus on profitable growth. Finally, logistics is our 2nd largest segment at 24% of total segment revenue and saw revenue before fuel surcharge grow 8% year over year in the June quarter. Operating income of CAD 23,000,000 was up a very solid 27%, excluding the year earlier bargain purchase gain of CHF 11,000,000, reflecting 130 basis point increase in our margin to 8 point 6%. E commerce and demand for parcel delivery were strong throughout the quarter with traditional retail outlets closed and more people working from home due to the coronavirus pandemic. Our balance sheet remains a source of strength for TFI International benefiting during the quarter from our strong cash from operation and our focus on driving working capital improvements. We ended the month of June with financial leverage at a multiyear low and a $1,100,000,000 of liquidity. Last quarter, as it was early in the COVID-nineteen crisis when I provided an overview of our rapid response, so I wanted to provide you an update. You will recall that among the many strategies we quickly implemented in March to reduce operating costs and CapEx, we reduced executive wage and reduced the work week for more than 1,000 full time employees. We also implemented a reduction in force designed to support these individuals during hopefully temporary unemployment and we suspended all CapEx to which we are not committed to. As I mentioned at the time, we approach all decisions strategically with an eye towards helping TFI quickly emerge even stronger. I'm pleased to report that as business condition improved between April 'seventeen July 'fourteen, we have reinstated full 5 day work weeks for 5 94 employees and rehire 793 employees full time who had been furloughed. In addition, we have slowly begun to resume some elements of CapEx. So before we open the call for questions, I want to share our outlook for the full 2020. We cautiously expect adjusted diluted earnings per share to be in the range of $3.40 to 3.75 dollars and free cash flow, which is a non IFRS measure, to be in the range of €425,000,000 to €460,000,000 Looking even further ahead, we feel very confident about our earnings power in 'twenty one. Given the investments that we're making this year and the costs we've permanently taken out of the business, such as the synergies from merging various operating companies. In addition, we've been careful to keep our team intact through the pandemic, prioritizing furlough rather than layoffs. And as I mentioned earlier, we believe that e commerce uptick that's driven an uptick in our B2C business is sustainable. So again, we're feeling very good about 'twenty one and beyond. In summary, I'll reiterate that TFI's international overall capital allocation approach does not change regardless of the macro environment. We invest capital where we see the best risk adjusted return while paying our quarterly dividend and continued our track record of pursuing attractive acquisition opportunity in a very disciplined manner. As you continue to see in our results, we look to generate not just growth, but profitable growth in the interest of creating and unlocking shareholder value and returning excess capital to shareholders whenever possible. I wanted to thank all my colleagues at TFI for their hard work and dedication through these unprecedented times. And I also want to welcome the many new analysts who are now following our company. It's great to have you with us. With that operator, if you could please begin the Q and A section. Thank you. Your first response is from Ravi Shankar. Please go ahead. Thanks. Good morning, everyone. A couple of questions. David, if I can start with you. Can you just walk us through all of the puts and takes on the cost side related to COVID in the quarter? What kind of tailwinds did you have in terms of costs coming off that might be restored into 3Q? And also any specific COVID related costs that you incurred in 2Q that will kind of go away in 3Q? Okay. So if you look at Q2, what we've seen, first of all, is one of our costs is besides all the sanitation and B2B and also in some instance, some workers that don't want to show up for work because they're scared of whatever that could happen and all that. Besides that, I mean, if you run a network like we do in our B2B at the P and C sector, if I look at ICS, for instance, if I look at TFIS, those two guys are 95%, 98% B2B. So we have a tremendous pressure, okay, when we have to shut down because the malls were closed. So most of our customers were down. So if you look at ICS and TFIS, April's revenue numbers, we were down 65%, okay, in that month. And you're still stuck with the employees that you have to furlough and all that. So these costs, okay, we have to go through all that. Our Canpar Loomis operation in our P and C was not affected as badly. So if you look at in April, revenue was down about 35%. If you look at Canpar Loomis today, the revenue is up year over year right now since June, okay, because of the B2C. Now ICS and TFIS were not really equipped at the time to really service the B2C. And this is something that we are working on right now, okay, because we see more and more demand on the B2C side. So that's our P and C operation, but it's also the same story with ILTL. If you look at the drop of revenue in our ILTL, we run a network. It's unbelievable what happened to us because on the Canadian side, I mean, we've closed fast and we reopened very slowly, Ontario, Quebec. Well, Quebec may be a little bit faster than Ontario, but Ontario has been really slow to reopen. So huge drop. So what we've done, okay, when I looked at that, you know, nobody wants to miss a storm. When you have a big storm like this pandemic here, this is the time that you could take action that in normal time, it's difficult to do. So we went ahead and we combined TST overland, okay, with CF. And we've done that very successfully. So now, okay, with this new combination, we were able to take some costs and consolidate some operation, and that's going to be a huge benefit in the future. If you look also at our logistics in the U. S, it's just pre COVID thing there. We just acquired the business of Donley. And there again, okay, we were lucky enough to have a lot of work to do in terms of integration. So we're you're going to see us again shedding costs. We got rid of about 26 locations that we acquired from Darling just in Q2. So a lot of good stuff on the go at TFI. This COVID thing, okay, which was a big headache when it started because it just happened overnight. And what are we going to do about that? Well, are we going to do about that? At TFI, we have experience. If you look back at 2,008, there was a financial crisis. And TFI performed really, really well. And thanks to our team, thanks to our people, thanks to the dedication of our employees and our management team. Our focus has always been on making money. It's been a challenge, but I think that we've performed very well. So not going into all the details of what we've done, I'm just giving you some highlight, okay, of all the things that we're doing. If you look at our USTL, for example, so everything that was not committed on the CapEx, we stopped. Then about a month ago, Greg, our EVP in charge of U. S. Steel called me and said, hey, I mean, we got to do something about that. I mean, we have to get more CapEx. I looked at that. Greg sent me the business case. I said, Greg, you're right. Okay, let's do it. So we've added all the CapEx that we were supposed to do that was not committed that we put on hold. Now we're going to do those CapEx in 'twenty because we have full confidence about what's going on. And yes, the OR of our USTL has deteriorated a bit. This is because we lost so much business at TCA because of the plant's closure. So we have a customer that had to close his automotive plant because they were not getting the parts from Mexico because of what was going on over there. So this plant was shut down for more than a month, maybe 2 months. But that's why our