It’s difficult for any company to achieve a 100-years in business. But for a family run international freight forwarder to eclipse the century mark is a remarkable achievement.
One hundred. Tortoises regularly make it. Wilt Chamberlain scored it once in a city named Hershey, Pennsylvania, far better known for chocolate than basketball. In the sport of Cricket, a century triggers celebration. But international freight forwarding isn’t cricket and lasting a century as a family owned business is extremely hard to do, which makes the Baltimore-based John S. Connor Inc.’s story so remarkable.
The company was founded by John S. Connor in 1917 during World War I. When asked about the timing of the company’s inception, Lee Connor, the grandson of the founder and CEO of the Baltimore–based logistics company, explained, “My grandfather had been working in the ship agency business before that for a local company here in Baltimore, … he thought there was an opportunity for custom brokers and forwarders and so he went and got his customs broker’s license in May of that year . He attained it and then the story goes; he borrowed two or three hundred dollars from his mother and hung his shingle.” In the beginning, he opened the office at 33 S. Gay St. which was close enough to Baltimore’s old Customs House for messengers and documents to be moved back and forth by foot.
Initially, John S. Connor was something of a one-man band, “He was a one [man] office with a phone and a desk and a type writer in there and he was in business at that point. And he was a one-man band for at least a year or two and then he brought his brother, Walter Connor, into the business. And the two of them were a pretty good pair - Walter was more on the inside and John was on the outside, doing more of the sales…”
Connor says the business was able to grow and the brothers were able to hire staff but John S. passed away in his late forties, leaving ten children and Walter to take over running the namesake company.
This happened right around the beginning of World War II and as Connor relates, “that’s when they had a really good period of growth.” The company secured some business involved in the ‘Marshall Plan’ [rebuilding plan for Europe] after the war so the company got involved in doing exports to Europe.
At the same time, the company got into the ship agency business as well. “Walter [Connor] had some connections there and we were doing exports for some coal companies back during the war. A lot of the Liberty ships were built at Baltimore and they were running over to Europe with coal for fuel. Some of the exporters were also chartering the ships, which at that time they were only carrying ten or twelve thousand tons. They [John S. Connor] were handling the exportation formalities for them [for the exporters’ convenience] as they also needed some way to be the agent for the ship, to get the tugs and the pilots, and get the ship in and out of the berth as quickly as possible. So, that’s when we got in to the vessel agency business on the bulk cargo side,” Connor explained.
The Business of Change
For any forwarder to stay in business for any length of time, the ability to adjust to industry change is paramount. For John S. Connor that included adapting to the biggest industry change of them all: The Box.
Lee Connor says he “heard stories about it [unloading pre-containerization] when I was getting into the business in the seventies. About how before that the ships with the break bulk heads would come in and they’d be small break bulk ships with a lot of ships’ gear, moving cargo and that’s what pallets the stuff along on to the ships, and the ships would be in for two, three or four days…And then the containers started and they’d come in and be in for 10 hours. Unload a bunch of boxes with all the stuff inside it. So, it dramatically changed the business but helped the business grow and be more efficient as well.”
But the change wasn’t confined to containerization. “In those days, in order to clear cargo through customs, you still had to have an office with a customs comment in the port of discharge. So, we had a lot of business of import, and also had a lot of business from the New York brokers and the Chicago brokers who were having goods cleared in Baltimore, but didn’t have their offices here. Brokers did a lot of work for each other back in those days. And you had your corresponding brokers. If we had cargo in New York, we’d have one of our correspondents in New York clear that cargo and vice versa down here,” Connor said.
However, it all changed overnight, that went away with remote location filing and the famous U.S. Custom commissioner [William] Von Raab’s “automate or perish” dictate. Von Raab, who was Customs commissioner 1981-89, as Connor’s explains, “…tried to put the fear of god in to all the brokers with that statement [automate or perish] …and I guess he did as we were one of the first brokers in Baltimore to get a computer…It seemed for all his faults [Von Raab], you have to give him a little bit of credit for that because he forced the industry into automation. But we [brokers] handle so many more clearances now, and the lines are so great and that’s why customs needed to automate and that’s why they forced it because [some] needed to automate and some of the broker’s community had to be dragged along,” Connor added.
Another change that was a derivative of automation was the introduction of national permits. As Connor explains, “From that automation you ended up getting the national permits, so you could file anywhere in the country. It was a very controversial thing in our industry because a lot of the small to medium sized brokers said ‘no, we’re based here in Port ABC, and that’s where we’ve always been and that’s where we’re going to be. We use our port brokers but if you have this national permit then the big guys are going to swamp us.’ We [John S. Connor] looked at it differently, one of my predecessors always said ‘well you know, we can do it all here in Baltimore if we have our own location filing and the right technology. You can be in a corn field in Kansas and file entries anywhere in the country.’ That’s the kind of approach we took and we were one of the early adopters of remote location filing.”
While automation was a major challenge for brokers, 9/11 completely redefined the industry. Connor says, “In my mind…maybe the biggest change of all this was probably since 9/11, the whole security arena. That has put brokers and forwarders in the front lines as our security apparatus - because of regulatory changes like the automated manifest, the import security filing ISF…we handle a lot of food products, so FDA with the bio terrorism act, and their advance prior notice requirements [is more work and a big change for the brokers].”
And Connor thinks there is more regulatory change in the pipeline. Connor says, “there’s still more regulatory things being done. The TSA was formed, homeland security, customs came under homeland security. And TSA came alive for air cargo which was a big impact on us and our air cargo security program. That was another place we had to change the way we do our work and service our customers. But we also were able to add value to our customers.”
The next 100
When asked by AJOT why John S. Connor remained family held after all the industry consolidation of the past couple of decades, Connor explained, “Well I’ve told this story a few times, I remember 20 years or so ago, I came into my office from an up and coming group in our industry, and they said ‘you guys have really got to do some things differently, you may have to look at selling out because these big guys are growing and growing. And if you don’t get big, you’re going to be shrinking to ma and pa and go away to nothing eventually because you won’t be able to keep up.’ Yet here we are 20 years later, and many of the up and coming are gone.”
Connor further believes that the independent forwarder has a niche that is readily replaced by the larger multinationals. “We had to gear ourselves to small, medium sized businesses and markets that really need us and values this service we provide. Because they won’t get some of that attention and hand holding from a big multinational. Ideally they’re going to get in to it and see an opportunity and they’ll grow and we’ll grow with them.”
He added that while some of the companies left for larger multinationals because they themselves grew and felt more “comfortable” with larger multi nationals. “But we’ve also had a couple of those come back to us at some point, if it didn’t work out, they weren’t getting the services they’re used to.”
Although hitting the century mark is impressive, Connor says the company is in growth mode. “For us we think we still have to sell our value added to other customers that are in the market place using somebody else… And we keep our eyes and ears open for opportunities to grow by acquisition ourselves. There are companies that are smaller companies may be looking for an extra strategy and could help us expand our footprint.”