Good morning, ladies and gentlemen. Thank you for standing by. Welcome to TFI International’s First 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. Instructions for entering the queue will be provided at that time. Before turning 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. Also, last year, the company adopted the new accounting standards under IFRS 16, and as result, certain numbers are not directly comparable with past results. Lastly, I’d like to remind everyone that this conference call is being recorded on Wednesday, April 22, 2020. I will now turn the call over to Alain Bédard, Chairman, President and Chief Executive Officer of TFI International. Please go ahead, sir. Alain Bédard: Well, thank you for the introduction, operator, and I appreciate everyone joining us this morning as the world continues to navigate through these unprecedented times. Yesterday, after the close, we released our first quarter results. And if you need a copy of the release, please visit our website. As we have previously communicated, our utmost priority since the start of the COVID-19 pandemic has been the health and well-being of our employees, our customers and the communities we serve. In early March, our senior executive team came together to strategize and establish guidelines for our operating – for our operations during the coronavirus and pandemic. Following their guidance, TFI International has been handling the ongoing crisis well, and I believe that we will emerge even stronger when economic conditions return to…

Certainly. [Operator Instructions] Jason Seidl with Cowen. Your line is open.

Thank you, operator, and good morning, Alain Bédard. [ph] Alain, I wanted to start off asking a question about is now I know, CFI itself doesn’t have a large exposure to energy. However, as the decline we’ve seen in oil prices starts to flow through and hit the Canadian economy, is likely going to free up a lot of people are used to hauling energy and energy-related goods. Is that going to throw a lot of capacity out there to the marketplace in profit? Alain Bédard: Yes. Well, Jason, our exposure to energy is really, really small. I mean, we have a small operation that’s left for us in Texas of P&D Odessa market, but this is really small revenue for us. And we’re still very present in Alberta with our LTL and to a certain degree in our specialty TTL. But really the service that we provide with the energy sector in Alberta or Saskatchewan is very, very limited. I would say that today, energy is very small component of TFI’s revenue. For sure, if you look at Alberta, I mean, the province has been slapped with the double whammy. It’s got the oil situation and it also has the virus like everybody else in the world. So our LTL has been affected probably the same as the rest of Canada. If we look at our specialty truckload, it’s been affected a little bit more than the average that we see on the East Coast, Ontario, Quebec.

Okay. And speaking about the LTL, obviously, there’s a lot of operational leverage in that model over the past couple of years… Alain Bédard: Yes.

…TFI has really taken the approach to sort of streamline its network, get it as slim as possible. Alain Bédard: Yes.

Is there anything left to do there? Are there any other small terminals to close down? Or is it sort of just your – where you’re adding it right out the storm here? Alain Bédard: You know what, Jason, this is a very good question and absolutely. I mean, we will be – two years ago, we’ve combined TST Overland with Kings Wind East, okay, and that was a major transaction for us and it saved us a lot of dollars. Because you have to understand that on the Canadian side, the LTL is shrinking every week, every month because of the e-commerce and now virus is just one more, okay, that’s just not helping us. So what we are planning and this is going to be taking effect at the end of April is that, we’re also now doing the combination of TST Overland, okay, with our CF operation, two great names in Canada. CF was only a regional player covering Western Canada and TST Overland is a national carrier. So as of the end of April, okay, that’s one more move that we’re doing to streamline and be more efficient. So I was just looking at the equipment. So we’re going to shed about 200 to 300 piece of equipment in terms of headcount. I mean, headcounts will be down significantly because of that, because we’re getting ready, because this LTL keeps on shrinking. So there’s no other options for us in Canada that we have to adjust to the volume. Now for sure, as soon as we can, okay, we’ve got some targets in mind. We’re also talking to some people, because a lot of people in the LTL business in Canada are not making money. Because they have the same problem as us is that volume is – keeps on coming down and they don’t know what to do. Us, we have a plan, so our plan is always put in place and we adjust and we cut and we – and we have to live with the market condition. And our focus is always about serving customers, but we have to make money.

Yes, that makes sense. And real quick before I turn it over to somebody else. What’s the average age of your Truckload fleet now in the U.S.? Alain Bédard: In the U.S., I would say at the end of March, I mean, we’re just under two years of age. So this is why what we did on the CapEx side on the U.S. talking with Greg and the team there, and David, as we said guys, I mean, our fleet is so new that we can afford. So what we’ve done in the U.S., we’ve cancelled the CapEx for everything that was not committed. So probably, what we’ll see is, we still have some CapEx coming in for U.S. TL in Q2 in terms of trucks and trailers. But after Q2, everything has been cancelled. So this means, if I remember correctly, about $60 million net CapEx that will not be done in 2020 for U.S. TL, Canadian dollars, though. So I mean, you put that in U.S. is about, let’s say, US$40 million, US$45 million.

Okay, perfect. Listen, Alain, I appreciate the time as always and be safe out there. Alain Bédard: Thank you, likewise. Thank you, Jason.

Mona Nazir with Laurentian Bank. Your line is open.

Good morning, and thank you for taking my questions, and congrats on the quarter in a challenging environment. Alain Bédard: Thank you, Mona.

So my first question is just a clarification. So for LTL, did you say the last two weeks of March was down 17%? Alain Bédard: You know what, let me just check, because I think so. I think so.

Okay. Alain Bédard: Yes, yes.

Okay. Alain Bédard: …17% down. Yes.

And then in the first two weeks of April, sorry? Alain Bédard: About 39% down. Now…

39%? Alain Bédard: …what I have to add on that, Mona, is what we’ve seen really. If I look at my first week of April, okay, versus my second week of April, now I’ve got my third week of April, because April for us is three months – is five weeks. So when I look at that, I see a trend that this volume, okay, was really, really down the first week and a little bit less than the second week, a little bit less in the third week. So I think that right now, we’re probably – until the government decide to reopen businesses, I mean, we’re probably just improving a little bit week-by-week. The same thing with our P&C. P&C, the first week, it was a disaster. I mean, bang, whoa, and then it start to drop even more. So the first – the last two weeks of March, okay, because they announced the closing. Okay, we went down, down, down then the first week of April again, even down more. And then whoop, the second week of April backup a bit and then the third week of April, we’re starting to see up a little bit. So this is why if I look at my P&C, as an example, two weeks ago, for the first two weeks, I was down like 40%. Now after three weeks, I’m done only 30% year-over-year.

Yes, that’s helpful, because I was just looking even at the quarter, I mean, LTL shipments were down almost 17% in the quarter. Alain Bédard: Yes.

