Logistics business grows beyond toy company
This article was published today at 1:54 a.m.
PHOTO BY ANDY SHUPE
Longtime friends Rodney Redman (left) and Michael Bahn began RR Logistics as a way to help Redman’s family business. It now has about 30 regular customers.
Rodney Redman and Michael Bahn had no aspirations of working together when they first met.
That's because their friendship dates back to third grade, when the two played on the same soccer team in Bentonville. Like many kids, their goals largely revolved around playing sports and becoming professional athletes before reality kicked in.
About 30 years later, the longtime friends are teaming to run RR Logistics, a supply-chain management company operating out of Bentonville. Redman and Bahn, both 40, believe their familiarity and friendship has been a component of the young company's growing success.
"There's a trust and a comfort level there," Redman said. "Being buddies all these years, it just puts you at ease and you know you've got each other's back. That's a rarity nowadays."
Redman is owner and Bahn president of RR Logistics, whose foundation wasn't exactly built around solving supply chain and logistics issues for customers. Instead, the company was born out of necessity, fulfilling a growing need within the logistics arm of family-owned toy-maker Redman and Associates, founded by Redman's father, Mel.
Rodney Redman said moving freight internationally was costing about $8 million a year, representing one of the company's biggest expenses. So trimming those costs associated with the global supply chain was essential when he convinced Bahn to begin some consulting work more than five years ago.
Redman and Bahn eventually realized they could utilize their expertise and contacts to help others meet logistics needs as well. The company now helps to provide solutions through all forms of transportation, including truckload, less-than-truckload, intermodal, ocean and air cargo. RR Logistics also has a 26-foot box truck, storage and distribution solutions with 55,000 square feet of warehouse space in Rogers.
"It all started with our toy business," Redman said. "Michael was bringing over about 3,000 containers a year. Through that we developed key relationships that really give you an advantage in every aspect of logistics. Like getting it on board, you need preferred status. A guy could have the power to get you on a ship when there's no room. So having those relationships and that pull is big."
About 98 percent of the company's business is now dedicated to its customers, according to Bahn, growing beyond the toy business now mired in a legal battle with a Chinese supplier over a $70 million contract with Wal-Mart Stores Inc. Redman said the legal dispute -- which is scheduled for trial later this year -- has not had any impact on operations for RR Logistics.
Instead, the company continues to take advantage of a growing need for logistics solutions. Research from Armstrong and Associates, a supply-chain management market research and consulting firm, estimates 80 percent of Fortune 500 companies outsource their logistics. The study also indicates 96 Fortune 100 companies use some form of a third-party logistics provider to handle their logistics.
RR Logistics said it is working with three companies among the top 100 and, according to Bahn, has an overall customer base of about 30 steady clients.
"That intermediary just makes a lot of sense for a lot of people just because you've got to have that middle man," Bahn said. "The trucks are getting shorter or there's smaller fleets. There's things we can do that most people can't. But what works most for us is the ability to be more than just a logistics provider. We can also get the ins and outs on the retail side, the ins and outs on analytics.
"We can add more value than just being the guy to give you a rate quote."
Blue Horizon Products, a small Bentonville-based product development company, has benefited from its relationship with RR Logistics the past 18 months.
David Stout, the company's public relations director, said RR Logistics has become the company's logistics division. RR Logistics' expertise has been valuable in a number of ways, providing suggestions and solutions for nearly every aspect of a product's journey through the chain.
"They are able to give us door-to-door service. That's why we've gone with them," Stout said. "They actually can go and pick up our product at our warehouse in China, get it to the dock, get it on the water, over the water, through customs and to our end user for us.
"We have such a good working relationship with them now they're going to drop what they're doing and help us out when we need it. We have had experience working with another company, but they weren't as easy to work with and they may not be as streamlined. These guys are streamlined."
RR Logistics enjoyed revenue growth of 100 percent last year, according to Bahn. There is optimism for more growth in 2016 as well, although the company wouldn't go into specifics.
The longtime friends, who still spend time together outside of the office on a regular basis, believe their partnership can be a selling point to customers as the business grows because, Bahn said, everyone has the "same mission" and is on the "same plan." Stout said the RR Logistics team has felt "like family to us" as they work together for supply-chain solutions.
"I want people to say, when we get our name brought up, 'You need to work with those guys. They're going to do the right thing. They're going to be straight up with you,'" Redman said.
"It's a given we want to grow. But what I want people to talk about is, 'I want to do business with them because I know what I'm going to get.'"
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