🎣 The Story of American Backhaulers

Good morning. In today's newsletter, we’re diving into the story of American Backhaulers—a company many consider pioneers of the freight brokerage industry. Founded in 1981 in Chicago during the transportation deregulation era, it grew to become a powerhouse before being acquired by CH Robinson for $136 million.

Over the last few years, I’ve had the chance to interview several key individuals from the original American Backhaulers team, as well as a few who were at CH Robinson during the acquisition. Today, we’re piecing together the history, the impact, and the legacy they left on the industry.

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The Early Days of American Backhaulers

In 1981, Paul Loeb founded American Backhaulers, just as deregulation shook up the U.S. trucking industry.

Loeb noticed trucks often returned empty after deliveries, a clear waste of capacity, and saw an opportunity. His solution? "Backhauling"—filling those trucks with freight on their return trips. From this simple idea, a freight brokerage was born that would later influence the entire industry.

American Backhaulers started small and scrappy. Noam Frankel, the second employee and later COO, recalls the early hustle:

“Paul handed me a Yellow Pages and said, ‘Start calling sand companies.’ We didn’t have technology back then. It was pure grind.”

Fun Fact: When American Backhaulers started, there were only about 500 freight brokers in the entire country. The company’s early focus was on raw materials like metals, plastics, paper, and chemicals.

A Unique Approach to Brokerage

The company carved out its own lane in the brokerage world. They separated customer reps from carrier reps (also referred as the Chicago model or specialized model), an unusual move in those early days. This focus on specialization helped American Backhaulers scale efficiently.

• Cradle-to-Grave Model: One broker handles everything from finding a customer to booking the truck and invoicing. Best for handling small to medium shippers but less effective for larger, contract-based shippers.
• Specialized Model: Tasks are divided among different people, like an assembly line (e.g., sales finds customers, carrier reps find trucks). This model scales better for larger brokerages.

Frankel also pushed the company to innovate with pricing.

“We were one of the first to price freight upfront and commit to it before covering the load. That was a huge advantage."

The Rise of Tech at American Backhaulers

Early on, Frankel recognized the potential of technology to transform their operations. “We built our own software system, a proprietary TMS (Transportation Management System). It was game-changing,” he said.

This investment in technology gave them an edge over competitors and positioned them for rapid growth. By the mid-1990s, American Backhaulers was moving $80 million worth of freight a year.

Their proprietary tech didn’t just help them scale—it eventually became a key reason why CH Robinson acquired the company in 2000.

Eddie Leshin, VP of Operations at American Backhaulers, noted:

“The technology we built became the foundation for CH Robinson’s execution platform, which they still use today.”

The CH Robinson Acquisition

As American Backhaulers grew, they caught the eye of industry giant CH Robinson. In 1999, the acquisition was announced, and by early 2000, CH Robinson officially acquired the company for $136 million.

Now, exactly 25 years later, this deal remains one of the most significant in freight brokerage history.

The acquisition wasn’t just about competition—it was about tapping into American Backhaulers’ strengths. Kevin Nolan, who worked at CH Robinson during the deal, said in an interview with The Freight Pod:

“The carrier network they brought in was incredible. It helped CH Robinson grow from $2 billion to $13-14 billion today."

While CH Robinson greatly benefited from American Backhaulers’ technology and approach, there was a clash in company cultures. As Phil Shook noted:

“The cultures couldn’t have been more different. Backhaulers was entrepreneurial and paid on commission, while CH Robinson focused on low base salaries with a percentage of the office profitability."

Key Impacts of the Acquisition:

• Expanded CH Robinson’s carrier network, boosting their market dominance
• American Backhaulers’ tech became the foundation for CH Robinson’s execution platform
• Helped CH Robinson grow significantly in revenue and market share

Fun Fact: Jeff Silver, the CEO of American Backhaulers at the time, later founded Coyote Logistics, which UPS acquired for $1.8 billion in 2015.

The legacy of American Backhaulers goes beyond just a successful acquisition. Its technology, culture of innovation, and approach to carrier relationships helped shape not only CH Robinson but the entire freight brokerage landscape.

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American Backhaulers: Legacy, Merch, and Sources

Podcast Interviews & Sources

1. Interview with Noam Frankel, the second employee at American Backhaulers and former COO.
2. Interview with Eddie Leshin & Brian Winshall. Former employees at American Backhaulers. Eddie went on to be COO of Coyote Logistics.
3. Interview with Phil Shook. Phil ran the intermodal division at C.H. Robinson and was there when they acquired American Backhaulers.
4. The Freight Pod. Andrew Silver interviewed Kevin Nolan who was also at C.H. when American Backhaulers were acquired.

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