The Supply Side: RR Logistics eyes growth in 2016, after toy business ends

Editor’s note: The Supply Side section of Talk Business & Politics focuses on the companies, organizations, issues and individuals engaged in providing products and services to retailers. The Supply Side is managed by Talk Business & Politics and sponsored by Propak Logistics.

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Armed with a 26-foot box truck, two decades of logistics and retail expertise, Rodney Redman and Michael Bahn are eyeing growth and expansion in 2016 for their small supply chain solutions firm.

Rogers-based RR Logistics was born of necessity more than a decade ago as the logistics arm of then toy distributor Redman & Associates was moving more 3,000 containers of children’s ride-on toys made in China to its warehouse partner in California to be sold at Wal-Mart and other retailers.

“We were moving about 1 million pieces of international freight annually and it was the biggest expense we had at the time – $8 million or so a year,” said Redman, whose family owned Redman & Associates.

He said the company tried to control their own freight to reduce costs and that’s why he’s still in business more than two years since the toy business dried up in a legal battle with the Chinese manufacturer over Redman’s attempt to make products for Wal-Mart in the U.S.

Redman and Bahn have in the past few years worked to revamp their logistics trade. They have been best friends since the third grade and they remained friends growing up as their fathers worked together at Wal-Mart Stores Inc. Each said they cut their teeth in the retail trade business, but were drawn to logistics out of necessity first and now it’s because supply chain expertise is what they know best and what many small suppliers need help understanding.

VENDOR HELP
“We have started looking at small vendors that don’t have their transportation fleet and also are working to build some national business as well with customers like Nestle Waters and Anheuser-Busch,” Bahn recently told Talk Business & Politics.

He said the company uses every form of transportation, to include less-than-truckload, full-truck, intermodal, international container shipments and even small parcel delivery through a partnership with Federal Express. The duo also operates a 55,000-square-foot warehouse in eastern Rogers, where they manage storage for local businesses and some retailer suppliers.

“One key spot is the international freight we handle coming out of China, Thailand and Southeast Asia. We have a warehouse partner on the West Coast and we can stop the freight out there if we need to, or we can bring it into Rogers,” Bahn said.

This work is primarily with retail importers, like Redman & Associates used to do itself. Another area the company is expanding is its pick and pack program, which it does for a few suppliers and importers in the region. He said pick and pack business uses items shipped in bulk and tweaking them in some way or putting them into a display before sending on to the retailer.

“Lots of people can move freight from point A to B, but if something has to happen to that freight before it gets to the final destination, that’s our specialty,” Bahn said.

Aside from logistics help, the partners also work with product suppliers on their overall supply chain issues and will even represent them to Wal-Mart as a potential supplier on occasion. He said the worst thing a supplier can do is get a purchase order at Walmart when their supply chain is mess.

“We have a client out of Dallas that’s a linen supplier to Bed, Bath & Beyond, TJ Maxx and Home Goods. We worked to straighten out their supply chain. It was a mess. I went out to California and moved them from Chino to Long Beach and got them transferred in there. Now that they their supply chain is efficient we are working to rep them into Walmart and Sam’s Club,” Bahn said.

GROWTH CHALLENGES, OPPORTUNITIES
The partners said the biggest challenge they face is finding retail suppliers that control some of their own logistics on the ground in Northwest Arkansas. Bahn said there are not many companies in the pool.

While Wal-Mart and its suppliers will always be a focus for RR Logistics, the partners said they are gradually diversifying business elsewhere, getting logistics contracts with McDonald’s, Nestle and and Anheuser-Busch.

“We are working with Bed Bath & Beyond suppliers using our connections with the West Coast ports drayage and warehouse as well as the warehouse in Rogers. We pick and deliver to some 800 stores for them out of both warehouse locations,” Bahn said.

Being a former toy importer, Redman said it seems almost ironic that the logistics company has picked up a fair share of Mattel’s toy business coming out of China.

“We used to compete with them, not broker their freight and handle some of the returns,” Redman said, adding that retail returns are another growing part of the business.

Making lemonade from lemons, the partners said they are beginning to use their 26-foot box truck purchased for the now-defunct toy business and put it to use with final mile delivery and other short haul projects.

“We are doing final delivery for Ecovet, for the large conference tables they make and sell across the region. We take our truck, pickup the conference tables and deliver for them on an hourly basis. They were using U-Haul and doing themselves before we stepped in,” Bahn said.

Another practical use for the box truck is to help Wal-Mart suppliers set up displays and carry samples to the layout center in Bentonville and to other meeting places.