revenue dropped also not so much, okay, in our US TL versus our Canadian TL or Canadian specialty truckload. But still, TCA, that's why our OR, okay, went up a bit in our US TL. But if you look at our specialty TL, the guys have done a fantastic job. Even if you exclude the subsidy that we got, we did better this year than last year as percentage. Why is that? Because we made a lot of acquisition in 'nineteen of companies that were running in 'ninety five, 'ninety six, 'ninety eight OR, okay, in 'ninety two. And then Steve Brookshaw and his team did a fantastic job of reducing the costs even through this pandemic. So this is why exclude the subsidy and you'll see as a percentage of revenue, these guys did very well. Now we're down big time on the revenue. But if you look at our month of June, we're starting to recuperate a lot of this revenue that was lost because of plant closures. Very helpful. And then just maybe as a follow-up to that. I mean, you're clearly laying out things that have started to normalize somewhat and come back to the way they used to be. Has the M and A environment also normalized to the point where you guys can get back to looking for a big kind of transformative acquisition? I mean, clearly, you guys have been very active on the small tuck in side this year. But do you think the market is normalized where you can kind of go after a bigger deal? Well, M and A has been the engine of TFI. That's in our blood. That's what we do, okay? I've got a fantastic team that runs operations. My job working with David and Jason is really M and A. So I mean, we did a few small deals, okay, in Q2. I think that based on what we see today, based on our confidence, based on the solidity of our team, I think that something important can be reality within the next year, absolutely. Maybe even shorter. We'll see. I mean, guys are working hard, okay? But like we always say, you got to be cautious when you buy something. You do all the due deal in the world, but there's something that maybe you don't get. So you can't do 25 deals at the same time. So you got to do 1 at a time. The small deal in Canada for us, it's easy because we have a team that's second to none. It's easy for us to integrate a $30,000,000 or $40,000,000 or $100,000,000 business in Canada. In the U. S, we're beefing up the team. We have a much better team today than 2 years ago, okay? So that's why we're able to add CT and MCT. And probably, we'll see some more stuff in the U. S. Down the road. Absolutely. So I think that the environment for M and A, okay, with about $1,000,000,000 in available funds, I think it's the way to go for us. It's in our blood. That's what we do for 20 years and more. Very helpful. Thank you. It's a pleasure. Thank you. Your next response is from Jack Atkins of Stephens. Great. Good morning and congratulations on a great quarter. Thank you, Jack. So, Lane, let's maybe start with what you're seeing more specifically within the U. S. Truckload market. We certainly have seen it feels like a fairly sharp recovery in activity here over the last 60, 75 days. Could you maybe talk about the opportunity within your U. S. Truckload operations to begin to reprice some of the lower yielding freight within your customer list? And sort of how you're thinking about that business over the course of the next call it, 3 to 4 quarters given what could be an upcoming rate cycle here? Yes. Very good question, Jack. So our guys have done a fantastic job through the pandemic. Our average revenue per mile dropped Q2 this year versus last year, just a few pennies at CFI, just a few pennies. Now you're going to say, well, if you're on 200,000,000 to 300,000,000 miles, just a few pennies is a lot of money. But for sure, we saw some pressure in April, May. But now if I talk to Greg, he's going to tell me, I mean, I'm overbooked now. It's like what's going on, okay? So this is why going back to my comments for the first caller is that I said, okay, Greg, so let's bring back the new trucks in. Okay? Greg was telling me that we've never seen so many good drivers show up at CFI TCA, okay? Because they see the future. I mean, this CFI used to be a diamond, okay? And now people in the trucking world are starting to see, wow, CFI, wow, it's a fantastic company. Now MCT is going to be managed now by our friend Greg and his team as a kind of specialty carrier within the CFI group of companies. So we see some very good quarters ahead of us. I mean, when we talk about customers and the economy in general in the U. S. And also maybe a little bit of this on shoring that's been going on, maybe more freight coming out of Mexico. And as you know, CFI is a very important carrier in Mexico. Every day, we got about, what, I don't know, 2000, 2500 trailers in Mexico. So now Mexico is going through some difficulties with the COVID thing there? Yes. Okay. But slowly, they're like reopening and is doing better. So, Jack, I see some good stuff. This is why TFI is so well positioned to grow into the next 3, 4, 5 quarters, both organically, I think, and through M and A. Okay. That's great. That's great to hear. And then I guess for my follow-up question, could you talk about what you're seeing in your business in July, specifically with regard to the B2B versus B2C trends, are you starting to see your B2B customers come back online, begin maybe shifting or even catching up given the shutdown? And how are you thinking about the right mix of B2B versus B2C for the business as we look out here over the next several quarters? Yes. If I look at our B2B versus B2C business in Canada, as an example. So if you look at my logistics in Last Mile, in the COVID, very like April, May June, our revenue was up like 35% year over year. Okay? And then now we're starting to see a little bit of a drop, but now instead of being at 35%, now we're 20% to 25%. And I think that this is where this is all going to stabilize, okay, because B2B is starting to reopen in Canada slowly. Okay, fine. Now, if you look at my Canpar Loomis operation, whereby those guys used to be maybe 10%, 15%, okay, B2C. And our approach has always been, we don't want to service the B2C guys and not provide the right service. Because if you look at the service failure in Canada of a lot of those companies, I'm just going to give the example of Canada Post. I mean, it's been a terrible or a puro. So our focus to us has always been we grow, but we grow in making money and also we grow in providing the right service. So not being all upside down and not being able to or service or deliver goods after a week. So you're a week behind? No, no, no, we don't do that. So we're seeing a shift in our Loomis Canpar operation into if you look at Canpar today, B2C is getting closer to 35% of the global revenue. Their revenue in July, I mean, is up. I don't want to say too much, but it is up significantly over last year, Loomis Canpar, because of this growth in B2C. And we were able to grow it the smart way, okay, instead of just saying to customer, well, give me freight. I want to deliver freight me. No, no, no, no. Give me freight and the ZIP code. Why? Because I can't create density in those ZIP code. So I don't want freight all over the place. I want freight in this zip code. So we've been talking to the retailers, to all these guys and say, hey, so we're really focused, laser focused. And at the end of the day, B2B has always been more profitable than B2C. But if you do it the right way and you price it the right way, yes, there's still a little bit of a difference, okay, but not that much. And for sure TFI is part of that e commerce future. And if you can't beat them, join them, this kind of mentality. So we see that the B2B, the malls and the brick and mortar guys, they've suffered a permanent kind of impairment. I mean, this COVID thing has been a catalyst for e commerce. And people will come back to B2B a little bit, but never the way it was pre COVID. And e commerce keeps on growing. I mean, the largest e commerce guy keeps on doing whatever he has