TFI, which offers LTL, truckload, and courier services in Canada, will now own the sixth-largest US LTL trucking company.
The US$800 million sale, which involves rebranding as TForce Freight, also comes with a five-year service agreement that will ensure UPS Freight will continue to use UPS's network to fulfill package shipments.
Satish Jindel, president of transportation research firm SJ Consulting Group, said the sale would be beneficial for both UPS and good the American LTL market.
For TFI, the sale vastly expands its US presence, something the company has been building through acquisitions for more than a decade. Its US truckload subsidiaries include CFI and Transport America. Now it will have a major LTL presence throughout North America.
'Our strategy of operating independent business units with a high degree of accountability is well-suited for building on UPS Freight's strengths and improving margins over time,' said TFI chairman and CEO Alain Bedard.
Ninety per cent of UPS Freight will operate independently within TFI's LTL business segment under its new name. 'This transaction is a 'win-win,' allowing TFI to continue our strategic expansion across the US,' Mr Bedard said.
The acquisition 'will vault TFI International to one of the largest North American LTL carriers,' he said. 'We see compelling opportunities to improve TForce Freight's efficiency and productivity and apply our proven business model to drive long-term value creation.'
TFI owns nine over-the-road LTL carriers in Canada, including TST-CF Express, the combined operations of the former TST Overland Express and Canadian Freightways. In 2019, the company's Canadian LTL operations took in a collective C$902 million (US$707.67 million) in revenue.