What it’s like to run a customs brokerage. Slate’s Working Podcast: Season 2, Episode 4 transcript.

What Do Customs Brokers Do? Working Podcast: Episode 4 Transcript.

What Do Customs Brokers Do? Working Podcast: Episode 4 Transcript.

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April 6 2015 12:17 PM
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The “How Does a Customs Broker Work?” Transcript

Read what Adam Davidson asked Larry Lieberman about his workday.

Larry Lieberman.
Larry Lieberman.

Photo illustration by Slate. Photo courtesy of Larry Lieberman.

We’re posting weekly transcripts of Season 2 of Slate’s Working podcast for Slate Plus members. This season’s host is Adam Davidson, the co-founder and host of NPR’s Planet Money podcast. What follows is the transcript for Episode 4, which features Larry Lieberman, the president of New York Customs Brokers. To learn more about Working, click here.

In addition to the transcripts, we’ve added some other Slate Plus perks for Season 2 of Working. The members-only version of each podcast will feature a short Slate Plus extra, and we’re also allowing members early access to the podcast—look for it to publish on Sundays. The nonmember version will publish on Mondays.

You may note some differences between this transcript and the podcast. Additional edits were made to the podcast after we completed this transcript.

Adam Davidson: What is your name and what do you do for a living?

Larry Lieberman: My name is Larry Lieberman. I’m the president of New York Customs Brokers.

Some of you might ask what a customs broker does. Customs brokers works with importers. And we get their shipments cleared through customs, and any other agency that might get involved with that particular shipment.

Davidson: So, help me understand why I would want you. Is it so complicated a process to import?

Lieberman: It is complicated, and most people prefer to use a customs broker, rather than attempt to navigate through the various agencies and paperwork involved.

Davidson: So, walk me through a few shipments, a few types of shipments.

Lieberman: I am going to go to my computer, and go to the software that we use. It’s obviously technical.

But this is a shipment of pasteurized crabmeat. For this particular company, they bring in three or four containers, 40-foot containers of pasteurized crabmeat—which, if you’re going to dinner tonight, you might have one of those crabmeat appetizers. And this is where it comes from.

And then we’ll go to Indonesian frozen shrimp. And this is a shipment that we deal with every single day of the week. In this case, it goes to Port Newark Container Terminal, which is where the steamship line is arriving.

This information that we input automatically gets sent via our software to Customs, who then transmit the same information—that the shipment is released or will be released by FDA—and, eventually, that same information will get transmitted to the terminal where the steamship comes in. And they will see, in their computer, that the shipment is released, and then can be delivered to the trucking company that picks up the container. All done electronically; don’t have to leave my office.

Davidson: Can we see some of the other stuff? It’s just fascinating to see what comes in.

Lieberman: Sure. What have we got here? Let’s see.

Toys. OK—toys from China, which is where most everything comes in if it’s not seafood. This is a full container, 40-foot container of children’s toys.

Davidson: Wow, and it looks like they’re bringing in a lot of different containers of toys.

Lieberman: Yeah, yeah, they’re bringing in containers almost weekly.

Davidson: What value are you adding? I mean, they’re giving you the information; they’re telling you what’s coming, where it’s coming from. I still don’t fully understand what you guys are adding.

Lieberman: OK. It’s either an air shipment or an ocean shipment. If it’s an ocean shipment, we will get a bill of lading like this, which states “Orient Overseas Container Line.” This is more seafood. Let’s see—frozen, cooked, farm-raised white shrimp.

Davidson: Wow, you bring a lot of shrimp in.

Lieberman: There is a lot of shrimp that gets eaten by the public in the United States, if you have the money to do so.

Davidson: Peeled and delivered tail on skewer.

Lieberman: That’s correct, and it is going to a freezer facility in Elizabeth, New Jersey.

Davidson: And so this particular shrimp is coming from Thailand.

Lieberman: It is coming from Thailand, and it is more than likely farm-raised. It is. It is harvested by aquaculture; that is so.

Davidson: And so the person who’s importing this—that’s your client?

Lieberman: That’s correct.

Davidson: And that person—why don’t they just send this to Customs? Why would they pay money to you to send it to Customs?