to do to grow his business, and it's working. And some retailers are following, okay, behind them. And us, TFI, we're adjusting ourselves. So you'll see probably our P and C down the road that was pre COVID, maybe at best 15% B2C. You'll see us probably within a year, year and a half closer to 35%, 30% to 35%. Now, we're doing all that and protecting our margin because we're not stupid, okay? Yes, you look at my margin of P and C in Q2 and you say, Alain, you dropped your margin. No, no, no, no. My margin went down because of April. If you look at June, if you look at July, my margin is not down, right? So that's our approach. We're in business to big money, servicing customer to the benefit of our shareholder. That's our motto. Thank you. Your next response is from Scott Group of Wolfe Research. Please go ahead. Hey, thanks. Good morning, guys. Good morning. Elaine, can you tell us how much of the wage subsidies are you assuming in the second half of the year in the guidance? Very small, very small. I mean, they've adjusted the program because if there was no adjustment in program, probably it would be like very close to maybe just a few million. Now, in our forecast, it's very minimal. It's not even half of what it was in Q2. So it is small and not really significant at this time. So when I look at the guidance for the back half that's lower than the 2nd quarter, is that per quarter, is the big change there just the wage subsidies going away? Or is there anything else that's causing the 3rd quarter? Yes. You're right. The subsidy is like kind of going away, number 1. And also, it's we're very cautious about that. When you give guidance, I mean, you got to be very cautious and you got to be very conservative. If we look at our model and what we always our top guidance is always what we believe is our kind of hopefully it doesn't happen. We do better than that. Okay. And then just on that last question about the B2B and B2C, I guess, I heard the update on B2C trends. Maybe just if you can give us a more specific update on B2B trends and how bad they were in April May and maybe what you're seeing right now in July? Because I just wanted to understand how much B2B is picking up. Yes. So if you look at our P and C that are really focused on B2B, which is ICS and TFIS, those guys were down in April about 65% of revenue. If you look at those guys today, they're still down about 15% of revenue. Why? Because Ontario, which is our biggest market, has been really slow in terms of reopen. They have been very, very careful in Ontario. Toronto, okay, even more. And Toronto has been the largest market in Canada. So this is why those B2B guys are still like 10%, 15% down year over year in July. Okay? So that's the trend. Now what we think is going to happen is that there is a permanent impairment in B2B. Now we don't know how much is that. Is that 5%? Is that 10%? Because of the shift to e commerce, the stores that are closing and not reopening, okay? So maybe, okay, B2B will be permanently down 5% or 10% in the coming years. We don't know yet. What I could tell you is that we are now getting closer, okay? And even at minus 15% or minus 10%, we're doing better this year than last year, bottom line. Because a storm like that, a pandemic, a financial crisis like we've lived through 2,008, always good for TFI because, yes, we question every day what we do, how can we do better. But this crisis puts even more pressure on doing things that sometimes maybe, no, no, let's do it. And we've been very successful in terms of permanently doing more with less. Thank you. Your next response is from Konark Gupta of Scotiabank. Please go ahead. Thanks and good morning Alain. How are you? Hey, I'm good. I'm good. How about you? Pretty good, Alain. Thanks. Hope you're keeping him well and safe. I just want to dig into the free cash flow guidance you provided. So I'm looking at the first half of this year, you have already done almost $400,000,000 free cash. So I think, let's say, give or take, you have another $50,000,000 coming in the second half. Is that decline in the free cash sequentially? I mean, is that due to the tax payments that might have been deferred from the first half to second half? Yes. That's part of that, okay. And it's also the additional CapEx that we're going to do, okay, like I just talked about because we're resuming our normal CapEx, which is in a normal year for TFI is net net of USTL operation in some of the acquisition that we've made. In our USTL operation in some of the acquisition that we've made. So this is why this is again I mean, what we're saying here is that, guys, take this range and think about this is a cautious thing that we're saying. I mean, we don't want to overpromise and underdeliver. We're trying to do the opposite. Right. That makes sense. And then on the B2C side, you said there's some of the business that you have picked up in Q2 during the pandemic, you expect that to sustain. I mean, can you share some more light on that? What kind of business is that? And whether it's in the U. S. Or Canada? Any other details you can provide? Yes. What we've seen so far, guys, is for us on the because in Canada, we're way more involved in the B2C than in the U. S. For now, okay? Yes, U. S, we're doing a lot, but in Canada, we're doing even more in this much smaller market. So what we've seen is the fact that because of the consumer, because of the lockdown and because of that, the consumer had to do to buy in a different manner. So e commerce was the solution. And us, we're not there with rates that don't make any sense, okay? So that's always been our focus. And we're there also to deliver on time. We're not going to say, okay, we're going to take 100 parcel and take a week to deliver. So we have a capacity that we've been growing, we've been adding, okay? So this is where we're going step by step in the right direction. Now you'll see in Q3 and in Q4, I think that what we're seeing so far in July, okay, because now B2B is starting to reopen, okay, we're seeing that our Canpar Loomis operation are still running 10% to 15% over last year in July, revenue wise. Now that's because B2B is still not back up 100%, but B2C has done a fantastic job for us. Hello? Hello. Your next response is from Allison Landry of Credit Suisse. Good morning and thanks and great job on the quarter. Thank you. So I just wanted to follow-up on the questions with respect to the B2C shift and the portion that you plan to keep. Maybe if I could wrap that in a different way and how you think that the when you consider the portion that you're keeping, how you think that both the long term mix of the segment, what you think that will look like and particularly as B2B recovers? What's sort of the long term trajectory there? If you could just remind us what it has been historically? Yes. So we've always been careful about B2C. We've always said, B2C, you've got to be careful because the coincidence, the delivery is not the same. I mean, B2C is 1 stop, 1 package. So we've always been careful about that. So pre COVID, if you look at TFI, our Canadian P&C operation, for example, was maybe at best 10% B2C combined. And we've always been careful about bringing new business with a B2C environment. Now our last mile operation, okay, both U. S. And Canada, that's a different story because that's their bread and butter. I mean, those guys, they don't run a network, okay? They run, okay, very lean and mean. So for them, it's a solution that's similar to the Amazon solution. Now that being said, if you go back to our P and C, what we're seeing is slowly, okay, we know that the B2B will suffer a permanent impairment because stores won't reopen because of whatever reason. The brick and mortar guys are suffering. We don't know if it's going to be minus 5 or minus 10. So our approach to that has been, guys, we have to replace and we have to grow because if you're not part of the solution, you're going to be part of the problem. So this COVID thing has been a catalyst for us to