But just given that margins improved significantly, I was just wondering if it was safe to assume that the majority of that decline was driven by a reduction in lower-margin business? And if that, in fact, is the case? Alain Bédard: Yes, some of that is true.

Yes. Alain Bédard: Some of that, Mona, is true. Yes, yes.

Okay, okay. Alain Bédard: Yes.

And if we’re just adding up the steps that you’ve taken in regard to reducing executive compensation, reducing office staff to four days a week for lowing some P&C staffs to preserve capital. I’m just wondering, combined, what kind of an impact can all of these items have on OpEx? Alain Bédard: Yes. Well, that’s a very good question. And you know what? This also depends on the level of volume that we have. But one thing I could say is that, we’ve revised. I mean, we are – I’m monitoring our P&C by the day now, okay, the same thing with LTL, the same thing with our U.S. TL, I used to monitor by the week now or by the day. What I could answer on that is that, a lot of people were scared that TFI would lose money even in Q2, because all will be about – we’re not going to lose money in Q2, that’s for sure. I can’t give any guidance. But what I could say is that, all the steps that could have been done, okay, and we’re following information and tools and data by the day in every business that we have a huge drop, like our P&C and our LTL. And my U.S. LTL, the reason that we’re checking that by the day now is, because that’s the most capital-intensive business we have, right? Because my Canadian truckload or specialty truckload is not as capital-intensive. And yes, my van division has been affected, my specialty truckload, as soon as an example, the construction in Quebec has been shutdown. The mining has been shutdown. So now, they’re starting to reopen that and already we’re starting to see some improvement in our specialty truckload and Canadian truckload. So really, our focus us right now, okay, is really our P&C or LTL and our U.S. TL that we monitor by the day, okay? Now to answer your question, your original question how much – what’s the quantum of all that? I can’t really answer that, Mona. I don’t know the numbers. But what I can tell you is that, we are monitoring that by the day. We’re comparing year-over-year, day-over-day, comparing, let’s say, for instance, our labor costs used to be 12%. So are we at 13%? Are we at 11%? Where are we at? And we’re doing that for all, like I said, the LTL, P&C and U.S. TL.

Okay, perfect. And just lastly, for me, I understand that M&A may be temporarily on hold just given due diligence is challenging on third parties at this time and you want to preserve capital. But when the M&A tap turns back on, I’m just wondering what can expecters invest expect – what can investors expect? Are you going to be sticking to your current verticals? I know you just touched on LTL. But is there any scenarios, where you would look outside of current activities? I know in the past, for example, you said that your waste business was a gem? Alain Bédard: Yes, absolutely. Now you see, Mona, what – the minute we could do M&A, again, okay, which may be in Q3, depends on what April and May looks like. But we will start really which one small tuck-in deals that we’ve been working on for the last few months and we put on hold. So that’s how we’re going to start M&A, and it’s going to be either in the U.S. or in Canada. But these will be small deals, nothing major. We were working on significant size deal prior to the – this virus thing there. But we were not going to do any major deals in 2020. It’s too risky, okay, not knowing how long this virus going to be with us for, maybe it’s a year, maybe it’s 18 months, nobody knows. So this is why anything of size won’t happen probably until 2021. But I would tend to say that small tuck-ins we could do in Ontario, for instance, I think that there’s a probability that we could do that in Q3 or in Q4 of 2020. So we have ample of files that we’re looking at right now. And don’t forget, if we are in a difficult position, because revenue just disappeared because of this virus, I mean, everybody else in the same boat. I mean, we’re all on the same ship. I mean, the market is difficult for everyone. Now, the strong like TFI, that’s got the balance sheet, that’s got the team, because don’t forget, you need the team to do all this M&A. You need a solid, solid operational team to take over a company and just integrate like we’re doing in the U.S. right now with Donnelley, okay, sure. The guys will say, “Well, Alain, you got $5 million of profit in Q1 that comes from that deal?” Yes, because we buy at the right price. So what’s the problem with that? And then you’ll see Donnelley as an example, okay? It will help us grow our Last Mile Logistics business in U.S. with all the nice vertical, like healthcare, for instance, or e-commerce.

Thank you. That’s very helpful. Alain Bédard: Pleasure. Pleasure, Mona.

Jack Atkins with Stephens. Your line is open.

Hey, Alain, good morning. Thanks so much for taking my questions. I really appreciate it. Alain Bédard: Pleasure.

So I guess, just to kind of start off here with a couple of higher-level questions, but I know you’ve seen a lot over the years. I know you’re a young man, but you’ve seen a lot over the years. So I guess, I’d be curious to get your take on sort of how you think what we’re seeing right now from COVID-19 pandemic? How does that structurally change the transportation markets in the U.S. and Canada, as we look out over the next couple of years? And sort of how do you want to position TFI to really capitalize on that? Alain Bédard: Well, that’s a very good question. And Jack, we’ve learned from the lesson of 2008, 2009 as TFI. If you go back and look 2008, our revenue dropped about 20%, our EBITDA dropped about the same, but we were way more capital-intensive than we are today. Our balance sheet was not as strong as what it is today. And that’s one of the things that we’ve learned from that crisis then. If you look at this crisis now, okay, and you look at that and you say, “Well, Jesus Christ, this is really the first time that we have shutdown everything just overnight, just overnight, okay, the government decided that for health reason, okay, well, this has got to shutdown, boom, goodbye. So our B2B has been affected. And what we learned from that, okay, if we look in the future, I think that this – the consumer, okay, was slowly moving towards more and more e-commerce slowly. I think that this is going to be a catalyst, okay, for those guys to slowly even know not as much slowly, but further probably a little bit faster into more and more of this e-commerce thing, because…

Well, that’s great to hear. And I guess, just to follow-up on that. You guys have a great track record of free cash flow generation that continued in the first quarter. We’ve been hearing some anecdotes over the last couple of months that shippers have been trying to push back on payment terms, as they look to sort of hold on to cash, everyone is trying to hold on to cash as much as they possibly can. Have you guys seen that? How are you responding to that? How are you thinking about free cash flow generation this year more broadly? Alain Bédard: Yes. Well, for sure, there’s some customers that always try to hide and give you the excuse, so just to delay their payment. But as we’re very strong on that, and I’ll give you an example, there’s a huge mining company in Canada that those guys had all kinds of issues with their IT system. That’s always a good excuse. And we say, guys, I mean, we’re not a bank. I mean, we’re not a bank, so we can support you guys. It’s a huge corporation and an international corporation. So finally, we’re able to get payment, because we said, guys, if we don’t get the money, you guys don’t get the trucks. So that’s always been our approach, Jack. I mean, in – when you do a transaction with a customer, I mean, we agree on price, we agree on service, but we also agree on payment terms. And every – everything in that agreement has to be respected.

