The FreightCaviar Podcast: From Paper Cards to AI: 40 Years of Freight

In this week's episode, we sat down with Noam Frankel, one of the founding members of American Backhaulers. Noam gives us an exclusive look behind the scenes of the company's early days, shares his insights on the significant changes in the industry over the past two decades, and discusses his vision for the future of the industry.

Early Days of American Backhaulers 

We started our conversation by discussing the very early days of American Backhaulers and the changes that took place after the deregulation of the industry in 1980. “Paul Loeb had started a brokerage probably around 1982 and identified the opportunity in this new field. In the early 1980s, when we started, there were probably 500 brokers in the country. And that's because the industry was first deregulated in 1980 by Jimmy Carter. Before then, authority was listed from one state to another state. So you had to get authority to haul goods from one state to another state. Once the deregulation happened, they had to write off a huge amount of value off their books because now it was easy to get 48-state contract authority. And so what that also opened up was the ability for private fleets, people who were moving goods for their own companies, to now start hauling other people's goods.”

The Role of Technology 

Noam also touched on the subject of technology and the role it played in the early days of the industry. “Paul trained me by throwing me a Yellow Pages. So we obviously had no technology then, and we started working together, and I was able to make some headway as a salesperson. Early on, I recognized the opportunity that technology could bring us. It was relatively new, but as we started to get to know loads and we started to get to know carriers, it was clear it was a big matching game that technology could make a big difference. So I started to look for opportunities to bring technology into the business.”

He also shared the ways that information on freight was stored before technology and screens really took over the industry. “Before we created the technology, we developed a card where you put all of the information on the freight. Our load board was a metal rack, and we had this card with all the information, and you could fill out all the information we needed for a load. Very early on, Jeff was starting to play with Commodore 64, and he developed a board that basically just moved Xs across the board. But what we looked for in a computer system was really to replicate an order entry screen that had all of the information that you needed on the load that had been on this card.”

Industry Changes and Challenges

The world has changed in many ways in the last few decades. While some changes are positive, others are not necessarily so. Noam feels that the job of a freight broker has lost the value of having a relationship with a carrier. “What a broker does hasn't really changed a lot. I think some things that have changed are that public load boards came out and broker reps have gotten used to just posting loads on the public load board, sitting on their phones, taking inbound calls, and watching the NCAA tournament. They have lost the art of talking to carriers and lost the value of that carrier relationship.”

Future of the Industry

In Noam’s eyes, it's not just the way that brokers connect with clients. What once was an industry of 500 brokers in total, today there are thousands, if not hundreds of thousands,  who want to be part of the industry. Unfortunately, what that has led to is a crisis of commitment. "This who's going to screw over who first, whether it's the carrier or the broker or the shipper, is not conducive to an efficient transportation system. I think where the industry has to go soon is much more of a partnership. Brokers certainly play a role in that if they're doing their job the right way. It's partnerships between carriers and brokers and shippers that mitigate the swings when the market shifts and start to maintain longer-term contracts, so people can actually grow a sustainable business on both sides.”