NCBFAA 1897-1997 : Celebrating Growth, Looking Forward to the Next 100 Years
(This copy was created for the NCBFAA Centennial Celebration. Readers are invited to contribute to this history of their organization. Inclusion of any backup materials that confirm the accuracy of a submission would be very helpful in the final decision to add the new information to this record. )
Foreign trade in America one hundred years ago was very different from what it is today The city of New York was the queen of commerce and the port of New York her king. According to records kept by Commodore Cornelius Vanderbilt, around eighty percent of all commercial shipments came through the port of New York. In this kingdom, there lived about half-dozen brokers and their "customs" families all lined up in the town of Champlain, New York. The street they lived on was known as "customs’ row." They were family businesses that valued hard work and service for every dollar they earned.
Customs clearance during that time was an all day affair involving physical counting, inspecting, record keeping, copying (with pen and quill), and affixing stamps and seals. Service, integrity and trust became the foundation upon which the industry would grow and prosper. With growth and prosperity came the need to organize and launch a collective voice.
It was on March 22, 1897, that the Customs Clerks Association of the Port of New York was incorporated. Customs brokers and clerks in the U.S. Customs Service of the Port of New York were eligible for membership. The Association was incorporated as a non-profit organization. For the first time, Customs brokers shared more than physical space: They shared ideas.
American industry was growing, but an isolationist philosophy kept foreign trade at bay. Growth for many brokers was slow, but steady. Company reins were passed on to wives, sons and daughters. Partnerships emerged and business continued with New York as the center of it all.
On March 9, 1922, the New York Customs Brokers Association was organized to succeed the previous organization. Again, only licensed Customs brokers of the Port of New York were eligible for membership. A decade later, on February 23, 1933, this organization was incorporated.
The aftermath of the Great Depression brought hardships to many Customs brokers. This was due partly to the Smoot-Hawley Tariff, which was the highest tariff in the history of the United States. Trade slowed to almost a standstill, and some historians believe that this tariff contributed significantly to the Depression. Price competition in the industry was fierce.
In 1934, F.D.R. and Cordell Hull addressed the issue of high tariffs. Bilateral negotiations reduced the tariff rates, which were then applied to all friendly countries. This started a series of tariff reductions that helped fuel the growth of the industry. Brokers recognized that government needed a better understanding of industry issues, and the Association became a valuable asset to the industry with profitability as the result. Government learned a lesson, too, as all took note of the importance of trade to the overall economy.
During WWII, the Port of New York closed: New Orleans took over and became the foremost port in the country. Most of the freight forwarders in New York moved to New Orleans, some to Mobile, Alabama, and some to Tampa, Florida. Signatures, stamps and official reviews remained the business norms. After the war, this shift caused the organization to change its membership. The bylaws of the New York Customs Brokers Association, Inc., were amended on July 19, 1945; to include all licensed Customs brokers in the United States. Gone forever was the limit of membership to New York firms only.
The 1940’s witnessed the emergence of the Freight Forwarder as a prominent partner in the industry. Transporting products to their ultimate destination became as important as getting those products cleared through Customs. On January 2, 1948, the Customs Brokers and Forwarders Association of America, Inc., (CBFAA) was incorporated to succeed the previous New York Customs Brokers Association. Changes in the bylaws made forwarders eligible as regular members on a national basis, and as associate members on an international basis.
In the 1950s, members who grasped the need for change readied the Association. Foremost of these changes was a national vision as well as a national name change. Some of the individuals involved in this process were Martin A. "Marty" Kerner (grandfather of Heemsoth-Kerner Corp.’s President Martin E. Kerner, Jr.), Walter J. Mercer, Frank A. Hult, and Steve Masson of the Port of Baltimore. Association Director Sam Shapiro brought the presidents of the local associations to the CBFAA, giving them a stronger and more resounding voice.
On June 6, 1962, the Association changed its name to the National Customs Brokers & Forwarders Association of America, Inc. (NCBFAA), to better reflect a new and wider scope. Restructured dues funded a national staff. Border areas and region designations with appropriate representation found new members to shoulder the industry’s increasing business concerns. Membership was open to international air cargo agents in the United States (CNS/IATA) and non-vessel operating common carriers (NVOCCs). Associate and Affiliate membership designations expanded.
Leonard Shayne, president of the Association from 1969 to 1974, had an open door policy that welcomed and embraced new people and ideas. After tackling the internal struggles of an evolving organization, Shayne used the Association’s larger and stronger base to tackle national industry issues. Containerization, insurance, bonding, and the usual dose of politics were faced head on. The NCBFAA was now ready to woo their vital partner, the U.S. Customs Service. More cooperation was needed not only with Customs, but also with the various governmental agencies that interfaced daily with NCBFAA members. During this stormy period when every facet of international trade was changing, it was Leonard Shayne who weathered the storm with a stronger NCBFAA.
Three crucial changes implemented by Shayne strengthened the Association for the following decades: (1) elections of board members by geographic region, (2) the creation of a serious lobbying force, and (3) the start of annual conferences.
During this time, the Association made great strides towards becoming a democratic organization. Although it claimed to be national, the NCBFAA never had a Board or a President that was elected by the members. That all changed when the NCBFAA leadership was nationally elected, representing a national electorate. As a result, Bill St. John from New Orleans became the NCBFAA’s first non-New Yorker president.
During this period of economic downturns and stagflation, cash flow issues were a major concern with many members carrying large receivables that were affecting day-to-day activity. Members directed their efforts at getting clients to pay promptly for services. One major issue, computerization, made substantial inroads during this period. Automation was making significant headway and Customs was just starting to initiate the computerization of its operations.
The 1980s and 1990s witnessed important advancements in information technology and an international trade boom. The agreement and plan with U.S. Customs to jointly move forward to develop ABI was an important program that significantly improved release times, especially in the seaports.
Today, most shipments are cleared over computer lines before the ships even dock. The wheels of competition are driven by service as well as price. International trade is a top priority in U.S. foreign policy, with NAFTA a prime example of new opportunities with new challenges. The Forwarder Broker industry has and continues to experience a tremendous period of consolidation. Words like "logistics," "one-stop shipping," and "intermodalism" are the terms used to describe the business of today and tomorrow.
Within this climate, NCBFAA responds daily to the needs of the membership. In January 1989, the Association influenced the overturn of the 50-mile container rule. Later, NCBFAA helped Congress develop a workable formula for the Customs’ user fee. The Association lent its support to the adoption of the Customs Modernization Act of 1993, allowing for a more hands-off, auditory style of oversight instead of the weighty transaction-by-transaction approach. Other Association achievements included the creation and implementation of the Certified Ocean Forwarder training program and its original Internet information service called FABnet (Forwarders and Brokers Network). The NCBFAA began its affiliation with the International Federation of Customs Brokers Associations, whose membership represents 16 countries.
"There are still many issues to tackle in the near future," commented Paul Wegener at the time vice president of M.G. Maher & Co., Inc., and a past president and chair of the Association. "Just one of the items that warrants prompt attention is the implementation of a standard classification and tracking system for all trucking and shipping lines, along with total industry automation," said Wegener. Other issues included the move toward larger vessels, the legality of electronic signatures, and the continuing battle for adequate compensation.
"As new people bring new ideas to the industry the fruits of their labors will continue to be more and greater opportunities for economic success," Wegener said, adding, "and for our customers, the benefits are competitive prices with more choices and levels of service."
The NCBFAA can be proud of its past as it looks to the future. The people of NCBFAA are still the best force behind the industry. They wear the badges of service, integrity and trust.
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