Now and Then: U.S. Customs Brokerage Associations
As far as the evolution of the customs brokerage industry goes, what you don't know might just surprise you. Here are eight surprising facts about this service.
1. Was customs brokerage always national?
No. We are in the second 100 years of customs brokerage services as an industry. In the late 19th century, the predominant port was the Port of New York and New York City was the center of mainstream commerce. Business leaders of the time estimated that 80% of all commercial shipments traveled through the Port of New York. Customs brokers were family businesses run from the town of Champlain, New York by six or so families. The family businesses were known as "customs row".
2. What did custom brokers do?
Customs brokers were busy people. They physically counted and inspected all shipments. They stamped the boxes and signed, or sealed, the documents. They were the record keepers and we are not talking computers here. With the growth of brokerage services came prosperity. With growth of the industry, the custom families decided there was a need to organize and speak with one voice.
3. Who was the Customs Clerks Association of the Port of New York?
The first organization of customs brokers was the Customs Clerks Association of the Port of New York, a non-profit organization incorporated in 1897. The Association limited members to customs clerks in the Port of New York. America's isolationist foreign policies kept foreign trade away so customs brokerage remained a small but viable business that remained a family business.
4. Were customs brokerages affected by the Great Depression?
Absolutely. By 1933, the New York Customs Brokers Association incorporated and then replaced the Customs Clerks Association; however, it was still open only to New York customs brokers. The high tariffs caused by the Smoot-Hawley tariffs had slowed trade to a trickle and price competition was stiff.
By 1934, the government championed reductions in tariffs that began a renewed growth in the customs brokerage industry. At this point, the custom brokers realized that the government needed their association as a trusted voice within the industry to help guide government policies.
5. How did World War II affect the industry?
The Port of New York closed during World War II and the Port of New Orleans took up the industry standard. Freight forwarders now worked out of New Orleans, Mobile, and Tampa. In July 1945, the New York Customs Brokers Association amended its bylaws to include customs brokers throughout America as eligible members.
6. What happened in the 40's decade?
By 1948, the Custom Brokers and Freight Forwarders Association of America, Inc. incorporated and then replaced the Customs Brokers Association. Transporting goods to their destination was as important as clearing goods through customs. The change in the Association's name and focus acknowledged the partnership's importance to the industry.
7. When was the change to a national vision?
By the 1950's, the Association flirted with a change in its vision from a local to a national one. By 1962, the national vision was in full view and the Association changed its name once again, this time to the National Custom Brokers and Freight Forwarders Association of America, Inc. The name change recognized that the partnership is vital to the industry.
8. Were there other changes while moving from quills to computers?
Besides the structural changes described above, computers streamlined the customs broker's job. Most shipments clear customs before the ship even docks today. Computers streamlined cash flow issues, too. The Association still has many issues to resolve in the years ahead. Its strength lies in its ability to listen to its membership, to have the ear of its partners (like the U.S. Customs Bureau), and to affiliate with international organizations, like the International Federation of Customs Brokers Associations.
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Information provided by: U.S. Customs Dept. - Cole International
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