Building Forwarder Alliances

Dieter and Stephan Haltmayer in a conversation with FlyingTypers Publisher Geoffrey Arend at QCS Haus.

     In 1974 Dieter Haltmayer founded Quick Cargo Service in Frankfurt am Main.
     His idea was to offer a door-to-door airfreight service, an innovation at the time.
     Today in addition to being one of the most striking cargo facilities at FRA Cargo City South, there are Haltmayers all over the place at QCS with Mr. Haltmayer's son Stephan, and daughters Heidi and Jennifer building the company as well.
     Today Quick Cargo Service is a family affair and one of the five leading, privately owned IATA licensed forwarders in Germany.
     With seven branch offices at Germany's most important trade and industry centers, and a professionally trained motivated staff, Quick Cargo Service is well positioned as a leading forwarder and logistics provider.
     But Dieter Haltmayer is also a visionary.
     Dieter Haltmayer, was the main founder of IGLU Air Cargo GmbH, and he is currently the chairman of the company's advisory board.
     IGLU Air Cargo GmbH is a union of 21 medium-sized airfreight forwarding companies in Germany formed to strengthen collective buying and trading power.
     Here excerpted from an absolutely excellent presentation given last month in Dubai, Mr. Haltmayer discusses the formation, future and importance of forwarder alliances in the 21st century.
     His view is refreshingly void of self-promotion and can serve the thousands of small businesses who read FT as a primer of how to compete with the big boys in 21st century air cargo.

 “In 1999 Lufthansa’s airfreight management team explained to the airfreight industry that it was their goal to work with 12 Global Players and to forget the rest of the forwarders.
     We medium-sized forwarders had to consider how we could succeed outside the ranks of these top 12 agents.
     Lufthansa’s declaration was the beginning of IATA airfreight agents pooling their export freight.
     Groups of IATA forwarders came together to consolidate their freight in order to stay competitive with the global players.
     Today there are three large groups of this kind: Future, Challenge and Iglu Air Cargo GmbH. The combined German market share of these three groups is 20.3%.
     Suddenly the national carrier is once again taking interest in these groups.
     To be successful a midsize company needs a global strategy.
     Alliances and partnerships are the core-strategy in building success today and in the future. Alliances afford the small to medium forwarder the power to quote import rates from all parts of the world using carriers of our choice.
     Additionally the alliance generates routing orders for traffic to increase export flow.
     Each member of the alliance remains financially independent.
     In terms of jointly developed business, profits are shared.
     The Association of Common Interests in Airfreight, original German name is the Interessengemeinschaft Luftfracht or IGLU.
     The IGLU alliance consists of 22 IATA airfreight agents in Germany.
     IGLU Air Cargo GmbH is a worldwide single enterprise that was founded by strong partners with the intention of improving purchasing power and being successful outside the ranks of the top 12 global players.
     The objective of IGLU is to pool freight at home at the two hubs of Frankfurt and Munich in order to remain competitive in the market in the face of a growing concentration on preferred partners on the part of some carriers, but also as a result of some competitors’ strategies.
     Together the IGLU members have a combined IATA turnover of $53.3 million USD and are ranked seventh amongst top German consolidators.
     IGLU has real buying power in the market and all the other advantages that the big players have.
     IGLU management decisions, from budgeting to unified marketing strategy, are based on negotiation with other medium-sized partners. This requires sensitivity.
     The goals of IGLU are aligned to maintain and increase the competitiveness of both the cooperation and each individual partner in the long term.
     A basic strategy of the cooperation is to ensure a “win-win” situation for all involved.
     Results are regularly checked and evaluated and the partners are kept informed.
     Once a month the five-person committee meets to discuss any incidents of the previous four weeks with the IGLU manager.
     Through regular supervision processes are checked for any errors, and suggestions for improvement are passed on to the managing director as well as changes made where necessary.
     IGLU began in January 2001 with 5.7 tons per month.
     Freight from the numerous branch-offices of the IGLU members is consolidated in Frankfurt and sent to a neutral break-bulk agent at the destination.
     Today IGLU loads 700 tons of freight per month worldwide.
     The trend, I am happy to report is upwards as the monthly tonnage is growing.
     Units are shipped to the Far East, USA, Australia and more and more destinations are being added.
     Today IGLU serves 80 destinations worldwide.
     The original aim of the cooperation was to increase the competitiveness of its members.
     It is now the case that through their cooperation IGLU members are indeed competitive in the market.
     They enjoy the same starting-point as the global players.
     Through pooling our forces IGLU acquires strong buying power for securing rates, pallets and capacities.
     IGLU has firm pallet bookings with well-known airlines, which guarantees secured loading for the future too.
     Because we mainly load complete units rather than loose freight, security and supervision are substantially improved.
     Being able to load pallets leads to a higher standard of service and security.
     Furthermore, through the consolidation of individual freight orders, a higher frequency of departures can be offered.
     Revenue can be increased on a sustained basis through better rate-buying, through usage of ULD Rates, through a greater use of consolidation and through improved customer service.
     The result of work as a cooperation is profitable for all the partners involved.
     IGLU members enjoy the advantages of the big players, while remaining able to offer the kind of individual customer service that only medium-sized companies can muster.
     For Quick Cargo, the Chinese market for us is of major focus right now.
     However because China is difficult to control from Germany we founded the CCA China Cargo Alliance.
     The alliance consists of 50 to 60 Chinese forwarders with whom we have united under the slogan:
     “We Bring the World to China and China to the World ”.
     The Chinese forwarders and QCS worldwide partners meet annually in China in order to discuss air- and sea freight development through bilateral discussions with each member.
     Sales trips are organized within China and to all parts of the world jointly with the CCA members.
     Another alliance that we are part of is The World Freight Alliance (WFA).
     As a partner in the worldwide shipping business, we have recruited highly qualified service providers all over the globe, who look after our interests in each individual region of the world.
     WFA individual service providers have very good local knowledge to offer at their homeports and airports.
     Often the big players have no better representation themselves.
     WFA is represented across all five continents through top business partners.
     WFA members are able to compete with the global players and their preferred carriers.”