Lieberman: They’re too busy selling their shrimp or their children’s toys, and they do not want to be dealing with customs regulations. They have no idea what the customs regulations are. I’m licensed by the government, so it’s a private enterprise, but licensed by the government to act as a customs broker.

Davidson: So, walk me through your day. What do you do, as the president of a company?

Lieberman: Sales, and I put out fires.

Davidson: And how does sales work? How do you recruit new clients?

Lieberman: Well, in my particular industry, I can call on anybody that imports. It’s, it’s up to me, as the president, to find out who is satisfied, and who is not satisfied with the present customs broker they’re using, and/or prices of course. Everybody is looking for a buy, but they certainly want the service.

Davidson: How many are there of you, in America?

Lieberman: In America, there are multiple thousands. At JFK Airport alone, I believe there are probably 300 to 400 customs brokers. That’s only at Kennedy Airport.

Davidson: Right. I should say, we are right now basically under the flight path of Kennedy Airport. We’re just a few blocks—we could walk to the terminal from here.

Lieberman: You certainly can

Davidson: So, walk me through some of the fires you put out this week. I’d love to hear about, as much as you can, some specific examples.

Lieberman: OK.

I had a particular customer this morning that had a container at the pier. So, it was going to cost him $500 if it didn’t move off the pier. And it was all a matter of a couple of hundred dollars that wasn’t paid to the terminal, but that check had to be there overnight. So, we issued a check on behalf of the importer. We sent the check overnight. They received it at 8:47, I believe it was, this morning; yet, they refused to put it into their computer, and send over that information to the terminal so the trucking company could pick it up.

Even though they had the check in front of them—they confirmed it was received by FedEx—they refused to input that information. That was a fire that needed to be put out. And things like that occur on a daily basis.

Davidson: That—I have to say, that sounds like—I hope you’ll forgive me for saying this—the worst job in the world. It’s like when I have to deal with the phone company or the cable company, and I’m on hold for an hour—that happens to me, like, twice a year, and I hate it. And that that happens to you all the time.

Lieberman: All the time. That’s why I said, I put out the fires. It’s something that needs to get done.

Davidson: So you’ve been doing this for 37 years. How do you get into this business?

You know, I think two days ago, I didn’t know this business existed. How did you find out about it? How’d you get into it?

Lieberman:  Well, originally, my grandfather was in the trucking business. It was during the Prohibition era. And he in fact was moving alcohol illegally, as many people did many, many years ago.

Davidson: And he was a guy who knew a guy?

Lieberman: Yeah, he was a guy that knew a guy—exactly.

And he had a small pickup truck, which grew to a, a smaller truck. And, eventually, somehow, he got to working here, at what was then Idlewild Airport—later turned into JFK. But my grandfather was working at Idlewild Airport, moving freight around through some connections he must have gotten over the years.

So, originally, when I was 17 years old and got my driver’s license, I was driving a truck. But it happened to be that that original trucking business got into moving seafood from JFK Airport into the Fulton Fish Market. So–

Davidson: Just by happenstance.

Lieberman: Just by happenstance, yeah.

It’s just a matter of how business works—that eventually my grandfather, who—then my father took over the business—being around the airport, must have had a contact somewhere, that one customer leads into another. And he had refrigerator trucks, started moving fish, and I guess that’s why I’m still in the seafood business—just at, at another end, another venue.

Davidson: And how was it when you started 37 years ago? What were days like then, and how are they different?

Lieberman: They were very different.

Obviously, there were no computers. We used a typewriter. Everything we do today was hand-typed, and we physically had to move these documents to US Customs. So, we would use a messenger.

Every single shipment, instead of being transmitted electronically, had to physically be taken to U.S. Customs. And then, they physically inspected every single document, as well. That no longer exists.

Customs examines probably less than five percent of all shipments. But that examination is done using computer algorithms that can tell them which shipments should be examined, as opposed to those importers that may import 50, 60, 70 shipments a week, and are at a very low risk tolerance level.

Davidson: The volume of trade has expanded dramatically for the US as a whole. You talked about China. My hunch is, 37 years ago, China was less of a factor than it is today. Can you talk about that—how the whole amount of stuff being shipped has increased?

Lieberman: Yeah. Trade, world trade did not exist 30 years ago the way it does today. The world is a lot smaller.

