The New York Times The New York Times Business April 22, 2003

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Eric Mautner and Jane Ubell-Meyer at LuggageFree with packages of luggage that are being shipped to Florida for customers.

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BUSINESS TRAVEL

Finding Opportunity in Baggage Woes

By JOE SHARKEY

The airline service cutbacks and the airport security delays are bad enough. But what really maddens many business travelers is the knowledge that security guards are pawing through their checked bags, and airlines are increasingly acting as if a checked bag is nothing more than another brick on their load.

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And therein lies a business opportunity that a handful of companies are hoping to seize. Promoting themselves essentially as long-haul bellhops one, in fact, calls itself Virtual Bellhop they show up at your house or office, take your bags and ship them to the hotel or wherever else you will be staying, before you get there. Then, at the end of your stay, they ship them back home.

The most pronounced impetus for having someone else handle your bags, some leisure and business travelers say, came on Jan. 1, when federal law required the inspection of all checked bags, and inspectors began literally breaking into bags that were locked. Most bags are inspected by machine, but more than 10 percent of the billion-plus bags checked on airlines annually in the United States are now being inspected by hand, and complaints of theft or careless handling are rising.

"A lot of hands are going through that luggage now," said Eric Mautner, founder and president of Need It Now Courier Service, a delivery and specialty freight company that has a luggage shipping service called LuggageFree. "That has created a significant marketplace for us."

Mr. Mautner's company created LuggageFree two years ago at a time of chronic air traffic delays and mounting customer dissatisfaction about airline service in general, including baggage handling. Today, while both the delays and the complaints have plunged along with airline traffic, the tighter security has bolstered the incentive for some travelers to have someone else take their bags.

A further indirect incentive has come from the sharply increased use by airlines of smaller, cheaper-to-operate regional jets, which have limited cargo space. According to the Federal Aviation Administration, domestic airlines had over 900 regional jets in service in 2002, compared with 496 in 2000. As fleets shrank and cost-cutting measures tightened, airlines began imposing extra fees on overweight bags.

The delivery services that have sprung up to siphon off the bag-weary have been generally dependable, if occasionally late on pickup or delivery, business travelers who have used them say. In November, this reporter used Sports Express a Colorado company that expanded into personal luggage delivery after establishing a market in shipping sports equipment like golf clubs and skis to send a 45-pound suitcase from a hotel in Salt Lake City to a residence in New Jersey. The bag, shipped the morning of departure, arrived as scheduled the morning after, at a cost of $87.

"Shipping the family luggage was a lifesaver," said Alan Gallanty, a Manhattan lawyer who used LuggageFree to send four golf bags and two big suitcases both ways on a trip with his wife and two young children to Florida during a snowstorm this winter. "The airport was an absolute madhouse, with people lined up out the doors and into the slush" to check bags.

"We sailed right through," Mr. Gallanty said. "There was a cost, of course, but it was worth it to feel human and not to have to deal with all that stuff."

Mr. Gallanty said the service made sense for business trips as well. "If you're able to travel without checked bags, and you use e-ticket kiosks, you can cut out two hours at some airports," he said. "That's a significant amount of time for the business traveler."

For obvious reasons, airlines do not have any objections to competition for handling luggage. As airlines remove big planes on some routes and replace them with the smaller jets, "any bag we don't have to carry is a plus," one airline spokesman said.

Many airlines have begun charging extra fees of $25 to $80 for checking overweight bags, and Joe Brancatelli, the publisher of the online business-travel site Joe sentme.com, said the industry would probably like to extend the practice one day to making a separate charge for all bags, just as some already do for serving an onboard meal. "I think the future of the airline business is totally la carte," Mr. Brancatelli said. "So there's obviously a niche for companies that will pick up and deliver your bags."

Giant shipping companies like United Parcel Service and FedEx have long picked up and delivered boxes containing luggage, but the niche companies began carving out their space within the last two years. None claim to be making money at it so far, and none claim to be handling more than 400 deliveries a month. But all of them say business has picked up sharply in the last six months as travelers tire of all the commotion at airport baggage check-in counters.

Having a bag shipped one way costs about $2 a pound, or $70 to $80 for a typical large suitcase. The luggage service picks up the bag at a customer's home or hotel, and delivery is usually made the next day, using a variety of standard shipping services, including air freight.

For now, the high cost is limiting demand for the service to affluent travelers or business travelers carrying expensive gear that they do not want to entrust to airline baggage handling, said Richard A. Altomare, the chief executive of Universal Express.

Universal Express, whose main business is supplying services to 8,000 private shipping companies in the United States, provides personal-luggage shipping through its subsidiary, Virtual Bellhop.

Because most travelers balk at the cost of shipping a bag, Mr. Altomare said, the key to wider growth is developing marketing partnerships with airlines, hotels, casinos, cruise ship lines and travel package companies so that door-to-door luggage shipping will eventually be routinely offered as options for customers. Last year, Virtual Bellhop announced several alliances, including one with Fairmont Hotels and Resorts. Fairmont said that under the agreement, it would offer discounts for luggage delivery to members of its customer loyalty program.

"I look at these partnerships as a marketing edge for hotels, casinos and cruise lines to offer this as an add-on service: `Come to our casino, we'll not only comp you, we'll pick up your bags,' " Mr. Altomare said.

Universal Express is struggling. Its shares, trading all this year at about a penny, were recently rated "speculative" by an Investrend Research analyst, Jeff Howlett. He said, nevertheless, that there was real potential for a turnaround if the company succeeded in recent product and marketing initiatives, developed a domestic delivery system using interstate buses, and firmly established brand recognition for its subsidiaries.

But for the luggage shipping division of the company to prosper, Mr. Altomare said, monthly orders will have to increase from a few hundred today to "thousands and thousands." And for that, he said, reducing the price by creating promotional partnerships with hotels, airlines and others is crucial. "I can talk to people like my parents and say, `You should use this luggage service,' " he said. "But they say, `Well, we're not going to pay $70 for a bag.' But $30 or $40? `Hey, now we're interested.' "




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