FreightWaves Today | September 15

SPEAKER_1 (0:13)

Looking into the state of freight is what we do best here at FreightWaves Today. We put together some interesting takes for where we are headed in the final quarter of the year and beyond. Take a look.

Craig (0:23)

So let's bring our first guest in. Many of you know our first guest, Tom Albrecht. He is the Chief Revenue Officer of Reliance Partners, which is one of the largest insurance brokers in trucking. That's all they do over there at Reliance.

It's a big market, so you could go there. But Tom is an institution that's been around this industry for decades. Tom, you worked on Wall Street. We're talking earlier on air because this is our train day, our rail day.

SPEAKER_1 (0:50)

It's our favorite day of the week.

Craig (0:51)

It's Wednesday. As the railroads go, when you started your career on Wall Street, there was nobody really monitoring the railroads.

Tom Albrecht (1:00)

Yeah, it was a really special time. So while I'm known more for trucking and my role around that for the last three plus decades, my early coverage was built around the railroads. There were 15 public railroads and only two to three analysts per public railroad. Nobody wanted to touch them. Money managers didn't want to touch them. Today, I think there's five public railroads and everyone's got at least 30 analysts. So we could get in and make gigantic calls that were different. The first one that we did was the old Santa Fe. They had paid a special $40 a share dividend back in 1989 to fend off some corporate raiders. They took on all this debt. I had a boss who was like, this company is asset rich.

His thesis to me and he made me go research it was, the company is going to have to split up and IPO all these divisions. So they had the railroad which owned, at that time, it was incredible. I think they owned 2 percent of California, 2 percent of Arizona, 1 percent of Nevada.

So they took public a real estate company. They had Santa Fe Energy.

Jason Miller (2:07)

You mean they had the real estate?

SPEAKER_5 (2:08)

Real estate. They had a real estate.

Julie (2:09)

Like that set of land mass.

Tom Albrecht (2:11)

Yeah. Right, right. I mean, they owned. And so, it was a public company. I think it was called Catalyst, C-A-T-E-L-L-U-S.

Craig (2:18)

That's huge.

Tom Albrecht (2:18)

They had Santa Fe Energy that they took public, Santa Fe Gold and the railroad. I think there was a fifth one, but we made a killing for investors.

Craig (2:29)

It's interesting. I have been, and Willie knows this because I talk about it often. I'm just the namer with history, and particularly the railroad history.

And it's interesting how these businesses, these railroads, I mean, they built America. Yeah, that is the reason we have this massive manifest destiny expansion. But it's interesting how much incentive, there was a lot of corruption. This is the Gilded Age. But also how much the federal government, working with the territories, really wanted this expansion and infrastructure, was willing to fund it to really build what is the modern economy. It's amazing how these families and these companies just acquired so much real estate. I mean, the whole state of Florida was built by railroads. Was it the Flagler's that built that entire-

Tom Albrecht (3:16)

I believe so, yeah.

Craig (3:17)

That entire state? It's just really fascinating.

Tom Albrecht (3:21)

It is. In all the railroads that used to be around, I grew up near St. Louis, but there used to be a railroad in my town called the Alton Railroad.

They were one of many thousands that went away after the Stagger's Act in 1980 But it was a fascinating time. I loved it. There were railroads that eventually got bought out that we covered, when nobody covered them, Chicago Northwestern. There was a little bitty one down in Memphis called the Mid-South Railroad that got bought out for a killing.

We could get in and make a difference. We had a similar call on the Burlington Northern, that it was going to be more worth some of its parts. We made a call that they would split up as well. Again, nobody was following them. We followed Conrail and eventually, I shifted full-time more to the trucking industry around 93, 94

Craig (4:15)

Let's talk a little bit about, you got your career started on Wall Street. You've come through all of these cycles. When did you start in freight? When was your first born on date?

Tom Albrecht (4:25)

1989

Craig (4:26)

You came in, deregulation was nine years in. We're past the initial shock. A lot of the pre deregulation motorcares had filed bankruptcy. And this is still at a time when the railroads were a disaster, right?