really refocus ourselves and do the B2C in a very efficient and profitable way, okay? So if I look at my Canpar and Loomis operation today combined, okay, my B2C runs probably like in the 20% to 25% today. Well, before, I was maybe 10% to 15%. So we're growing and Canpar Loomis year over year right now, they're about 15% ahead of last year in July. So what we're doing is we're replacing some of the B2B that is probably going to be permanently lost, maybe 5% or 10% by more the B2C but profitable, right? Now also the B2C that we're focusing on, like I said earlier, we're focusing on high density area, okay, like the Toronto, like the Montreal, like the Vancouver. We're not really big into, I would say, like Sudbury, for instance. I mean, it's small town up north in Ontario, right? So that's been our focus. Now if you look at our logistics, our T Force Logistics, I mean, those guys are doing a fantastic job through a last mile operation, which is similar to what Amazon Logistics is doing. It's exactly the same model. So you'll see us. Okay, if you look at our trailing 12 months, 6 months ago, e commerce was about CAD400 1,000,000 for TFI. And you'll see that moving along pretty well in the future because we've been able to find a way to do it efficiently even to our P and C business. Okay. That's really helpful. Then I just wanted to ask about the 3 acquisitions that you did during the quarter. And maybe if you could just speak to strategically how they fold into the platform? And then any comments that you could give on the broader M and A landscape, that would be great. Thank you. Yes. So if you look at GOSCO, for instance, I mean, we are running what we call in Toronto, our company is called PNW. So the acquisition of GOSCO and the combination of P and W, I mean, it's going to be a fantastic transaction. So we are looking right now into consolidated the 2 sites in Toronto, okay? So it was a strategic move to beef up what we do in this sector in Ontario. The CT and MCT was more like an opportunity for us to grow into the specialty truckload. So we've said, okay, that if you look at our van operation in the U. S, okay, we feel good about what we have today. Maybe a small acquisition is fine, but we feel pretty good. We want to build our specialty truckload because if you look at our Canadian operation, our specialty truckload is second to none. We're doing so well. So slowly, I mean, we're building this specialty truckload operation in the U. S. So we started with Holic and Chile about a year and a half ago. And now we're adding CT and NCT. And you may see more of this in the coming quarters into TFI growing as U. S. Specialty truckload operation. That's a focus of ours. Now in terms of M and E, what we see in the future, like I said, specialty TL in the U. S. For us is really very important that we grow that, okay, because we see a lot of opportunity in that sector. We love all the chemicals, the food, all these businesses that if you look at the U. S, there's not really if you exclude the flatbed operation, there's not that many public company that runs into this world in the U. S. And that's one of our strength. If you look at our OR in our specialty truckload pre COVID, we've always run these operations between 8285 and a drag to our OR has always been all this M and A that we've done because we don't buy an 82 OR company. We buy 92 OR, 95 OR and we bring slowly those guys back down to 80%, 85%, something like that. So specialty TL for sure. Our last mile logistics in the U. S, absolutely focus of ours. I mean, we've done the Donley deal. We've done the BeavEx deal. Cal and his team slowly are bringing our logistics operation in the U. S. Closer to what we do in Canada. For sure, today, our profitability level in Canada is way better than the U. S. Okay. But slowly, Cal and his team, okay, they're going to start moving the profitability to the closer to the Canadian level. So M and A in logistics in the U. S, I mean, absolutely, It's a focus of ours. The other thing also that we're really focused, like I said, LTL in Canada, you see our revenue dropped like 25%. It's terrible. But don't forget that LTL in Canada is suffering also from the e commerce. So if we can find the right company in Canada or maybe down the road in the U. S, we'll see. But if we can find the right company in Canada today, okay, absolutely, like we've done, we bought NFF maybe 2 years ago. That's going to be another focus of ours. So we are really going back to the mission of TFI after 2, 3 months of not knowing exactly where the future was with this pandemic thing there, I mean, we're back to our mission of growing this business slowly, smart, in a smart way through M and A. Thank you. Your next response is from Walter Spracklin of RBC Capital Markets. Please go ahead. Yeah. Thanks very much. Good morning, Eli. Good morning, Walter. So I guess my first question is on the your guidance for earnings. I was wondering if you could give us your revenue thoughts that underpin that earnings. I'm just trying to understand, is this a earnings guidance that assumes lower volume with a certain margin or higher volume as things rebound? Just curious your overall top line outlook that underpins that EPS guidance. Yes. So if you look at the back end of the year, we don't see right now, we're, what, minus 17 in the quarter. We don't see us being at par, okay? So there's no M and A in there, except what has been done, okay? So we're not back to where we were for the last 6 months of the year in terms of revenue. We still see a slow recovery, okay, in the back half of the year in terms of revenue. So I would have to get back to you, Walter, to tell you exactly where we're at, but I think it's about minus 5% versus year over year. Okay. That makes sense. And then for my follow-up, it's on acquisition. I know Mullen Group has signaled their interest in expanding now Audi's and a little and obviously they're focused on LTL. How do you view that? Is that I mean, obviously, Murray is a good competitor, rational player. If he's in also consolidating, does that make it more difficult for you? Or is this an area that you're not focused in? And is there any kind of other angle that could occur between those two companies with regards to the LTL market and kind of trying to build the density that you mentioned that's so important in that market here in Eastern Canada? Well, I don't know what Murray's plan is. I mean, I don't mind competition. We love competition. So listen, I mean, if you look at our track record, I think it speaks for itself. Now, I can tell you, Walter, that us, for sure, we want the talk. So, just watch what's going to happen in the next 6 months, and we'll see. Now, we've been doing that for 20 years. My friend Murray runs a great company. So fine. But as we have our own plan, we're really focused on what we've done for the last 20 years. As you know, I was with the Subaru family in M and A sector before that. That's what I've done in my life. So we're really focused. We've got over $1,000,000,000 in liquidity. Our debt to EBITDA now runs about $1,600,000,000 $1,700,000,000 based on the way we do it with the banks. We got lots of potential. Our team is second to none. I mean, we got a team that is fully, fully focused and dedicated. They understand the mission. And there's not that many companies that you can buy in Canada in LTL. There's not that many. And the Canadian market for LTL, it's difficult. I mean, we're competing with lots of family company that for them, two points. Bottom line is acceptable. As we shed some business that because we said to the guys, listen, if we're in business to make 2 points, well, we'll just take the capital and buy RBC stock because RBC gives you today be 4%, 5% dividend. So why would you take risk and make 2 points? Stupid, okay? So we'll see you, Walter. But us, our focus is really, like I said earlier, Canadian LTL, if we could find the right company, perfect. And the logistics in the U. S, absolutely. I mean, our T Force logistics