Heartland Express, Inc. (HTLD) will fully absorb the U.S. operations of Contract Freighters, Inc. (CFI) into its own fleet, a move that takes effect on December 31 2025. The integration keeps CFI’s Mexican subsidiary, CFI Logistica, S.A. de C.V., and the Joplin, Missouri; West Memphis, Arkansas; and Laredo, Texas offices unchanged, while rebranding the U.S. business under the Heartland name.
The decision follows a series of operational upgrades completed earlier in 2025, including a transportation‑management‑system conversion in Q1 and a unified driver electronic‑logging platform in Q2. By aligning driver pay structures—offering the legacy Heartland package or higher‑pay options from the Millis and Smith brands—Heartland aims to improve driver retention and reduce administrative overhead. The consolidation is expected to increase capacity, streamline dispatch, and create a single, scalable fleet that can better respond to market demand.
Financially, Heartland has posted consecutive quarterly losses—$9.3 million in Q3 2024 and $8.3 million in Q3 2025—while revenue has slipped from $259.9 million to $196.5 million. The company’s operating ratio has remained high, reflecting margin pressure in a freight market that has seen excess capacity and weak rates. Management projects that the integration will lower operating costs by an estimated $1.2 million annually and lift operating income by 12% once the new pay structure and system efficiencies take effect.
CEO Mike Gerdin said the integration “is the next logical step in enhancing our consolidated operating and financial performance.” He added that the move will “strengthen our competitive position in a challenging market by delivering a more efficient, driver‑focused operation.” Gerdin also noted that all current CFI employees will be offered continued employment, underscoring the company’s commitment to workforce stability.
The broader freight industry remains in a prolonged downturn, with freight volumes down 8% YoY and rates falling across most segments. Heartland’s strategy to consolidate CFI’s U.S. operations is designed to counteract these headwinds by creating a larger, more flexible fleet that can absorb market volatility. The company’s focus on operational efficiency and driver incentives is intended to mitigate the impact of low rates and high fuel costs, positioning it for a gradual recovery as demand picks up.
The integration will also trigger a review of goodwill and intangible assets related to CFI. While preliminary assessments suggest a modest impairment charge, management expects the long‑term benefits of a unified fleet to outweigh any short‑term balance‑sheet impact. The company will continue to monitor the integration’s financial effects and adjust its capital allocation strategy accordingly.
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