Makes total sense. Well, thanks again for the time. Alain Bédard: It’s a pleasure, Jack. Take care.

Scott Group with Wolfe Research. Your line is open.

Hey, morning. Thanks for the time, guys. So can I… Alain Bédard: Pleasure.

…clarify the April updates that you gave that were helpful. Was that volume or revenue? And if that’s revenue, is that with or without fuel? Alain Bédard: Yes. No, I’d say, excluding fuel, and this is revenue.

Okay. And is there any way on the – so the P&C, that’s, I think down 30% in April. Can you just help us think about what trends you’re seeing specifically B2B versus B2C? Maybe just remind us of the mix of B2B versus B2C for you there? And then anything that’s notably different between the Package side and the Courier side? Alain Bédard: Yes. So if you look at our P&C, you could split that in two. So you’ve got Loomis and Canpar, okay, and you got our specialty kind of P&C, which is ICS and TFIS. So if you look at TFI – TFIS and ICS, those guys are niche B2B carrier. So those guys are way more affected, okay, than the Canpar/Loomis, why? Because Canpar/Loomis has also B2B, but it also has a significant content of e-commerce. Where – whereas if you look at TFIS and ICS, they’re basically very, very little e-commerce in those two divisions, because these are specialty carriers like, as an example, ICS is very heavy with the insurance world, very heavy with the optical world, dental and all that. So it’s really, so all the dentists, all the optical boutiques are closed down. I mean, ICS is just that, okay. So that’s the big difference between the two. So you’ll see, if you say 30% down, okay, in early April, well, that means that those specialty guys are like closer to 50% down, okay, and the other guys are closer to 20% down, because they have more e-commerce and less B2B exposure than the other one.

So is it fair to think then that the – so within the down 30%, that the B2B, maybe to your point, is down in half and the…. Alain Bédard: Yes. Oh, absolutely.

B2C in e-commerce is – okay. Alain Bédard: Yes, sir. Yes, sir. Absolutely, because with all these shutdown, I mean, think about all the malls, they’re shutdown completely. So all your customers are closed. So that’s why our B2B, okay, has been affected so badly in our niche carrier like ICS and TFIS.

What are the implications on margins for that segment? I know you said, “Hey, don’t worry, we’re going to make money this quarter.” But can that segment – can the P&C segment make money in this kind of environment? Or is there anyway to think about margins in that quarter right – margins in that segment right now? Alain Bédard: Well, we look at our forecast – our re-forecast and our re-forecast is, we’re not losing money in any of our sectors, okay, in Q2 based on what we know after three weeks of operation in April.

Okay. Alain Bédard: So we’re not going to be an 18 point EBIT, okay, P&C in Q2, it’s impossible, but we’re not going to lose money.

Anything more directionally you think is worth thinking about? Is this a mid single-digit kind of business right now for the time being, or could it be a little bit better? Alain Bédard: Yes, I would say so. I would say so. I mean, it all depends, based on what we know so far. But also when I look at the trend and that’s what I was saying earlier, okay? There’s a little bit of improvement in our trend. So we really took a major hit in the first two weeks of April. It was really a while, where are we going with that. So we – now, I think we found some kind of stability, okay, and slowly, we’re picking up again. Because if you look at the the virus in Canada, I mean, Quebec has been affected so badly, it’s terrible and then you’ve got Ontario. But if you look at the western provinces, we believe that those provinces will reopen faster than, let’s say, Quebec. Quebec were probably very slow, because they got so much virus in a case, they have more than 50% of the cases in Canada right now. So Quebec will be slow. But the West will probably be the first areas in the Maritimes to reopen slowly. So based on what we know, okay, and not forecasting a lot of improvement in Q2 in May or in June, P&C will be something in the 3% to 5% probably. But this is not a guidance, this is an opinion.

No, no, I get that. And then just last thing, I – you gave us the Truckload sort of CapEx, how much it’s cut. But in aggregate now, what’s the CapEx budget or plan for the year? Alain Bédard: Mid CapEx is probably going to flow around between $80 to $100 million net CapEx, net of disposals, which is about half of what we normally do.

Yes. Okay. All right. Thank you for the time, guys. I appreciate it. Alain Bédard: Pleasure.

Tom Wadewitz with UBS. Your line is open.

Yes, good morning. I think following on… Alain Bédard: Good morning.

…yes, good morning. Following a little bit along the lines of the questions and topic you just had, what is the B2C, B2B mix in the P&C business? And as you look at that and your comments on acceleration in e-commerce, do you say, well, maybe before we wanted to be stronger on B2B, but we kind of review the structure and change the strategy a bit in terms of how we look at B2C, even if it’s a lower-margin business and kind of core B2B? Alain Bédard: That’s a very good question, because let me explain you our philosophy. Our philosophies are next-day service, okay, which is Canpar/Loomis, TFIS, ICS, which compete with UPS, FedEx and Puro in Canada. Our focus us is, yes, we’ll do e-commerce, but not so much. Where it makes sense and where our margin could be as good as the rest of our business, why? Because us, we have a solution that nobody has, which is our Logistics and Last Mile and this is really the best tool. This is really the efficient way in huge, high-density areas like, let’s say, in Canada, Toronto, Montreal, et cetera, or New York, Chicago in the U.S., LA, Houston, Dallas. So our solution is really the same kind of solution that the big e-commerce guys is using to service its customer, way more efficient, way more effective, less capital-intensive, because we don’t have the conveyors, we don’t need those conveyors, because everything is done, the sorting is all done at the customer level. So that’s why – going back to your question, our P&C business, the focus, it will remain on B2B. And I agree with you that may be B2B will get down – the revenue will slowly get down because of this move of e-commerce. But we’re also replacing some of that business with e-commerce that makes sense, okay, that we could do in our next-day service. What we’re trying to explain to our customers is the guys, we offer another solution, which is our Logistics and Last Mile, okay, which is really good. But you need like the other guys like Amazon, you need warehouses. And if you don’t have warehouses, it’s very difficult to do, okay, what Amazon is doing, okay?

So I mean, it sounds like it might be fair to say this, if there’s a big acceleration B2C and e-commerce and it’s more on a structural basis that that’s kind of bad news for P&C to some extent, but it’s really good news for your Last Mile business. Is that fair, that it’s kind of parcel… Alain Bédard: Yes.

