Consolidator IGLU went through an icy period after the pandemic hit the aviation industry in early 2020, stalling passenger flights and grounding thousands of jetliners. No flights, no lower deck capacity! It’s as simple as that. For a cargo broker like IGLU that consolidates shipments contributed by different member firms in order to get better rates per kilogram based on higher volumes, dire times began. Meanwhile, however, the sun has begun to shine quite brightly again, melting the ice cap covering the igloo.
The improved business climate is confirmed by Bernhard Stock, Chairman of IGLU Air Cargo GmbH and MD of EMO Trans Germany. He speaks of some light at the end of the dark tunnel. “Business is tentatively picking up again since capacity offered by carriers is growing week after week due to increased intercontinental operations.” Come Q3 and Q4, Bernhard expects flight activities to return near to normal. “This enables us to sign fixed allotment agreements with a number of airlines serving markets of high economic interest for IGLU; contracts that were suspended after the pandemic spread.”
On way to “old” normal
While Mr. Stock is already looking towards the light at the end of the tunnel, MD Günther Gasthuber had to present the gloomy results of last year’s activities to the IGLU members at the general meeting held last Thursday. According to his figures, flown tonnage declined 46% last year compared to 2019. In contrast, revenue looks slightly better, having only dropped by 14%. Sales also declined in fiscal 2020, totaling 2.5 million euros. "With the onset of the pandemic in the spring of last year, most airlines canceled the existing Blocked Space Agreements,” Mr. Gasthuber states. They did this because it was incalculable during the pandemic whether scheduled flights would be operated or not. So fulfilling transport agreements became kind of a gamble for all parties involved, jeopardizing established supply chains.
The big boys were better off. To keep their air freight moving as smoothly as possible, logistics giants simply chartered freighters or preighters. “A solution, which was out of reach for us since we were not able to contribute the freight volumes the big players are used to generating.”
Non-profit club IGLU should not be confused with the Salvation Army
Consequently, each time IGLU intended to send a shipment overseas, Günther Gasthuber and his team had to negotiate new prices with airlines serving sought-after destinations. Hence: The remaining surplus was “very manageable” during 2020 despite the extremely high-rate level.
IGLU is a non-profit organization incepted 21 years ago by QCS - Quick Cargo Service founder, Dieter Haltmayer, and inspired by former Lufthansa Cargo CEO, Wilhelm Althen. They stuck their heads together and came up with a simple deal: IGLU guarantees Lufthansa a monthly tonnage on a number of selected intercontinental routes operated by the airline and is offered – as reward – favorable kilogram prices. A win-win solution agreed between Haltmayer senior and Wilhelm Althen, based on allotment agreements negotiated each year anew, but the core concept is valid until today. From the airlines’ perspective, broker IGLU offers another advantage: a single point of contact, making engaging in sales and price talks with each of the 25 member agents superfluous.
A smart concept, born 2 decades ago
In recent years, a considerable number of carriers have jumped on the bandwagon by signing Blocked Space Agreements with IGLU as Lufthansa Cargo did two decades ago. Among them are QR Cargo, SAS Cargo, CV, TK Cargo, SQ Cargo, and AC Cargo, to name but a few.
At the organization's virtually held general meeting last Thursday, Bernhard Stock was confirmed in his position as IGLU Chairman. The contract with the group’s long-time Managing Director, Günther Gasthuber, was also prolonged. Jan Philipp Pohlmeier of Seagate GmbH, Jens Erkes of Gebrüder Weiss, and Thomas Waschke of agent JL Logistic were elected new members of the association's Executive Committee. Stephan Haltmayer of QCS - Quick Cargo Service was confirmed in his leadership function.
We always welcome your comments to our articles. However, we can only publish them when the sender name is authentic.