Luggage shippers capitalize on airport hassles and airline fees

Richard Altomare has a lot to thank his wife for. He says it was her "seven pairs of black shoes" that made their suitcases so heavy that he hurt his elbow hoisting bags as they left for a golf vacation in Scotland.

Altomare spent the trip wearing a cast -- and hatching a plan for a service that would let travelers ship, and therefore avoid handling, their baggage while on the road.

That was in 1995, before 9/11 and subsequent crises made traveling with baggage a growing annoyance.

Today, long airport lines, an increase in mishandled baggage, theft, rising airline fees and more restrictive baggage allowances are converging to raise public awareness of shipping options.

Altomare believes the company he founded, Luggage Express, a division of Universal Express in Boca Raton, Fla., was the first created specifically to ship travelers' goods.

It didn't take off very quickly, at first handling about 20 suitcases a month. At about $200 a bag, the service was expensive. Now, Luggage Express is growing 100% a month and "gets more business every minute than we used to get every month," he said.

Altomare is poised to grow Luggage Express still faster. He says he is far along in negotiations to sell through Air Canada and American Airlines, is negotiating to buy a competitor and is awaiting approval "any day" from Florida for his plan to franchise the business.

The company gets 35% to 40% of its bookings from "hundreds and hundreds" of agents, according to sales manager Marissa Monroe. Earlier this year, Luggage Express launched a partnership program with retailers, involving joint marketing, training and potential price discounts.

A decidedly upscale clientele

As for the proposal to partner with airlines, Altomare said airline res agents would offer the baggage shipment option to customers who book by phone, at about $40 to $50 a suitcase.

Altomare says he has 40 prospective franchisers in the U.S. willing to pay $350,000 per territory and three more overseas who want rights to serve entire countries for prices ranging from $3 million to $8 million.

Altomare, CEO and chairman of Universal Express, has competitors now, but their numbers are small. Baggage shippers have seen their businesses grow quickly, with especially sharp hikes last summer after governments imposed new restrictions on carry-on liquids and gels.

In general, the customer mix is generally a combination of wealthy or upper-middle-class people, business- and first-class passengers, families with lots of baggage, cruisers, travelers on extended trips, seniors and sports enthusiasts with cumbersome gear. Business travelers are a smallish segment.

Services cover much of the globe, with some vendors shipping to and from 200 or more countries and territories. They say Mexico is the most difficult market for most because its customs officials are unpredictable.

Altomare, whose company moves 15,000 bags a month, envisions a day when the price will be $15 per bag and everyone will fly without bags, making for more efficient and safer travel. (He also wants to start a "luggage-free airline.")

Others don't foresee such widespread usage. "We're not for everybody," said Jon Trevelise, CEO of Sports Express in Houston. "The market will grow, [but] people won't be driven to us by low prices."

Ray Walters, CEO of CruiseShippers in Phoenix, agreed that the potential was good, but he estimated that fewer than 2% of travelers look at this service. CruiseShippers customers pay an average one-way fee of $80 per bag domestically.

In Walters' view, baggage shippers will hit the jackpot if U.S. airlines start charging separately for checked bags. As of June 20, Spirit will begin charging $5 or $10 per bag, not a fee likely to drive budget-minded customers to third-party shippers. It will be a different story if airlines follow British Airways, which in some markets charges about $240 for a second bag.

New players see opportunities, too. Zeke Adkins and a partner founded Boston-based Luggage Forward three years ago, placing heavy emphasis on electronic services like online and wireless tracking.

Luggage Forward will assign travel agents unique codes and URLs, Adkins said, to enable them to link Luggage Forward to their own Web sites. When clients book, the agency is identified and gets an 8% commission, he said.

Adkins said Luggage Forward was the only vendor with real-time, online booking internationally, offering prices in several currencies.

Big potential

Nevertheless, most customers come from the U.S. where there is "lots of opportunity" in addition to the "huge amount" of potential overseas. In the not-too-distant future, Adkins said he expected the airlines to charge for checked bags.

"When airlines put a price on that, people will look for alternatives," he said.

The Luggage Club in Oshkosh, Wis., is the "baby" of this business, said cofounder Todd Kempinger. He and partner Gene Lagenecker launched the business a year ago.

The key to growing, Kempinger said, is developing consumer awareness, which happens as a side effect of any big crisis. His company, then only a few months old, got a big boost when the London crisis over possible liquid explosives occurred.

"It was amazing," he said. "We started getting press on morning shows."

Meanwhile, the company is now pushing to bring agents on board, Lagenecker said. In March, the Luggage Club began taking bookings through Sabre and launched an agent portal at its Web site. Kempinger said the partners expected the number of selling agencies to increase dramatically.

Some agents don't expect to sell shipping services often because of the prices, which can be more than $100 one-way to take a standard suitcase across country.

Elayne Edelman, managing director of the Regent Group in Beverly Hills, Calif., has the right clientele but has them self-book baggage shipping. She worries about liability if something goes wrong. Nevertheless, she recently found herself assisting a client who was charged a duty when his bags returned to the U.S. even though the contents had not been purchased abroad.

When she shipped her own bag to a cruise ship in Monte Carlo last fall, she said that it was "wonderful" to find it in her cabin, but her clothes were damp and crumpled. She also had some trouble finding the pick-up service at the end of her trip, in Venice.

Bags are usually picked up a few days before travel.

"Passengers have difficulty with that lead time," Edelman said, "but it is wonderful to not have so much baggage; there are no two ways about it."

She said that concern about baggage actually kept some people from traveling.

This year, Cruise One in Coral Springs, Fla., started systematically offering shipping. It markets Luggage Express as a partner in Luggage Express' new agent program. This fits in with the agency's business plan to focus on luxury cruise products, said owner Ron Scavron.

Commissions (Luggage Express pays 10%) are a bonus. He said his main motivation was getting customers what they want.

Frosch International Travel in Houston started booking shippers for clients several years ago to ensure a hassle-free experience, said Richard Leibman, chairman. Customers buying expensive cruises are "keen" to use the service, he said. He tried it once himself, describing the service as "fantastic" but "not cheap."

To contact the reporter who wrote this article, send e-mail to Nadine Godwin at [email protected].