Yes. Okay. Alain Bédard: Yes. This is exactly what I’m trying to say, okay. And when I talked to Kal, our EVP in-charge of our Logistics and Last Mile, said, guy, Kal, you’ve got a diamond. You’ve got a diamond in the rough. And the only problem is that, people still don’t understand what we can offer. They understand the Amazon solution, okay, because Amazon is fully integrated now from warehousing to distribution. In us, we’re not in the warehousing business. We’re just talking to some customers and say, “Guys, if you have this kind of distribution network, we could help you on the e-commerce.” So we’ll take time. But we have this solution that is, it’s unbelievable what we could do with that. It’s just – it will take more time. But the e-commerce because of this virus will accelerate absolutely. So it will be to the detriment of the B2B in the P&C side for us or for Puro, for probably FedEx and UPS, we’ll see that soon. And it’s probably going to be some kind of permanent kind of impairment of the B2B because of what’s going on.

Right. Okay, that’s great. That makes a lot of sense. One other question for you. Your strategy is differentiated in terms of the aggressive use of independent contractors and obviously that – it’s a component of your focus on cash. I know there’s some cyclical aspect to attracting ICs and you can probably attract, whether it’s drivers or ICs, or whatever, I would think, easier in this environment. Do you look to make potentially structural changes on the mix? Do you say, well, this is an opportunity, if we were – I’m not sure the number in a specific business. But if we were 40% IC, 60% company driver, now we want to go to 50-50, or we want to flip it and go 60-40? Or do you look at the market and just say, hey, we like our mix of IC and company driver and this is just cyclical stuff that doesn’t change the kind of structural kind of IC versus company driver mix? Alain Bédard: Yes. Very good question and you got to different – look at it differently either if it’s a Truckload operation or if it’s a P&C and LTL operation – P&C and LTL operation. It’s a model that’s very easy to run with owner operator. Why? Because it’s easier, okay, easy to find. The guys are happy, they have their own business, their home every night, et cetera, et cetera. So that’s why if you look at our P&C and LTL, I mean, our mix is very, very high on the owner-operator model. On the Truckload side, I mean, it’s more difficult – even in the U.S., it’s even more difficult, okay? Because a lot of those guys don’t make any money, because there’s in the U.S. a lot of pressure on race with customers. The customers are smart. They feel that oh, there’s an overcapacity, because the truckers bought so many trucks in 2018, because they thought that this would be a fantastic year for the next 15 years. So they bought thousands of trucks, and now the race are the ship, so those four owner operators are just dying. So to answer your question, I mean, Truckload for us a mix that makes sense is 65% asset and 35% non-asset, which would be either logistics or owner operator. But if you look at our P&C and LTL, it’s completely the opposite. So there, you you will see us running a 30% asset and 70% non-asset.

So that that’s the mix, but you’re saying the mix doesn’t necessarily change for you as a result of the current condition? Alain Bédard: No.

Right. Okay. Thank you for the time. Alain Bédard: Pleasure.

Ken Hoexter with Bank of America. Your line is open.

Hey, good morning, Alain and Dave. Alain Bédard: Good morning, Ken.

Just want to follow-up on the – I guess you have great insight, given your multiple segments, and I get what you’re saying on the down 30%, down 50% kind of difference depending on the segments. But where do you look first, given your multiple views into the market, your touch points to see the trends as you prepare for the reopening.? Where do you expect to see that, that kind of the signals first within your different endpoints? Alain Bédard: I think that, where we’ve been affected the most, okay, which is our P&C and LTL. What we’re waiting the signal is that, at one point, they reopen the shops, the malls, that the retail business, because this is really killing our B2B business. So that’s why we’re monitoring that by the day. About three weeks ago, I said when I looked at the sharp decline in our revenue in our P&C, I said, guys, I mean you guys monitor that by the day, but us, it’s by the weekend and offers, it’s got to be done by the day. And we monitor the labor cots, the owner operator costs, the staff costs and all that. So for us, the other thing also that we’ve implemented is, it kind of bring back the employees with a support deal. So if an employee has been laid off and when he comes back, let’s say, he comes back after 12 weeks, so we have a program in place that he has got an incentive to come back. So if I remember correctly, the first four weeks, we’re supporting this guy with $100 a week. After four weeks, we go up to $125 for the next four weeks, and then we go to $150 a week. So let’s say, the guy has been away for 10 weeks, so he has got an incentive to come back to work when we call him back. So he is ready to come back, because over and above that, he has got his job back. He is also having a kind of a bonus to come back, too, and pay all the bills that he has been stuck with because of this pandemic.

Great. And then, you kind of gave some thoughts on your margin outlook for the P&C. You just kind of gave that the mix change on the Truckload side, given trying to stay asset-light. But what kind of margins do you anticipate seeing on the Truckload side? Alain Bédard: It depends. If you look at our U.S. TL, I mean, if we look at our reforecast for Q2, like I said, we have no sector that’s going to be losing money. Now, are we going to be able to run at 94%, 95% OR? So far, what we see is our OR in Q1 has been deteriorated by about 100 basis points, right? If you look at, I think, we did 93.4, and the year before we did 92.4, so 100 basis point deterioration year-over-year. Now, can we think that in Q2, can we see a 500 basis point deterioration? Maybe. What I’ve seen so far from the other U.S. TL is that, in Q1, some of them have deterioration of 150 basis points or even more. Not a lot of that have been coming out so far. So, the target is always not to lose money and this is an utmost priority. It’s very early in the game, because we have only three weeks experience in April. But what I could tell you is that, if you – if we look at our model, none of our division are losing money and even our U.S. TL is not losing money. Based on what we could see, we lost some customers because of closure like Packard, for instance, but we also have customers that are doing three or four times more like Clorox. So our revenue is down. Yes. It’s more down at TCE than CFI because of our dedicated business, for instance, Mercedes has been shutdown, but they are reopening, okay. So all in all, it’s – that’s why we’re not giving guidance, because it’s such an unknown environment. But the only thing I could say is that, the guys are working really, really hard and we’re not going to be losing money in Q2 or any other quarters, I mean, in all of our divisions and each and every one of them.

Appreciate that. And then just real quick, I guess, to wrap up. Are you seeing any differences in your Canada operations versus U.S. in general in terms of how you’re handling the impacts? Alain Bédard: Well, when we look at the Canadian operation in our Truckload sector, I mean, where we’re really affected is our flatbed because of the steel. If car plants remain shutdown for months and months, because there’s no demand for cars in Canada. I mean, it’s really our flatbed business has been affected. We don’t have any flatbed business in the U.S. So we’re not in that business. So – but the rest of our business in Canada, it’s fairly, it’s down, but it’s not down as much as our flatbed business.

All right. I should pass. Thanks. Alain Bédard: Pleasure, Ken.

Konark Gupta with Scotiabank. Your line is open.

Good morning, Alain, and thanks for taking my question. Alain Bédard: Good morning.

