DEC. LCT: Following gradual steps can ensure cool heads and sound judgment prevail.
U.S. operators farming out clients to Europe can now tap a consortium that cuts out the middleman and lowers rates throughout Europe, while easing the concerns of companies and their clients.
Since formally launching in 2009, EuroLimousine.net has grown to 25 European chauffeured transportation companies in diverse metro markets. All share exposure on a website that allows them to make simple, direct connections between U.S. and European operators.
“We are not a network, but a family of companies that are all service driven and making sure that everyone gets a share of the market locally. It is very important to me that local companies within the local market benefit from the exposure of Eurolimousine.net,” said co-founder Reza Choudhury, owner and CEO of Reliance Worldwide Logistic Solutions Ltd. in London, which operates 45 chauffeured vehicles. Choudhury, 37, prefers the term “consortium” to describe EuroLimousine.net. “We are all free to trade with whomever we want. No one is bound to each other. It’s a free market and this creates better flexibility and choice within the consortium.”
How it works
U.S. operators simply go to the EuroLimousine.net website and click on the operator in the nation they would like to do business with. The European companies can arrange direct farm-ins from the U.S. and coordinate with other consortium members to arrange multi-point transportation for U.S. clients. More than 120 U.S. operators so far are using EuroLimousine.net.
Although certain operators are booking outside the bigger networks, they are still unsure and apprehensive of doing business this way, Choudhury said. Because of unknowns, trust, reliability and commitment are important factors in working with U.S. operators to give them quality and good service.
“Our goal was to get direct pricing,” said co-founder Karim Maachi, 35, general manager of Cardel Global in Paris, which operates 50-plus chauffeured vehicles and specializes in road show transportation. “We wanted to create a bridge between the U.S. and Europe. They can call us anytime and ask for a direct contact.”
Maachi credits the creation of EuroLimousine.net to “thinking differently: It’s a good idea to open the market to small- and medium-sized companies,” about 80% of EuroLimousine.net’s market.
Many U.S. operators have been too reluctant to directly arrange transportation in Europe, so they would call the larger, inter-continentally connected companies to set up European runs, Maachi said. “People then started to believe in us and in the concept and started to go direct,” he said. “Many companies have increased business in Europe by 100% and 200%.”
Direct dealing = best pricing
Using EuroLimousine.net for European farm-outs can save as much as 60% on rates when compared to arranging European runs through a major U.S. chauffeured transportation company or network.
In one extreme example, a U.S. operator had farmed-out a Paris airport transfer to a larger company with European connections that charged $700 for the run, instead of closer to the actual cost of $200, Maachi said. He explained that an American operator routing a European run through larger chauffeured transportation networks can end up with a farm-out cost marked up two and three times as the transfer gets handed off from an American city to New York to a European city and then on to the operator at the final destination. “You can have several companies involved between the original booking and the supplier,” he said.
Many U.S. operators didn’t know the high prices weren’t the only option when farming out to Europe, Maachi said. “When people learned about pricing, they were shocked. There is too much of a difference between what they were being charged and what the actual price is.”
Creating the consortium
Choudhury and Maachi met five years ago at the World Travel Market in London, where they started exchanging business. The operators then attended the International LCT Show and the National Business Travel Association events where they noticed the need for more European-based affiliates among U.S. operators. They gradually hatched the idea of EuroLimousine.net.
“In 2008, we attended the [ILCT] Show again, and at that time we realized we could do a lot more as a European company,” Choudhury said. “The whole LCT and NLA forum was geared around domestic. I thought there was not much of a voice for European companies. We said to ourselves that when we come back here we need to bring European values and more representation into U.S. trade shows.
“There are other smaller- and medium-sized companies in Europe that people can approach and do business with instead of going to bigger networks.” Maachi added, “We realized month after month that most of the companies in U.S. were using the big ones to take care of transportation in Europe.”
Choudhury and Maachi joined with Edward Ghebreal, CEO of Direct Way in Brussels, to form the nexus of EuroLimousine.net. In 2009, they launched EuroLimousine.net as a consortium of companies in Europe ready to make direct connections with U.S. operators. One year later, the trio redesigned all of their marketing materials, set up a booth at the 2010 International LCT Show, and grew from three to 25 companies under the EuroLimousine.net umbrella — one in each major city or market area in Europe.
“Local companies don’t have the infrastructure and the funds to go to the trade show and promote themselves, but if we all worked together as a unit with a clear strategy to bring new business within the consortium and sharing the cost, together we would be a powerful force promoting our local markets and also becoming specialists within our fields representing our own countries,” Choudhury said. “The NLA booth made a very powerful statement, and we received great feedback. That coincided with the downturn of the economy as operators looked for better pricing through affiliates.”
EuroLimousine.net does due diligence on the quality, pricing, and service of prospective members before allowing any one company to join the consortium, making sure only reputable operators are part of the brand. The consortium can grow beyond its 25 members, but it would do slowly since it doesn’t want to overload any markets with too many companies. Fleet sizes among members range from five to more than 50 vehicles, with most operators falling into the 30-vehicle range.
EuroLimousine.net members still handle farm-ins from major U.S. chauffeured transportation companies as well, and often help such bigger networks arrange transportation in more far-flung global markets such as Asia and South America.
EuroLimousine.net’s reach also works in reverse, since its members can farm-out runs to preferred U.S. operators that have done business with them.
Another advantage of EuroLimousine.net is its high level of insurance coverage. Choudhury points out that the minimum insurance level for a chauffeured transportation company in Europe is about $10 million per vehicle/per incident, compared to a typical $1.5 million/$5 million per vehicle/incident in the U.S.
It usually takes a company several years to create its own affiliate network in Europe, Maachi said, but with EuroLimousine.net that process can happen in just months. “Our goal is to open the market and make sure people save a lot of money. Thanks to new pricing, we can increase business in Europe.”
Karim Maachi, Cardel Global
+011 33 1 47 31 00 14
Reza Choudhury, Reliance Worldwide
+44 (0) 20 8127 8600
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