Iconic Baltimore customs broker and logistics services company Shapiro turns 100.
There’s a trite old saying that the first generation business owner builds the company, the second generation makes it a success, and the third generation destroys it.
As with most trite old sayings, there are bound to be exceptions. Look no farther than Margie Shapiro, president and chief executive officer of the venerable Baltimore logistics services and customs broker Shapiro.
The eponymous name is no coincidence—the company was founded in 1915 by Shapiro’s grandfather Samuel Shapiro (which was also the full name of the company until 2013), and celebrated its 100th anniversary in August. That there was such a momentous day to commemorate is a testament to the three generations of Shapiros that have helmed the company—from the founder to his son Sig Shapiro, to his daughter who rose to the top in 2002.
Margie Shapiro has overseen a tremendous period of growth as the company has expanded beyond its customs broker roots into managed transportation, forwarding, warehousing, purchase order management, and a range of import and export compliance services. She is also credited with modernizing the company’s stance on technology, a subject she readily admits her father, Sig, never warmed to. In a 1997 American Shipper profile on the company, Sig Shapiro said “I turn it on when I absolutely have to,” pointing to a PC. “I prefer to use my head first.”
The third generation Shapiro demanded a focus on IT early on in her tenure as CEO, seeing how quickly the industry was changing around her family’s company. Now the company proudly emphasizes its proprietary technology capabilities with customers. In a hyper-competitive market for forwarding, logistics, and customs compliance services, Shapiro attracts customers that want customized service.
Shapiro handles big name accounts across its business units – for instance, it was the first (and for a time, only) customs broker to handle Amazon’s successful Fulfilled by Amazon (FBA) program. But like any family business, it was often about all hands on deck.
“The absolute earliest memory of the business will date me,” Margie Shapiro told American Shipper. “Our after-dinner activity back when I was in grade school was sorting cancelled checks. Maybe my parents thought it would hone my math skills. My brother, ‘the boy,’ was assigned the more rugged job of filing paperwork in a warehouse. How far we have come.”
Another tale highlights how cargo and compliance was an indelible part of her upbringing.
“In dad’s era, oftentimes Customs would request a sample of merchandise from an importer that we would obtain on Customs’ behalf,” she said. “Once Customs completed their review, they frequently returned the item to the broker, and the importer told us to keep it. Dad would bring home those samples with the invariable line, ‘this fell off a ship.’ He did that often enough that I started piecing it all together.”
Indeed, Sig Shapiro was the one who took his father’s import and export business—built initially on arranging grain shipments to the Allied Forces in Europe during World War I—and built it into an iconic Mid-Atlantic business. Chances are, if you needed to clear a shipment arriving at the Port of Baltimore, Sig was your man and Samuel Shapiro was your company.
The company grew significantly on the back of so-called “out-port” broker business (when the filing had to be done in the port in which the cargo arrived, local brokers would often serve this role for brokers in other cities). In the meantime, Sig Shapiro became as well known for his love of (and talent in) music, particularly jazz. It’s a pastime he still enjoys, after stepping aside to let Margie run the show.
As one might imagine, the stories from those bygone decades were rich. Up until 1934 duties were paid in gold as there was no Federal Reserve, so Customs wouldn’t accept bank notes issued by local banks. As recently as the 1980s, import entries had to be physically filed at the port (no doubt making Sig Shapiro and his disdain for computers very happy).
It took a bit of a detour into advertising, but Margie Shapiro was eventually drawn back into the world of freight, setting up the company’s Philadelphia office in 1991. After a brief period in the late 1990s when an outside executive was brought in to help modernize the company, she took the reins in 2002.
“I feel a tremendous responsibility to maintain the culture and integrity my father and grandfather built,” she said. “We want to have fun, but we also want to be indispensable to our customers.”
Her employees feel it, too. During an interview with some of the company’s top executives at the shiny new headquarters not far from the port, their appreciation for Margie Shapiro and the work her father and grandfather put into build the company was palpable.
“We have a track record of boomerangs,” said Supply Chain Director Angela Czajkowski, referring to current employees that left the company and came back. At present, about 20 of the company’s 125 employees are “boomerangs.”