is growing, and we're growing top and bottom line through the acquisition of Don Lee and others. Specialty TL, absolutely. Yes. So that's the few areas that M and A is really, really focused. And as you remember, on Q1, we said M and A is on hold, okay? And when we restart M and A, we're going to start with small tuck ins like we did with GOSCO and others. And as soon as we see the environment, okay, that is acceptable, maybe we'll bring back the big whale. So only time will tell, but we're focused. Thank you, Alex. Pleasure. Thank you. Your next response is from Brian Ossenbeck of JP Morgan. Please go ahead. Hey, good morning, Elaine. Thanks for taking my questions. Hi, Brian. I just wanted to come back to the B2C and e commerce one more time. Just to get your thoughts, this a permanent repricing of the value of B2C delivery now that demand has gone up so much and maybe won't change or at least won't go back to the way it was before? Or do you believe this is really driven by density and being able to be selective. I know most of your comments were focused in Campo Arunis in Canada, but also wanted to see if any of those dynamics apply to the last mile logistics, considering they're certainly even more focused within e commerce? Yes. Yes, that's a very good question. You see, Ryan, we got to split our logistics last mile operation U. S. And Canada, okay, versus our P and C in Canada. So our logistics and Last Mile, both U. S. And Canada, we are second to none in terms of the solution that's comparable to an Amazon, okay? So we are growing more in Canada today than we are growing in the U. S, okay? But that's you'll see a change over the next 6 months to 12 months. And what we've done, okay, for example, is that the Canadian sales team run by Dean, okay? Dean has done a fantastic job in Canada, okay, selling this e commerce solution. Our U. S. Team was lagging behind. So what Cal has done, okay, he said, hey, Alain, what my plan is, is I'm going to have Dean, okay, involved both in U. S. And Canada because we have similar customers. So this is something that took effect about 6 months ago. So now we are selling in North American solution in our logistics and last mile, okay, through Cal as being our EVP and Dean being our sales VP for North America. And this is what I'm saying that our U. S. Sales force that was not doing 100% a good job, okay, now with Dean's as being the new leader of the U. S. Sales force, you'll see some improvement in our approach to the e commerce, okay, more focus, not trying to be jack of all trades and master of none. Okay, let's be laser focused. So that's our logistics and last mile. So it's really one now. More and more, okay, this Canadian U. S. Operation is being more like a North American operation. The P and C operation we have is only Canada. Okay? And our approach there has always been, yeah, look at our margin, 18 points on average. Who can beat that? No one. Why? Because the B2C that is a little bit less profitable and it could be a big headache if you try to do it not the smart way. So our approach until this COVID thing has been, yes, 10% it's okay. Grow, but grow slow and don't take risk because we have to protect our margin. This COVID thing has been a catalyst for us to say, you know what, we've lost. If you look at ICSTFIS, we lost 65% of our business just over that boom, just like that. Woah, what are we going to do about that? How long is this going to take? So Brian Coed and his team came back with Helane. We have to reopen, okay, and look at this e commerce business that's growing big time, okay, and how can we do it in a reasonable, profitable way, okay, that's not going to kill our margin? And the guy came to a solution, which we believe density is really the solution for us. So we focus laser focus on zip code, areas where it makes sense for us. And now if you look at in Parlums, like I said earlier, the revenue is up year over year in July, even in June. More B2B guys, ICS and TFIS. We're working with the management team there to have more of an e commerce solution, right? So for example, our website at ICS, TFIS are focused more on the B2B account. So within the next month or 2, we're making some change to our website so that a consumer, a customer, okay, for him, it's going to be easy to track and get the answer where his package is. So we don't need an army of people on the phone answering customer service calls, right, because this is shooting ourselves in the foot. So you'll see even my 2 B2B guys that are today 96% B2B, those guys over time, maybe over a year, a year and a half, will be maybe, you know, 85, 15. Our Luma's Ghent Power will probably be 70 five-twenty 5 or 70, 30. But still growing top line, but more importantly, growing the bottom line. All right. Thank you for all that detail, Elaine. Maybe just one quick follow-up on July from end market perspective. It sounds like June really was strong and a lot of that's continued in July. Are there any end markets in particular that you're excited about and more concerned about? Or are there any do you think have been pulled forward that are a little bit more of a catch up from the shutdown versus something that was sustainable? So any thoughts on how you're delineate that, that would be appreciated. Well, I think that we feel really, really good about the last 6 months of the year when we look at July. But again, our guidance is always very conservative. I mean, we're in business, in transportation. This is based on what we know today. But I feel really good about our Loomis Canpar. Our P and C guys are doing a fantastic job. LTL, I mean, the market is still depressed, absolutely. So this is why an M and A transaction for LTL would be fantastic. We're working on the costs. We're doing very well on the cost side. We're bringing efficiency. We're bringing new technology in, etcetera, etcetera. But at the end of the day, we're going to need some revenue. And we're not going to chase revenue at 2% bottom line. So for us, on our LTL in Canada, really the solution is find the right M and A, okay, nice fit. So that's going to bring more revenue in, do the sorting of the quality of the revenue and then keep whatever makes sense. So LTL, M and A is key to us and maybe partnership or whatever with some carriers that would make us a lot of sense. Truckload, our specialty truckload, I think those guys are going to be booming. In the U. S, I was looking at our B2C June numbers and July so far. What those guys are doing there under Steve Brookshire and Cameron, Cameron is our U. S. Guy, is really fantastic. What Greg is doing on the van side, it's really nice. TCA's revenue is picking up because of all the plant closure that killed them in April, May June. So we feel good about what we see in the US TL and the U. S. Specialty TL as well. So really, the only areas of concern is always the same, is people. We want our people to be safe because this virus is still alive, is still there. So people is always the big nut that you got to make sure that's not going to crack, right? And in terms of our balance sheet, I mean, very solid. Thank you. Your next response is from Jason Seyal of Cowen. Please go ahead. Thank you, operator. Hey, Elaine. Hey, team. Good morning. Hi, Jason. Could you talk a little bit more on your on the BDC side? I know we're sort of beating a dead horse, but you talked a little bit about maybe changes in pricing. But as this shift seems permanent and as it continues to grow, how should we think about the need for maybe sort of changing some of the operations or maybe even some investments that you might have to make, not say this year, but say 5 years out? Yes. Well, in our logistics and last mile solution, I mean, investment is not really important. I mean, it's not really that much. It's really the sales team and the good people that's going to bring the opportunity. Also, it's a sales team that is able to have customer understand what these guys need to do to be more efficient into their distribution network. So most