I hope you’re keeping safe and healthy there. Alain Bédard: Yes, we are.

Thank you. That’s very good to hear. Yes. So I just wanted to ask you first on pricing. So it seems like, as you noted in the financials, the pricing has been positive in Q1 and most of the segments from negative in Q4. So first, like what cost the pricing done like that? And then how do you see the pricing trends in the first two weeks of April or three weeks of April? Alain Bédard: Yes. Well, if you think about our pricing with our LTL, for example, I mean, our pricing improved, it’s not because the market has improved in terms of pricing. It’s just because we’re getting rid all the time of low-margin accounts. So this is why by getting rid of all those guys that don’t want to pay the fair price, it improves our average revenue. So LTL, it’s not a pricing power that we have. It’s just that we’re cleaning up again and we always find those situation, whereby a customer who tried to take advantage of a trucking company. If you look at our P&C, okay, it’s more like the average weight or the coincidence of delivery, rates are fairly stable. U.S. TL, our rates are a little bit under pressure, not so much,. Okay? But what we see probably in Q2 is that, we’ll have probably a little bit of pressure on the rates in the U.S., not so much in Canada so far. So, the way we’re going to win this war with this virus, it’s about costs and it’s about volume. Now, the focus has always been at TFI that we service customers where we can make money. So get rid of all those guys where we – you lose money or you make two points. So it’s – this is why we’re so light in assets, and this is why return on invested capital is so good is, because we focus on that all the time. Now, the problem is, when you have B2B shutdown, like 50%, you lose business, you lose volume that are highly profitable. And there’s nothing you can do about that except adjusting your cost base. Hopefully, when those guys reopen within the next few months, I mean, we’ll be back on business. But, like I said earlier, on the P&C side, long-term – medium to long-term, we’ll probably see either flat or some reduced volume. But that is – will be for TFI to the advantage of our solution, which is our Last Mile and Logistics, already we see that. I mean, our Logistics division in Canada is up. If you look at our revenue so far in Q2, we’re up, okay, that’s basically the only division that we’re up year-over-year, excluding M&A.

Okay, that makes sense. I see. Thanks for that. And I think you obviously gave the – gave us a pretty good color on how the revenue relates have trended in March and April. So thanks for that. Just wanted to understand on the Truckload and Logistics side, so you noted the numbers on revenue being down 20% in April and then on Logistics, up 12% in April. So just want to clarify, is that apples-to-apples, I mean, normalizing for acquisitions… Alain Bédard: Yes.

…or to pursue with some acquisitions? Okay, yes. Alain Bédard: Yes.

So they include acquisitions this year as well last year, right? Alain Bédard: Yes.

Okay, makes sense. So the Logistic, is it the e-commerce, that’s what’s driving the revenue up significant in March and April? Alain Bédard: Yes. Well, let me get that again, okay? So if you look at our logistics year-over-year, okay, in Q1 versus there was no real big M&A. But if you look at the first two weeks, okay, Donnelley is in there.

Okay. All right. Thanks. Alain Bédard: Okay. So Donnelley, if I remember correctly, I think we closed that deal in mid-March. So that’s why we still show some improvement. But don’t forget, like I said, our logistics in Canada is up organically, okay? There’s no M&A. They’re up double-digit in Canada. And then in the U.S., we were down organically, if you exclude Donnelley, why? Because we were really badly affected in New York. New York is a big market for us, Detroit, Boston, Chicago. And so we lose there. We gained on the other side. So we gained a little bit on the e-commerce in the U.S. We gained a little bit on the West Coast, Texas. We’ve also been affected in South Florida. So our forecast, as an example, in our Logistics and Last Mile in Q2 in the U.S., excluding M&A is that, we’re going to be down probably like 10% because of New York and Chicago and Detroit and all that.

Okay. And then that’s a great color. In the press release, you mentioned the – since COVID began, you saw good demand for like household goods, obviously, healthcare, e-commerce. Can you remind us like, obviously, we talked extensively about P&C here? But can you talk about exposure to household goods, healthcare, e-commerce for our other segments like in LTL, TL or Last Mile or Logistics? So what kind of exposure you have there? And then how do you compare those trends in those segments versus B2B? Alain Bédard: Okay. So if you look at logistics sector, I mean, in the U.S., we’re really, really big on healthcare. So it’s probably like 25% of our revenue today. So it’s – we’ve got really some good exposure in the U.S. Last Mile with that. In our P&C in Canada, I mean, it’s mostly our – excuse me, our specialty like an ICS because of its optical exposure, although, it’s healthcare, but all the shops are closed, all the stores are closed, so it’s not helping me at all. LTL, it’s small. I mean, LTL is mostly retail. As you look at my pie chart, retail is number one, and we used to be big in industrial LTL in Canada, but they shutdown all the plants over the last 10, 15 years. So we’re mostly a retail carrier like everybody else now in Canada on the LTL side.

Okay, makes sense. And then lastly, coming out of this down to our land, do you see an opportunity to optimize your portfolio like you did in 2008 and 2009, I’m like in the way of any divestitures or any acquisitions focused on particular areas you would be looking at? Alain Bédard: Oh, absolutely, absolutely. We – the way I see 2020 is like, okay, it’s a test. It’s a test and for sure, it’s turning some lights on. It – hopefully, it will help us sell even more of our Logistics and Last Mile to our customers, so that we can offer them a great service at a very, very attractive price. But also we look at the LTL in Canada, and it’s a shrinking business. So I think that we have to do more M&A in Canada on the LTL side to help us in the future. I think that there’s a lot of opportunity in Canada. Maybe there will be some opportunity in the U.S., we’ll have to see that down the road, because we run a partnership model with a U.S. carrier right now. Maybe we’ll see what happens there. On the Truckload side, I mean, we see a lot of opportunity again in improving our density in Canada, Ontario, mostly, to beef up the density, the offering that we could give our customers. And we’ve opened up a small specialty Truckload division in the U.S. through some acquisition, we would like to grow that. So there again, there’ll be lots of opportunity we’re discussing with many, many trucking company in the U.S. about join the family and do more with TFI. So, our balance sheet is really strong. Our team is second to none. Our mission is very clear. So, we have to go through this storm. We’ve navigated to some storm before. We’re going to navigate to this one. We’re really solid. We monitor things by the day and we’re not sitting on our hands.

Okay. That’s all for me. Thank you so much and good luck. Alain Bédard: Hey, thank you, likewise.

Brian Ossenbeck with JPMorgan. Your line is open.

Good morning, Alain. Thanks for taking the questions. Alain Bédard: Good morning.