“There’s democracy here,” said Shapiro’s Vice President of Strategic Development Rob Burdette. “It’s a mess, and there’s chaos, but it’s healthy conflict, and there’s respect.”
Burdette exemplifies that spirit as much as anyone. A former UPSer, he started at Shapiro prior to Margie taking over as CEO and is known for his sarcasm and proclivity for letting his feelings be known. He’s also a big part of how the company has kept pace in a rapidly evolving logistics market place. To wit, the company’s approximate revenue breakdown has changed from about 80 percent brokerage fees and 20 percent transportation in 2002 to about 40 to 45 percent transportation currently.
Small, regional, and even national brokers have sometimes found it difficult to thrive when large players—both U.S.-based and multinational forwarder/logistics giants can provide the same services as them but with other offerings and broader networks. But Shapiro prides itself on providing customized solutions to its customers. It develops its own proprietary IT in-house in an era when, in general, only the largest forwarders, brokers, and logistics companies have the desire to do so.
Burdette admitted Shapiro, despite a global agency network of trusted partners, can’t walk into a client meeting and proclaim a footprint that touches every part of the globe. The company has six offices on the U.S. East Coast and could conceivably run all its operations from Baltimore. But what Shapiro can offer is its culture, which percolates from the staff down to its customer engagements, and the flexibility to design specifically for its customers’ needs.
“It used to be when the global footprint was brought up, that was cyanide,” he said. “But customers really just want to be coddled. And we have a foundation of trust with them.”
Those successful relationships sometimes mean companies can outgrow Shapiro.
“I like to think of us as an incubator for mid-market companies,” Burdette said, meaning that Shapiro has helped them understand their trade compliance and transportation processes better as a mid-market company and grow to be a large company.
Sometimes that company keeps Shapiro on to manage a piece of its larger business, of course. As Czajkowski put it, “most customers see us as extension of their logistics department.”
Because Shapiro, like many diversified logistics providers large and small these days, has a broad range of services, the typical engagement starts with service in one area and grows.
“A large company may use us for brokerage and then ask us for our opinion on their transportation or warehouse provider,” Margie Shapiro said. “Using a best-of-breed approach, that’s becoming more of a credible model. Being all over the world is not the be-all and end-all.”
Indeed, Burdette said Shapiro is being asked to trade data with its ostensible competitors more often, a sign that companies aren’t necessarily relying on one service provider anymore (as well as a sign of the ubiquity of data flying around).
Aside from that general shift of shippers relying more on niche, customer service-oriented providers that Shapiro has sought to capitalize on, the company had to contend with a major change to its revenue model in 1995.
Until then, the company had relied heavily on serving as the expert local brokerage presence in its various ports. But when remote location filing (RLF) came into play, allowing permitted brokers to electronically file entries remotely, Margie Shapiro knew her company needed to diversify. It turned to freight forwarding, to supply chain advisory, and transportation management.
A decade later, the new headquarters is one piece of evidence that the strategy has paid off. The new office, in the Locust Point neighborhood of Baltimore, is a major change from the old one—a prime spot on Charles Street in Baltimore that felt like an old law office, Czajkowski confided. The new office is in a converted old brick building that used to be a Phillips crab canning plant. It has a look that’s modern and hip.
Czajkowski said countless hours went into the design of an office that would lure talent to the company. Next door is an office of Baltimore’s current apparel brand darling Under Armour. Hard to get more Baltimore than crabs and Under Armour.
The new digs jive with the company’s loose, but challenging culture. Constructive arguments are encouraged. Cross-pollination between teams occurs regularly. The new conference room was designed to fit everyone in the Baltimore office (the other locations are in Atlanta, Charleston, New York, Philadelphia, and Washington, D.C.).
Aside from Amazon FBA, it counts Five Below and AC Moore among its customers. About three-quarters of its customers’ key decision-makers are located east of the Mississippi, but its footprint is truly national.
As for the next 100 years—if the pace of change in logistics and global trade keeps up, who knows what the company will look like. Burdette, for one, would like everyone to simply know Shapiro is not only a customs broker. Either way, it’s hard to imagine a Shapiro not being involved, and the track record of integrity and success is largely attributable to a grandfather, father and daughter who wouldn’t have it any other way.
This article was published in the September 2015 issue of American Shipper.
