Why success is Critical for IAG Cargo

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It has been reassuring for IAG Cargo director of sales and marketing Camilo Garcia that the market has welcomed the group’s new highest priority product, Critical, this year. In just its first six months, the group saw almost 2,500 bookings, notes Garcia, promising a substantial number by year’s end.

He says: “This is a premium product with a special tariff. We set it up as an emergency, last-minute, must-fly product.”

In July, the group launched a Critical Service Centre, a customer service team dedicated to Critical. The team of emergency solution experts monitor, advise and implement every single Critical shipment.

Garcia is convinced that the service is creating “new streams of business” for the group, not simply cannibalising existing business.

This revenue stream is likely to be from customers who would previously used an integrator, he says. “We do not know where the traffic is coming from but I think it is from integrators or other carriers.”

Garcia explains that one characteristic of the Critical service that clients take advantage of is that there is no weight limit for consignments. He says: “We have moved pallets using this product.” However, 95 per cent of consignments have been under 300 kilogrammes.

He was talking soon after the airline group released its Q2 2018 results, reporting commercial revenues of €281 million over the period from April 1 to June 30, 2018, an increase of 9.6 per cent on 2017 at constant exchange.

Overall yield for the quarter was up 10 per cent at constant exchange. Sold tonnes were flat and CTK volumes were down 0.4 per cent whilst capacity grew by 3.3 per cent as the airfreight market continued to see relatively strong growth throughout the first half of 2018.

These are interesting times for the airline group, believes Garcia. Significant investments at both London and Madrid hubs, including the construction of a new Constant Climate centre in Madrid and the continued development of Premia, the group’s new premium freight facility in London bode well for the future.

“We’ve launched our Constant Climate product and developed a centre in Madrid. This is for vital life-science cargo that is life-changing medicine. This is high value, premium freight,” he says.

In the second half of this year, the group will remain focused on investing in operation, embracing digital innovations and developing products and services to enhance how it deliver for customers.

Garcia is keen that while much is made of the digital transformation that is happening in airfreight, including projects such as the Unmanned Autonomous Vehicle recently trialled at London Heathrow, forwarders and shippers need to know that IAG Cargo is not abandoning commodity airfreight to lean on premium freight activity.

“In both areas, we will deliver added-value to our all clients,” he says.

FWD.Rewards

One product about which Garcia is excited is the FWD Reward scheme. Launched in 2017, the scheme, which is free to join, rewards small and medium-sized forwarders (SMEs).

He says: “FWD.Rewards has been a great success. Since we launched it, we have seen more than a thousand SMEs join.”

Rewards given to the companies that join include hotel accommodation for staff, cargo credits and even passenger flights for individuals.

FWD.Rewards is a loyalty programme specially designed to reward small and medium sized freight forwarders every time cargo is se