I just want to follow-up on that last one and talk about consolidation after obviously done. Can you just run us through competition at this point in time considering the big drop off in volume, if you see any place that it’s maybe a little bit outsized pressure, particularly in some of the more challenging end markets? And away from consolidation, what do you think about just the general health of some of your competition? Are you expecting absent consolidation just for some capacity overhang to get lifted here as some players exit the markets, maybe more the asset-heavy side of the business? Alain Bédard: Well, what we’re seeing so far from the competition is, I think that everybody is so busy trying to manage the downsizing on the business that, they’ve not been chasing the other guys’ volume to try to replace the volume that they’ve lost because of whatever happened. That’s what we’ve seen so far. That may change down the road. But so far, I mean, everybody is so busy trying to manage, okay, safety for the employees, downsizing the operation here, doing this, doing that, that we haven’t seen any competition trying to chase volume. The other issue is that, if you try to chase volume, the shippers are busy also themselves trying to manage their own issues, right? So is that the right time for them to switch, because one trucker is going crazy and offer stupid rates? So far, so good on that. I mean, the business we have, we haven’t lost anything so far because of somebody comes in and offer a stupid race to a shipper and the guys says, okay, I’m going to jump on that so far. In terms of the industry, in general, if you look at the industry,…

Okay, got it. On the self-help side of things, obviously, you’re managing through this just like everybody else. But I think a little while ago, you combined some of the leadership for Last Mile Logistics and give them some more responsibility in the U.S., the Canadian team. So maybe you can just give us an update on things away from in the areas that you can control combining the systems and operations platforms rather on the TL side in the U.S. and then specifically on Last Mile Logistics? Is that something you’re just sort of trading water on, given the current environment, or are there sort of other levers you can pull here in the meantime? Alain Bédard: You know what, Brian, what we’ve done with our Logistics trying to have Kal overseas, both division U.S. and Canada. Having Dean overseas, both Salesforce U.S. and Canada, I think, also our Canadian financial team help our U.S. team there. It’s already helping our U.S. team to do much better. Don’t forget that these guys have to swallow, okay, three acquisitions. We bought Dicom, completely – Dicom U.S., completely disorganized. We bought BeavEx in 2019, completely disorganized. We bought the courier division of Donnelley even worse. So those guys have a lot of challenge and they need help – they need support. And this is why if we look at the – all these acquisitions, this is beefing up the revenue, helping us, okay, improve our density. And at the same time, we’re also correcting some mistakes of the past, some culture is issue. The focus about making two points. Is that good business? Well, maybe for the other guys, not for us. I mean, change this culture. And If we look at our Q1 U.S. Last Mile, it improve by – I would say, about 200 basis points. And I said that in Q4 on the call is that, I’m seeing at least 200 basis point improvement in our U.S. Last Mile operation, even in a very difficult context, because some of our great markets like New York, forget about New York, I mean, it’s down 60% – 60%, 65% because of what’s going on there. Some of the great markets like Chicago are down also as well. So even with that, I mean, we’re doing way better in terms of dollars, bottom line, and percentage. So it’s great, and there’s lot more to do.

Okay, got it. Last quick one. If you can just offer some comments on the decentralized model that you have more of a central overlay for a lot of the functions in the monitoring that you touched on it a few times during the call in terms of how you’re monitoring things by the day, instead of by the week. But just wanted to see if given this current stress test that you’re going through, what you think is the model going forward, if there are things you’re looking to add or tweak? Or is this kind of what you expected? How for it to perform and the people underneath you, given the current environment? Alain Bédard: Our team is, again, I mean, Brian, our team is really great. What I’ve done is monitoring by the day instead of by the week. It’s just I want to make sure, because I’ve got a responsibility with the Board and with my shareholders. And I don’t want to come up with excuse, oh, okay, so we dropped the ball. No, no, no, no, we can’t come in with some issues we dropped the ball. So I’ve got a strong belief that my guys are doing the right thing. But I just wanted to make sure that, hey, we don’t drop the ball, because this is, like you said, a lot of stress. You have to manage downsizing, you have to manage customers’ expectations, et cetera, et cetera. So these are very, very difficult times. And in very difficult times like that, this is when you see that you got a hell of a crew and I’m so proud of our crew at TFI. I mean, oh, my EVPs, I mean, the guys are doing a fantastic job, a fantastic job. And me, like we always do in the head office, we just want to make sure that those guys are focused on the right things. And this is why I went through a lot of different phase, critical phase in my trucking career. I’ve been a trucker for some 20 years. So I’m there just to make sure that we don’t drop the ball, we don’t lose focus, and also I’m there to motivate the guys and to encourage them. It’s not easy to do what we have to do now to be successful and to preserve capital and to keep the morale up. When you drop – when you have a business that drops 50%, it’s not a crisis, it’s a tsunami. So you have to let go people. You have to know what are we going to do tomorrow? It’s not easy. And this just happens overnight. It’s not something that has been going on,. okay, for six months. It just boom going to happen. And then, okay, what do you do now, right?

Right. Okay, great. Thanks, Alain. I appreciate the time. Alain Bédard: Pleasure, Brian.

Walter Spracklin with RBC Capital Markets. Your line is open.

Yes. Thanks very much. Good morning, Alain. Alain Bédard: Good morning, Walter.

So when I look at your free cash flow for this year, I know you’re probably reluctant to give any guidance there. But just looking at $1 free cash flow deployment, it sounds that, obviously, you talked about acquisitions being on hold for now. Alain Bédard: Yes.

Would that hold as well, obviously, dividend, buyback, and really, you’re just reloading your balance sheet, building up liquidity. Is that the best description of the 2020 strategy for free cash flow? Alain Bédard: Yes. So there’s no concern on the dividend. So we’re not going to do anything on the dividend in 2020. In terms of M&A, like I said, nothing is going to happen in Q2 and there may be something in Q3 and in Q4 depending on what’s the visibility we have now. In terms of the buyback, we put that on hold. We did some buyback in Q1. We bought back about 1.3 million shares. We’re not – this was not normal, because normally, you don’t issue shares and buy it back. This was just, because we gave notice to the – as a matter of fact, it’s RBC that managed our NCIB prior and the stock dip so much with what happened that the buyback was now back on track. But as of April 1, I mean, we’re not doing any buyback. We’re just going to wait and see. Once we see what April looks like, what May looks like, and what the stock price looks like, maybe then it becomes a choice. Are we going to buy a company or we’re just going to buy the stock? We’ll see then. But I don’t think NCIB is in the picture at least for a few months. And then, like we said…

So as we go – go ahead. Alain Bédard: Yes, excuse me, Walter. But on the CapEx side, it’s going to be a huge reduction and we can afford that, because our fleet is so young in the U.S. And then – so we’ve canceled the U.S., but we’ve postponed Canada. So on the Canadian side, depending on what we see in Q2 and early Q3, or in Q3, we could get the benefit of those CapEx, okay? Because they were booked at a very low exchange rate U.S., Canada. So we would like to do those Canadian CapEx in Q4, but the environment has to be positive for us to do that.