Data moves a lot quicker, and the vessels are a lot larger. Each vessel that comes into the port is probably three or four times larger than they were 20 years ago, and they come in more often. So, the amount of cargo is astronomical, compared to what it was 20, 30 years ago.

Davidson: And how has that affected you? How’s that affected the business?

Lieberman: That’s a good question. There were probably fewer customs brokers. But at one time—although I was here 30 years ago—I would say 20 years ago, I had twice the number of employees, and I did half the amount of work. Today, I have six, seven employees, but I do two or three times the amount of shipments that I did 20 years ago.

Davidson: Just because of computer efficiency?

Lieberman: Correct. Like I said, we were using messengers to get these documents to Customs earlier. Now it’s just a matter of sitting behind a desk and typing in number after number after number.

Davidson: Has—I would imagine there was a time where being a guy who knows a guy—you know, being able to call up Sal over in Customs and say, “Come on, pal, you know me”—does that still work? I mean, do personal relationships still matter, or is it largely computers talking to computers now?

Lieberman: You hit it on the head there. The personal relationships did, in fact, exist years ago. And that does not exist today, other than the few inspectors that I know from 30 years ago that we can talk on the phone if I happen to call them. But it’s no longer, “Do me a favor,” or “He knows me and will get the shipment cleared.” Now everything is done electronically; no one knows the inspectors anymore.

Davidson: Wow. So, was this a community back then, and it’s not anymore?

I was talking to someone at Fulton Fish Market who talked about when they moved to the Bronx—because both used to be in Manhattan—that they stopped being a community. They stopped being a bunch of guys who grew up together, whose dads grew up together, whose grandparents grew up together, and it was now, really, people with jobs who didn’t know each other.

Is that the picture I should have of kind of the world of JFK?

Lieberman: You’re again right, because Fulton Fish Market used to be much more hands-on, and much more community-oriented than the way it is today, especially moving up to the Bronx.

It used to be in the Fulton Fish Market, people actually handled fish. They actually picked up those boxes with those fishhooks—if anyone remembers. Well, I don’t think those fishhooks are used any longer in Fulton Fish Market. Everything is done by a hand truck or a forklift operator.

Fulton Fish Market, you couldn’t use a forklift 30 years ago. There were too many potholes on the street.

Davidson: And how about here, at JFK? Is this less of a community?

Lieberman: Also, again, yes. It used to be, 20 years ago, where I had to get in my car and drive over to Customs—or drive over to KLM, or drive over to Iceland Air, or whatever airline these shipments were arriving at. I rarely leave my office on a day-to-day basis any longer—very rarely.

Davidson: So is the job worse now?

Lieberman: It’s not worse; it’s just very different. No, it’s no worse.

Davidson: Is it better?

Lieberman: Can’t say it’s better; it’s just different. Things stay the same, but they change.

Davidson: And I’m guessing you’re making more money, though, if you have half the employees, and you’re doing twice the amount of business.

Lieberman: I’m not so sure about that, either. I’m doing OK. I’m not complaining, and neither are my employees. I treat them well.

Davidson: But I guess everybody has those same dynamics of the competition, to keep prices in check, as well.

Lieberman: Unfortunately, we have not raised our prices in many years. There is an awful lot of competition out there.

And, of course, it has gotten easier to do the entries, so that has kept our prices in check, as well.

Davidson: So, the worst news in the world for you would be, “Hey, Customs has a brand-new system and it’s really easy. It’s just a website, and it’s very efficient and takes two seconds.” That would be bad news for you.

Lieberman: Absolutely. If that was ever to come to pass, it’s time for retirement for me. [Laughter.]

Davidson: So you’re lobbying for more complex, more difficult bureaucracy.

Lieberman: Absolutely. It takes probably close to $100,000 just to get into this business, because of the software, the computers that are required.

Davidson: That’s the main barrier to entry, is the computer technology?

Lieberman: That and, obviously, getting customers. Yeah.

Davidson: If I decided today I want to be a customs broker—so I would buy the software and the computers, and then I’d have to get a license, and then I have to convince importers that they should go with an inexperienced guy over someone who’s been doing it 37 years.

Lieberman: Either that or stay in another line of business.

Davidson: Which is what you’d prefer.

Lieberman: Absolutely, yes. [Laughter.]

It’s already competitive—stay out.