Mullen Group (TSE:MTL) executives used the company’s fiscal 2026 first-quarter earnings call to emphasize record revenue and what management described as “solid profitability,” while also highlighting an uneven demand backdrop and new sources of uncertainty tied to fuel price volatility.
Chair and Senior Executive Officer Murray Mullen said the company delivered its quarter “even during a period of basically no economic growth,” adding that the team is maintaining a “keen eye on costs,” prioritizing “margin over market share,” and continuing to look for acquisitions that fit its network of “44 independently managed business units.”
Business trends: March strength lifted L&W, while LTL remained subdued
Mullen framed L&W as closely tied to overall economic conditions, suggesting the segment is positioned to benefit if the economy gains momentum. By contrast, he said the less-than-truckload (LTL) business “still seems to be stuck in neutral,” adding that without acquisitions it remains “very difficult to grow.”
Senior Financial Officer Carson Urlacher said the year-over-year decline in same-store sales in LTL was driven largely by the company “demarketing some customers,” and also cited operational disruption from severe winter conditions early in the quarter. Urlacher said inclement weather in January—particularly in eastern Canada—led to “a couple operating days where we had trucks that barely left the yard,” with conditions improving in March.
Mullen said those weather impacts were concentrated in two larger business units, Gardewine Group and APPS Group, due to their eastern footprint.
Looking into the second quarter, Mullen said April had not matched March’s strength. He raised the possibility that March benefited from typical quarter-end inventory movement and said the situation in Iran and the resulting fuel price spike has caused customers to “take a little bit of a pause.”
Pricing and capacity: U.S. tightening contrasted with steadier Canada
Discussing market conditions, Mullen drew a clear distinction between the U.S. and Canadian freight environments. He said the U.S. market is “tightening quite rapidly,” citing the implementation of English proficiency rules and the removal of some drivers from the commercial driver pool—steps he said reduce capacity by limiting available drivers. He added that this tightening is spilling into cross-border markets.
In Canada, Mullen said the market is not tightening in the same way, but that increased enforcement of regulations and safety standards is “forcing some discipline” and could support pricing by easing competitive pressure from operators that may not have followed rules as closely in the past.
On wages, Mullen said he does not currently see wage inflation in Canada “until you see a demand push,” and noted that Mullen’s U.S. exposure is primarily 3PL and owner-operator-based cross-border activity rather than company truck fleet operations. He also said the spot market has improved, but contract rates have been “a bit stubborn.”
AI initiatives: focus on tools to improve efficiency and load factor
Asked about potential AI disruption in brokerage, Mullen said the company has not seen disruption and is working to embed AI tools into Holistic’s Silver Express platform. He characterized Holistic as both “a bit of a software tech play and a freight forwarding” platform that provides technology to agents.
Richard Maloney, President and Senior Operating Officer, said the company’s two U.S. business units (Holistic and Cole US) are developing AI capabilities within their own operating systems and IT infrastructure. He added that the company is also pursuing an AI initiative in Canadian LTL operations, with an emphasis on improving load factor and operating efficiency. “It’s not an event. It’s a journey,” Maloney said, describing ongoing experimentation and learning.
Mullen said companies that do not incorporate AI into technology platforms and customer service offerings “will be at risk,” and stated that Mullen is “going all in” on adoption.
M&A and energy exposure: recent deals tied to upstream activity
On acquisitions, Mullen said the company remains selective and continues to prioritize targets that can operate as self-managed, profitable business units within the group. He also confirmed the company completed two acquisitions in the first quarter, both in the Specialized & Industrial (S&I) segment and tied to energy.
Mullen said management is “buying the thesis” that Canadian governments will proceed with “nation-building projects,” though he described the timing as uncertain. He added that the company is positioning its portfolio accordingly and noted that Mullen had “really de-invested for 10 years” in energy-related areas before recently adding companies again.
Maloney provided examples of the two acquisitions and said they were closed before the onset of war-related commodity price spikes, describing them as investments made with a view to where “the puck will be going.” He cited Black Label Transport in the Clearwater play and a water management business tied to upstream fracking activity.
Despite higher oil prices, Mullen said he had not yet seen customers make new capital commitments for drilling or related services, noting that the price move was recent and producers remain uncertain about duration. Urlacher added that the active rig count remains below last year’s level.
Major project bidding: Alaska LNG discussions underway
While Mullen said he was not seeing meaningful “nation-building” project discussions advancing in Canada—describing the environment as still largely “consultation” and “hurry up and wait”—he said the company is actively engaged on a major Alaska project.
Mullen said Mullen Group is in discussions related to Alaska LNG and is “at the bidding table,” including bidding work to haul pipe for an approximately 800-mile project. He described the overall project as “upwards of $40 billion,” said there is “a short deck of how many suppliers can do this project,” and stated Mullen is one of them, working with a partner it has done business with for 20 years. Maloney noted the company was still in the bidding process.
Guidance maintained; fuel surcharge mechanics in focus
Urlacher said the company is making “no change to the guide right now,” adding that results by segment were largely in line with what management communicated earlier in the year. Mullen said if March-like trends were sustained, results could come in above guidance, but noted the company’s plan did not assume incremental acquisitions or contributions from large projects.
Fuel costs were a recurring theme. Mullen said fuel is the company’s second-biggest expense after labor, and noted fuel surcharge programs respond to increases rather than anticipate them, leaving carriers “always behind the curve” during spikes. Urlacher pointed investors to 2022 as an analogue, describing how quarterly fuel surcharge revenue rose from roughly CAD 50 million to about CAD 70 million during that period, and said fuel as a percentage of revenue increased from about 7% to about 10% by year-end. He said March fuel surcharge revenue was about CAD 22 million this year versus CAD 19 million in March 2022, adding that as the company has grown, fuel surcharge revenue may trend above the historical quarterly level if the Middle East conflict persists.
In closing remarks, Mullen said the company had “a pretty good quarter” and that the team is working to continue producing results ahead of the second-quarter update.
About Mullen Group (TSE:MTL)
Mullen Group is a public company with a long history of acquiring companies in the transportation and logistics industries. Today, we have one of the largest portfolios of logistics companies in North America, providing a wide range of transportation, warehousing and distribution services through a network of independently operated businesses. Service offerings include less-than-truckload, customs brokerage, truckload, warehousing, logistics, transload, oversized, third-party logistics and specialized hauling transportation.