You mentioned some files you were investigating, you’re doing due diligence on your holding back for now, obviously, given the conditions. What’s your main concern? Is it really just you don’t know how much COVID is going to impact the operations of potential targets? And you want to get a better handle on that? Or is it that the seller has gotten a little bit more reluctant? Or are you renegotiating price, given everything going on? What’s the tenor of the discussions with those you already have actively involved in? Alain Bédard: Yes. So the first reason for us to put that on all is preserve cash, not knowing, okay, what will be the impact of the virus and how long this is going to be an issue. So that’s reason number one. All the discussion we’re having with sellers, nothing is about price so far, because we don’t want to talk about price with these guys trying to tell them that, well, market valuation of trucking company has dropped 30%, so we have to drop our offer at 30%. We don’t like to do that, I mean, because maybe TFI stock is down 30%, 40%. But this is – maybe it’s going to be up 30% in a year-and-a-half. So we don’t play this game of trying to squeeze the seller. We have a reputation us in Canada and in the U.S. to be fair, so we want to buy at a fair price. But – if there’s a permanent impairment in the target, okay, because those customers that this guy has, or let’s see, his revenue was $60 million, and it will never be back at $60 million. It’s because whatever happens, I mean, he has got a lot of B2B customers shutdown and they will never reopen, then we have to readdress the price, okay, because of that, but we never readdress the price because of market condition. This is not fair in our mind. But for now, everything is on hold, because we want to be cautious about preserving the cash.

And on that note about permanent impairment and then opportunity, obviously, there’s going to be companies that post COVID-19 are permanently impaired. There’ll be those that go back to normal and those that thrive and go to benefit from a new normal. When you look at each of your businesses, generally, once COVID passes and a new kind of new normal establishes, what’s your anticipation division-by-division of whether they can go back to normal, whether they will be permanently impaired, or are there or what areas would actually propel to a new level post COVID-19? Alain Bédard: Yes. So that’s a very good question, Walter. And I think that on P&C, I said it is that because of B2B will never be the same, okay, pre-COVID-19 and after COVID-19, I think that a lot of malls, a lot of stores, et cetera, will never reopen. So that’s – that will have some effect to our B2B, okay, within our P&C next-day delivery system, because the guys will never reopen. So that being said, but it will probably be small, nothing major, okay, but it will be more than if we wouldn’t have this virus that accelerate the e-commerce. So we will probably lose a little bit on that side, but we will gain tremendously in our Logistics and Last Mile operation, both in Canada and the U.S. The LTL, to me, I’ve said it many, many quarters, is LTL, it keeps on going down all the time because of the e-commerce. So the only way us we’ve been able to sustain some kind of revenue is to M&A, okay, feed the beast, why? Because – and then just serve – continue serving the good customer that you’re acquired to the acquisition and just get rid of all the small guys…

Okay, that’s really good color. I really appreciate the time, Alain. Alain Bédard: Pleasure, Walter.

Cameron Doerksen with National Bank Financial. Your line is open.

Yes, thanks. Good morning. Alain Bédard: God morning, Cameron.

Just two really quick ones for me. First, just on the R.R. Donnelley acquisition, you mentioned that the profitability of that revenue is pretty low. I’m just wondering, just in the very short-term, what that means for margins in that business? I mean, is that a business that you can pretty rapidly get the quality of revenue improved? Alain Bédard: Absolutely, absolutely. I’m convinced on that, Cameron. I mean, we bought the business. We have to shed one major account that didn’t make any sense. So those guys are gone or will be gone within the next few weeks. There’s another one that will be gone in June, significant customers, but it’s just crazy. Listen to that, we had a cargo liability with those guys in the $10 million. I said it, like I said,. I mean, who can be hauling opioids or things like that with a $10 million cargo? So you can negotiate the race with the customer. The first thing you have to negotiate with him is, we don’t want to have this $10 million liability. So customers says, well, we’ll try to find another stupid trucker that’s going to accept that. Well, good luck. So that being said, those two customers – two or three customers are gone. The rest, what we see so far will be good business and it fits into our network. So this Donnelley acquisition, once we get rid of all the things that don’t fit TFI, it’s going to be fantastic.

Okay, great. And then just secondly, for me, just on the specialty truckload in Canada specifically, one of the drivers there is obviously construction activity. We’re already, yes, I guess, starting to see a little bit of opening up. But I mean, is that kind of one of the bigger drivers of that business rebounding is really construction coming back? Alain Bédard: Yes, construction is one, mining is the other, okay? So mining is back, okay? But we – for mining, you need the world economy to get back on track. So, yes, the mines are reopened in Canada, so it’s good, but we need the global economy to be on track. So when you look at what is anticipated for 2020, most of Europe is going to be down GDP about 5%, 6%, 7%, U.S. about the same. So it’s going to be still a difficult year for us in 2020. But I think 2021 is going to explode back into what makes more sense. The other business that’s affecting us is the automotive business because of the steel. So steel and automotive, I think, it’s going to be really difficult for them at least for a year. So probably, it’s going to be slow until mid-2021 – 2021, not 2020, but 2021. So really, the specialty truckload, it will probably the – be the one that is less affected, but really our flatbed is the one that is mostly affected now. As an example, we have a lot of explosive for the mines, while everything was put on hold until now. So in Quebec, the construction has been put on hold since mid-March. They are starting slowly to reopen. This has been a huge negative for us in Quebec. I mean, I think, Quebec was the only province or state that closed under construction industry, so…

Okay. Alain Bédard: …so, to me, it is back on track.

Okay. No, that’s helpful. That’s all for me. Thanks very much. Alain Bédard: Pleasure, Cameron.

David Ross with Stifel. Your line is open.

Hey, good morning, Alain. Alain Bédard: Good morning, David.