of the time, if we talk to, for instance, I'm going to say the name Amazon, those guys, they get it. I mean, they understand what we're talking about, okay? So, yes, we cover right now a few markets for them in the U. S. Just to plug some holes because of this COVID thing there. But what we're trying to do is educate our salespeople to really understand, okay, how can we deliver, okay, efficiently, like Amazon is doing, okay, for them. So we're talking to a lot of those guys. So it's really the last mile logistics. We have the solution, okay? It works really well in Canada. It's just that we have to get the solution more known into the U. S. Market. This is like the TFI stock in Canada. It's well known. It's not so well known in the U. S. That's what we're trying also to have people understand better what we do. In terms of our P and C, what we've been doing is, as a first step, we know that B2B will suffer a permanent impairment because of the e commerce, because of this COVID thing. We don't know how much. So we said, hey, guys, if we don't do anything, okay, we will lose 5% or 10% of our revenue. So we have to do something. So this is when we question again our approach to b2c. And because of this COVID day there, okay, our guys really work day and night into coming up with a solution that is is good for our customer and it's also good for our shoulders. So what we've done, step 1 was to replace the B2B that was gone. But now we're doing more than that because our B2B is still not back up to where it was, but our B2C is way more. So this is why if you look at my revenue at Canpar Loomis in July, for example, I'm up 15%, 18%. So and we're doing that profitably. So this is like I said, nobody wants to miss a storm. When a storm comes in, you have to question everything, and that's what we've done. And our perception that, oh, we've got to be careful about B2C. We look at a lot of these guys doing B2C. They don't make any money. That perception, I say, guys, forget about that perception. We got to change that. Let's go back and let's replace this volume in a smart way. And that's what we've done. And when you see our Q3, so far when I look at July, okay, it's a confirmation that our P and C guys in Canada are doing a fantastic job. Our logistics guys and last mile guys under Cal, like I said earlier on the call, now we have a sales team that's been unified under Dean. We've been very successful in Canada, not so much in the U. S. But I think we have the solution now, okay, with the same leadership as we have in Canada, okay, working with the sales team in the U. S, with our knowledge of the business, selling our solution, you'll see us growing that business profitably in the U. S. And if you just look at our margin, okay, in our logistics, slowly it's improving. Yes, okay, we have acquisition that helps the top line. But Donnie was not making any money. So if you ask Al, hey, did you get some help from Donnie in Q2? I said, no, I mean, I lost over $1,000,000 and more in Q2 with the acquisition. But we shed real estate, we shed equipment, we shed customer with gross margin at 2%, not profit, gross margin. And that affected us in Q2. I'm glad to hear July trends are going well. In terms Donnelly, do you think Donnelly can be sort of breakeven before the end of the year as you ship costs? Jason, Donnelly is breakeven now. Perfect. Oh, yes. No, no, no, no. I mean, what has shifted a little bit to truckload? One of your larger U. S. Competitors mentioned that they're starting to see year over year increases in contractual agreements here really in 3Q. Just wanted to see what your experience has been in your current contractual environment? Yes. So like I said earlier, Jason, we saw pressure on the rates, okay, in Q2. Our average revenue per mile dropped a few pennies. And when Greg tells me, hey, I think I'm overbooked now, okay, I've not heard Greg tell me that for at least since 'eighteen, right? So it's just a notion of offering demand. So now the demand is probably more, okay, than the offer. And that's why other carriers, smart carriers, like the one you're talking about, those guys, they're not stupid. They say, oh, okay, like the shippers. The shippers are not stupid either. The truckers call, oh, too much capacity, put pressure on the rates. Oh, smart truckers, phone calls, the shippers are calling. Oh, okay. So less capacity, let's move some rates up. Okay? It's a pendulum. So what these guys are seeing, okay, us, we're starting to see the same thing. But those guys are much bigger than us, more spread out across the U. S. Than us. But to us, I'm telling you that we are right now overbooked for the first time really since 2018. Thank you. Your next response is from Mona Nazir of Laurentian Bank. Please go ahead. Good morning and congrats on the quarter. Thank you, Mona. Thanks. So I'm just wondering, if I'm looking at your quarterly performance and the response to COVID, in order to achieve your targeted cash for 2020, I'm wondering what does TFI look like? I mean, you spoke about the Canadian wage subsidy expectation for the back half of the year. You spoke about the B2C shift in debt. But if I'm thinking about further rightsizing or business combination or anything else, is there an aspect that we need to think through that could impact future performance? If I look at the LTL, really no, because we've done most of the combination that needs to be done. The only thing that we're doing right now is we are moving Quick Track, okay, that was part of the QuickEx group, which is Intermodal, okay, truckload to the west out of Montreal, Toronto. We're moving that to our intermodal specialist, okay, which is Bob McGonigal's group, okay, at the end of this month. From Rick Ashey's group, which Rick Ashi is mostly over the road, so that was this last part of track or rail that was in Rick Ashi's group. So small, it's small, but it's it makes a lot of sense to do that. In terms of truckload in Canada, I mean, our specialty truckload under Steve, I mean, we're doing a lot of consolidation in our footprint real estate. We just bought a new terminal in Woodstock, where we're going to be able to consolidate all of Steve's operation there. And we bought this one, and we're going to be selling 2 or 3 smaller sites in the Woodstock area so that we can consolidate the operation and be more efficient cost wise. So it's the same thing also that we're doing under Steve in our specialty TL. Greg on our US TL is doing the same thing with TCE and CFI and now MCT. It's all over. I mean, if you look at the number of sites that we shut down in the U. S. Through the acquisition of Donnie, I think we shut down 26 sites that we've combined in, okay? And this is why those guys were losing money. As I said to Jason now, I mean, our acquisition of Dundee is not losing money anymore because we did all this cleanup of real estate, equipment, customer that didn't make any sense for us. So it's always ongoing, Mona. There's always project within TFI to be better, to do more with less. It's a religion. That's very helpful. And just lastly and very quickly for me, last quarter you on the call, you provided a snapshot of revenue by division for the 1st 2 weeks of April. And if I'm reading from the MD and A, for example, P and C volumes seem to rebound in June for the June period after being down over 25% for the 1st 2 months. So I appreciate your comments for revenue in the back half of the year being down. I think you said a 5%. But just generally speaking, can we expect the trends, the overall trends from Q2 to continue, albeit the contraction not as extreme perhaps? What we're seeing so far, Mona, when we look at April, May June and then now July is what we're seeing is like it's been really difficult for us in April May in terms of revenue, okay? We were down big time. And now if I talk about the U. S, the reopening of the U. S. Has been way faster. So this is why we've not been affected as much in the U. S. As we've been affected in Canada. What we believe is that