The freight market is in a regulatory-driven bull cycle unlike any we&#x27;ve seen. Seth Holm, CEO of West Brow Capital, breaks down the shocking truth about trucking capacity, revealing that potentially only a fraction of carriers meet minimum safety requirements. ⁠Follow the FreightWaves NOW Podcast⁠ ⁠Other FreightWaves Shows⁠ Learn more about your ad choices. Visit megaphone.fm/adchoices

Freight Market Bull Cycle: Will Capacity Issues Drive Rates Sky-High?

FreightCasts

# Full Transcript

**Podcast:** FreightCasts

## Transcript

He is the founder of West Brow Capital. West Brow invests specifically in transports and stuff. As a pure play transport investor, you're one of the largest. That's right. It's a small pool to pick from. But yeah, we are unique. And I think, you know, I'd say the first thing that I know you're excited about and so am I is we started at the end of 2021. And so my timing was definitely not the best in starting a transportation fund.

So kind of coming out of a four year deep freight recession and now having fun for the first time in a while. Well, you were at Sonar before you ran our research group here at Sonar and decided to go out and build a fund based on all that great research you did in the day. It's interesting. We've had some fantastic guests on the last couple of weeks. We had Shelly Simpson and she talked about the fact that she joined or I shouldn't say joined.

She became CEO, I think a month into the freight recession. And Drew Wilkerson also talked about the spinoff of RXO from XPO was really in I believe it was November of 22, which is sort of the depths of the recession. And they also timed the Coyote purchase sort of at the bottom of the market as well. He would argue that he thought and I believe as well that the freight recession was largely over with. Rest in peace, freight recession did not work.

It is a humbling market when you when you learn how cyclical this is. That's right. And I you know, I thought, you know, when you start up a hedge fund, you really need to build a track record and some credibility. And so I thought, you know, sure, I'll just build a track record and then the assets won't come in anyways. And and you know, the market will have recovered by the time they did.

And so I think you, me and everyone else, even the experts in this field were kind of shocked just how sticky that capacity in the on that on economic side of the non domiciled CDL type stuff, just how long it lasted. It was brutal and 50% cost inflation over a four or five year period. And you know, for the smaller carriers, your revenue might have been down about the inverse of that. And so it's just been, you know, a long slog.

And I think, you know, with the truckload market really beginning to heal, another thing we invest across not just surface transportation, but anything moving passengers or freight, you get this halo effect as the trillion dollar trucking market recovers. It creates an, you know, positive umbrella that feeds on everything else that we're doing as well. I don't think anyone, certainly I didn't understood how pervasive the immigration system is. We had Tom Albrecht on Friday where look, it wasn't on the radar of a lot of people.

There was a couple of folks on X that were very vocal about American Truckers United were very vocal about the immigration story. But it felt at the time more of a fringe perspective. Now it's become mainstream where they were very act...

Freight Market Bull Cycle: Will Capacity Issues Drive Rates Sky-High?

Transcript

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Every day you wait, your competitors are finding
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Freight Market Bull Cycle: Will Capacity Issues Drive Rates Sky-High?

Transcript

Built for investment professionals

Every day you wait, your competitors are findingedge in conversations you're not hearing.

Every day you wait, your competitors are finding
edge in conversations you're not hearing.