Just a quick question on the Last Mile in the U.S. after the three deals you’ve done recently. Are there any holes left? How do you think about the U.S. network and where you want it to be in a couple of years versus where it stands today? Alain Bédard: Yes, that’s a very good question here. So yes, we have some markets, where we could be stronger or better, and we’re always on the lookout for some M&A. We have discussion with another group and finally, a – maybe it will happen sometimes late this year, or early into next year. But really, the main focus of our business in the U.S. with Kal and Dean there is to really sell our solution, okay? We’ve been very successful in Canada selling our solution, but not so much in the U.S. as of yet. So really, we have a great solution for e-commerce. We have a great solution for, let’s say, the healthcare industry. We do well, but we could do better. So really, M&A, yes, if we can find the right target in the U.S., absolutely, we’re going to jump on that. But I don’t see anything major in 2020 on that. But what I see very important with Kal and Dean and Scott leverage and all the team in the U.S. is guys, we have a fantastic solution, okay, that is second to none. And we have to have customers understand better. So we – we’re really focused on that for 2020. Now, the problem is that try to sell something to a customer now, it’s difficult, because they’re like us. They’re stuck in this major crisis of the virus. So there’s not a lot of people to really listen to a new solution. But we’re educating our salespeople. We’re working on the program and all that to be ready as soon as we can sell this solution to the market. So right now, big issue is, how are we going to digest all these acquisition? We’re doing that now. We’ve improved our bottom line, like I said earlier, in our U.S. Logistics by about 200 basis points in Q1. We still have a lot of work to do with the Donnelley acquisition. So we’re busy. We’re busy. We got lots of good stuff, but we’re also we’re getting ready as soon as we can to sell our solution, like we’re doing in Canada in the U.S.

And then you talked recently about the automotive sector and how that’s going to take sometime to come back, it’s about 9% of the business. Which… Alain Bédard: Yes.

…segments is that most concentrated in? Whether that be LPL and Canadian Truckload, or is there… Alain Bédard: It’s Canadian Truckload and a little bit also U.S. TL. So we got Packard, as an example, customer both in U.S. and Canada. Those guys are shutdown. So we got Mercedes in the U.S. Those guys are shutdown. We got Nissan, okay? So it’s, I would say, probably a little bit more U.S. and then Canada for the automotive business today, U.S., Mexico.

Okay. But it’s primarily in the Truckload segment? Alain Bédard: It’s – yes, Truckload. Yes, yes. No, no, – nothing major in LTL or in P&C.

Excellent. Thank you. Alain Bédard: Pleasure, Dave.

Our final question comes from the line of Benoit Poirier with Desjardins Capital. [Operator Instructions] Benoit, your line is open.

Hey, good morning, Alain. Alain Bédard: Good morning, Benoit.

Yes. Just to come back on the potential targets on the Last Mile business in the U.S., would it be similar profiles to Dicom, Donnelley and BeavEx? Or this would be higher, let’s say, more organized companies? Or would it be – how would be the profile? Alain Bédard: No, this is – it’s going to be the same kind of profile as the…

Okay. Alain Bédard: …three that you just talked about.

Okay, that’s great. That’s great. Okay. And when we look at e-commerce, you’ve been very, very disciplined in the past. You could have grown that business much higher, but profitability was always a big threshold. Alain Bédard: Yes.

So I’m just wondering, given the strong demand we see these days, what about the pricing environment? Do you think there’s better opportunities, given Amazon’s are very busy? And is your goal to become fully integrated or really to complement the biggest player right now? Alain Bédard: Yes, good question. So yes, Amazon, for sure, is really, really busy. And what we’ve done us in the meantime is, because New York, as an example, I mean, we’re down so much in New York with our regular customers. So our U.S. team said, okay, we’ll do a deal with Amazon. So right now, we’re delivering about 5,000 parcels a day in New York, because we’re down so much. We know that this is short-term. We know that as soon as they will try to find somebody else to do it cheaper than us, because us, we’re about making money. But that being said, the environment, what we’re trying to do, Benoit, is I have customer understand better our solution. Now, our solution, like you said, is not fully integrated like an Amazon solution. Amazon has got the DC fulfillment center and distribution today. So our solution is a little bit like the other transportation company, UPS or FedEx, whatever is that we offer the transportation, not the DC. But our solution to customers that have DCs or have matched up with DCs is the same is similar to what an Amazon solution is, very efficient, lean and mean great service. And that’s what we’re trying to do. Now down the road. Okay, does it make sense for us to really have a partnership, okay, with someone that’s got the DC capability and that’s offering this kind of service to the shippers, maybe that may happen, Benoit, but we’re not there yet.

Perfect. And when we look at the fuel and the foreign exchange, obviously, there has been some big movements year-to-date, which… Alain Bédard: Yes.

…I would expect to be favorable. So could you maybe provide some color – or on how does it going to be flowing to the bottom line with respect to fuel and FX? Alain Bédard: Yes. Well, fuels are pass-through. So really, nothing major for us on the fuel side. But really on the FX, for sure, I mean, our – but we need U.S. dollars profit to be significant. So depending how good our Last Mile and our Truckload guys will do in the U.S. will definitely help TFI. Our Canadian division mostly run Canadian dollars except for some of our Truckload division. So it could help us a little bit in the rest of the year, because now we’re, I think, the dollar is about $1.40, something like that. So we’ll see. But this is not something I would say, Benoit, it’s really significant for us in terms of bottom line.

Okay, perfect. And last one for me. You provide kind of a consolidated number for net CapEx this year. I was just curious whether the amount of asset disposal should be bigger in light of the adjustment to the capacity or asset disposal should be pretty similar to the past? Alain Bédard: No, normal, normal. I mean…

Okay. Alain Bédard: What we’re doing is, we’re not shedding trucks, okay, because of this revenue shortfall. Because like we’re protecting our employees with our kind of system of bonus to bring them back to work, we don’t believe today that this will be long-term impairment in terms of the volume. So it will be a disaster in Q2 in terms of the volume. Everything that we read says that maybe the U.S. GDP in Q2 will be down like 30%, okay, but it’s up in Q3, okay, so – and in Q4, everything that we read about that. So what we’re saying is that, okay, well, we don’t have any other options. So we sell what needs to be sold. But what is still useful for the company in the time being is, we’re going to have to park that at the fence and wait till the business comes back.

I see. Okay. Thank you very much for your time, Alain. Congratulations, again. Alain Bédard: Thank you, Benoit.

There are no further questions at this time. I would now like to turn the call back over to Alain Bédard for final remarks. Alain Bédard: Well, thank you, operator, for facilitating this morning’s call. And thank you, everyone, for joining us today. So we at TFI very much appreciate your interest and want you to know that, as I’ve said, we are working hard to create value unlock – and unlock it for our investors and whenever possible return excess capital to our shareholders. So I look forward to updating you throughout the year. And I can assure you that working together, we will all make it through these unprecedented times and even – and emerge even stronger. So I have a great day and thank you, again.

This concludes the TFI International’s first quarter 2020 results conference call. We thank you for your participation. You may now disconnect.