now the way we are reopening in Canada solely because if you look at Ontario, they've been really slow, Mr. Ford, they've been really slow at reopening. Fine. But what we're seeing now is that we feel pretty good about the end of the year, okay, both U. S. And Canada. But there was a big question when I was talking to the Board members yesterday about guidance. So they say, hey, Alain, I mean, these are very difficult time to predict what's going to happen because we don't know, is there going to be a second wave? Or is there going to be this? So if you give any guidance, you got to be based on what you know today, okay, and you got to be conservative. So this is why once you once we get to see Q3 after, let's say, in October, okay, we'll have probably a better feel about is there a second wave? Is this thing under control in the U. S? Because right now, a lot of people are saying, oh, it seems like it's a little bit out of control in a few states. Florida is an important state for us, Texas too, California as well. So this is why we have to be careful. And we said, okay, a guidance that we think that is achievable, okay, just so that people have a sense of what we think is doable in 'twenty, but more importantly is 'twenty one. And all these actions that we're taking now and all this M and A that we've done and probably will do more in the next 6 months, okay, this is going to bodes very well for us in 'twenty one. And because of our position with over $1,000,000,000 in liquidity, and don't forget, one of the other motto that Lane has is that you make your money in the buying, never in the selling. So yes, I mean, we have competition on the M and A side in Canada. It's okay. But that doesn't change anything for me because us, we know what we can afford to pay for an asset. And if somebody can pay more, well, he's just going to take over the asset. I mean, we compete with PE in the U. S. All the time, all the time. Thank you. That's very helpful. Thank you. Your next response is from David Ross of Stifel. Please go ahead. Yes. Good morning, Alain. Good morning, David. I wanted to talk a little bit of the truckload segment, specifically the special PTOs, you're looking to grow that out in the U. S. Is there a preference in the M and A strategy for company drivers versus owner operators? Yes. That's a very good question. I mean, if you look at what we're doing in Canada, I mean, we love a mix of 60% to 65% steel or asset versus 30% to 35% non asset. We don't have that, okay, in our USPL operation right now, although our owner operator fleet has grown lately, okay? So what we're trying to do is in that neighborhood, okay? But key to us is really how is the fit. So if you look at Citi, okay, the flatbed operation that we bought, I mean, the fit is fantastic for us because most of the customers of Citi are customer of ours in Canada. So I mean, we're well known, although if you think about TFI in the specialty world of flatbed in the U. S, who are these guys? Well, when we talk to the CT customers, to see, oh, TFI, oh, sure, we know those guys. We deal with them in Canada. Okay. So that one, for instance, was more focused on, oh, customer fit, good fit, small, not too big, a good base, solid base to grow. Okay, let's do the deal. Okay? But we really love, for sure, we love stainless steel. So if you look at our Canadian operation in stainless steel with no subsidy, okay, Dan Roberts that runs our Contran stainless steel operation did better than last year in Q2 with no subsidy, stainless steel. So we love stainless steel. We our dump operation in Canada is the one that suffered the most. In our flatbed in Canada, we did better this year than last year with no subsidy. So really our subsidy came in support of our bulk operation in our specialty TL in Canada and in our Western Canadian operation as well. And as you look across the U. S. Between TCA and CFI mainly, what's the breakdown of spot versus contract now? How do you want that to be longer term? Well, spot Greg Gore is not a big fan of spot, okay? So we've been mostly running a now in Q2, we had more spot than ever because some of our customer were in shutdown or shipping less. So we had a little bit more of spot at the time with not fantastic rates, as you know. But now spots are starting to grow, but our share we've been very conservative. So spot is not the nature of TCACFI. It's always been very small, normally. Thank you. Your next response is from Tom Wadewitz of UBS. Please go ahead. Yes, good morning. Good morning, Tom. Yes, thanks for the question here. The I think you've talked about this a couple of times on the call, Elaine, but wanted to ask a little bit further on logistics. In the P and C, you did see the big step up in B2C business, but it seems like you didn't see that. And I know you talked about kind of U. S. Logistics and sales efforts. What's the mix of B2B and B2C in your overall logistics? And do you think it's reasonable to see a point in the near term when that growth would really step up? Because it just seems like it should be a very good environment for your last mile business to grow given that big step up in demand for B2C. Yes. Yes. You're absolutely right, Tom. The problem that we have faced is that our Canadian team on the B2C, on the e commerce side has done a way, way, way better job than our U. S. Team for a few reasons. Number one reason is that in the U. S, we've acquired some companies that are a fixer hopper. So we've acquired Donny. We've acquired BeavEx. We've acquired Dycom. So the guys really were focusing on integration of these companies over the last year and a half to 2 years. But also their sales force was not really focused doing the right thing growing this e commerce. So our ops guys were focused in digesting all these acquisition, okay? And this is when last year, summer of last year, okay, we made a change in the U. S. So that Cal is our new EVP responsible for the U. S. Cal has done a fantastic job with the Canadian team into growing our e commerce solution big time in Canada. So I said, yes, we're going to do the same thing in the U. S. So our first approach was, okay, where's our problem? Besides the fact that we have our operational guys really involved into integrating those 2 or 3 acquisitions that brought us some revenue, okay, and we got to turn that into a profit. Besides that, we said our sales team is really weak in the U. S. They don't just they just sell something like it was good maybe 15 years ago. So our approach has been, you know what, let's bring Dean, ourselves leader in Canada, because we have similar customers. It's like I was talking about our flatbed operation in Canada and the U. S. Now, we have common customers. So let's bring Dean. And Dean has been involved in the sales team for the last 6 months, rebuilding the sales team, having those guys focused on the right thing, selling, okay, what makes sense, not being jack of all trades and master of none. And that's when we talk to guys, hey, the potential is huge in the U. S. Our solution is second to none, well, same as Amazon. But it's just we're not known. So we need to push the sales team to get our solution out, right? And this is what Dean has done in Canada, okay, very successfully. And this is what Dean is going to do with the U. S. Team in the U. S. It will take some time. But for sure, they know and they understand what the mission is all about. Okay. So it sounds like you got a lot of optimism, but it's now like next quarter, it's over kind of multi quarter basis that you expect to see stronger growth out of U. S. Logistics? I think so. I think so. It's a culture change in the U. S, okay? It's guys, we're not jack of all trade, master and none. This is our focus. This is the area that we have to sell, etcetera, etcetera. So it's a change of culture. It's also a change of culture that, guys, when we bought Dynamics like 6, 7, 8 years ago, the culture was, Oh, 2% is great. Well, no, it's not great. So if you look at the profitability of the U. S. A year ago, okay, it was better than 2, but it was not 10. Okay. So we've improved talent and esteem over a year. Even adding revenue of poor profitability that we have to improve, we've improved the bottom line by about 30% to 35%. But we're still not at 10%. But we're going to get to 10%. And at the same time, we're going to grow this e commerce business, which can be very profitable in our T Force Logistics model. And your next question comes from the line of Cameron Doerkington with National Bank. Thanks. Good morning. Good morning, Cameron. So just one very quick one for me. I'm just wondering, given the strong free cash flow performance, good liquidity, leverage ratio very low, just how you're feeling about the NCIB these days? Well, NCIB, we've done a little bit of NCIB in Q2. And NCIB has always been balanced with M and A and debt and free cash flow. So free cash flow is very strong. Debt is low. So normally, NCIB should be very important for us unless there is some significant transaction on M and E side. So this is why I said guys stay tuned during the course of the next 6 months, I mean, you'll see if there's no big whale, there's probably going to be more than CIB. Okay. That's great color. Thanks very much. Pleasure, Cameron. And your next question comes from the Elaine, just maybe talking about your confidence in the earnings power moving to 'twenty one. Maybe can you just talk about the duration that you see the U. S. Trucking cycle can take from here? And maybe perhaps how long you see the current tightening of that truckload capacity and inflection in pricing blasting? Well, what we've seen so far, I mean, it's a little bit of a surprise, okay? What we've seen in June and so far in July and when Greg called me and said, I think we have to get the CapEx back because we feel really, really good about where the market is going. This is when we're talking to some of the guys in April May in our P and C, even if you look at UPS' comment, well, this is Christmas in the summer or in the spring, right, because they have so much volume. On the USTL side, it seems like there's more demand, but also the offer has come down a little bit. I don't know if it's because people don't have the capacity to add trucks. Is it because there's some people that just because it's too they feel it's too dangerous to be a driver, okay. They just said, I'm going to stay home and get the $600 okay, of the unemployment, additional to unemployment. There's probably a little bit of shrinking of capacity, at the same time, a little bit more demand, maybe a little bit of the effect of more on shoring, okay, to Mexico or to the U. S. But our policy is really what's going on, okay? It seems like, wow, it was unforeseen. If you ask me 6 weeks ago, okay, you think that you guys are going to be booming? And on the USCL, I said, no, I think that we'll stick probably like minus 5, minus 10. But now really, I mean, the pressure is on and the guys are busy. Great. That's helpful. And maybe just going on from that point, you mentioned the effect of bond sharing and you've mentioned Nextel a couple of times. Can you remind us of what kind of exposure you guys do have to Mexico outside the U. S. And Canada? Or is that and which business that mainly comes within? Yes. Our exposure to Mexico was through CFI, a little bit TCA, but mostly CFI through our logistics company that is based in Mexico, although very small. And we run also about 20%, 20%, 25% of our revenue at CFI is with the international trade between U. S. And Mexico. But we're not heavy into the automotive business. I mean, we do some of that, okay, but we're not that heavy in that type of business. And your next question comes from the line of Michael Goldie with Bank of Montreal. Hi, Len and team. Thanks for taking my call. Can you give us a bit more color on LTL demand month by month throughout the quarter and where it kind of stands in July, in particular to June? Yes. So we are doing better in July than in Q2, but it's still down, okay? And I think that there's in LTL, there's a permanent impairment that comes from our customers that are in the mall, the brick and mortar guys. So what we're seeing with the B2B in the P and C is less, much less than the LTL. Don't forget that the industrial LTL that exists in the U. S, I mean in Canada, industrial LTL is like, wow, it's been 20 years now that we don't have much of that. I mean, it's most of the plants are closed. So it's mostly retail in our LTL world. And the retail has been affected badly by e commerce. So this is why the way we see the LTL in Canada is that unless we do some M and A, okay, our revenue is going to shrink organically, absolutely, because of this e commerce that is really taking a bite at the brick and mortar guys, right? So that's why we put a plan a year ago, 2 years ago, we bought NFF. Those guys were $80,000,000 when we bought those guys, but they were losing 8. So today, NFS revenue is about half of what it was, but they're not losing money. They're making more than 10 points on the revenue that's left. So that's what has been the culture. So we have to feed our Canadian LTL. So we're having discussion, okay, with a lot of people about how can we beef up our Canadian LTL. And maybe within the next 6 months, you'll see some positive news, okay, about the LTL. But one thing is for sure in my mind, if you don't do anything, okay, the LPL market is shrinking in Canada because of the e commerce. Okay, perfect. And can you, if possible, give us some color on the 3 acquisitions, kind of annualized revenue and EBIT run rate, if possible, that you did in June? Yes. So GOSCO is small. It's only $30,000,000 Okay? And the U. S, the 2 U. S. Ones, okay, coming out of Comcore are about the same. It's about 200 trucks each in USD. So it's very small, okay? But GOSCO, the beauty of GOSCO is that we see a lot of synergies with our PNW operation that we run today. So Mark has done a fantastic job at PNW. But now adding the GOSCO in the family is going to be a fantastic combination. We see a lot of synergies there. It's going to take us a little bit of time, but potential there is huge. The 2, U. S. 1, I mean, Citi, I said it, I mean, it's fantastic because we have common customers between U. S. And Canada. So although we're not known in the flatbed business in the U. S, but most of the customers within CT knows us because of the Canadian operation. So we see a lot of potential. This was a company that was going to bankruptcy court thing there. The price was very attractive for both assets. And I think we're going to do well. MCT was an hybrid dry van and reefer. The early discussion that we're having with Greg is that the intention is to have more MCT, more in a specialty kind of reefer carrier. So we bought in that deal a location in Florida, in Central Florida, which is the base of this kind of reefer operation because we do greeneries there. So it's going to be a nice addition to CFI when they sit down with customer to have this kind of specialty division. If you look at one of the best carrier, truckload carriers in the U. S, they offer both dry and refer to their customer. Okay? Those guys have done a fantastic job. So I mean, us, we always look at the best, okay? And in our US TL, okay, we believe that the MCT acquisition for CFI is going to be some kind of a nice diamond in the rough that Greg and his team will have to polish. And at this time, there are no further audio questions. Okay. Well, thank you very much, operator, for helping with the call. And thank you, everyone, for being with us this morning. We at TFI International very much appreciate your interest. And all of us will continue to work hard to create value, unlock it for our investors and whenever possible return excess capital to shareholders. So I look forward to updating you soon. And if have any questions, please do not hesitate to reach out. Thank you again, and have a great day, and stay safe. Thank you. And thank you. Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.