Radio Flyer Launches a Supply Chain in Europe
Radio Flyer has delighted children for more than 100 years with tricycles, scooters, ride-ons and wagons, including the #18 Classic Red Wagon, a popular product in the U.S. for more than 70 years. This case study looks at how an iconic American toy company opened a strategic global market for its products in Europe through the launch of the Tesla Model S for Kids.
The Goal: Expanding Business to Europe
Before 2016, Chicago-based Radio Flyer made most of its sales through retail outlets and direct shipment to consumers in the U.S. and Canada. But the company wanted to expand its business footprint by importing one of its newest ride-on toys — the Tesla Model S for Kids — to European retailers and consumers.
The company planned to do a soft introduction to avoid investing too much at once — something any company expanding into new markets can appreciate. Once the company developed a robust supply chain operation in Europe, it could establish a presence and make the rest of the product line available on the continent.
Radio Flyer had experience with U.S. e-commerce solutions, but its arrangements with local internet retailers in Europe had not proven to be financially viable: Each Tesla Model S for Kids is detailed after the ride-on vehicle is shipped from Asia, so license plates and other features would have to be obtained from vendors in Europe and packed with the vehicle before being shipped to customers.
In addition, the company had not previously shipped directly to consumer homes in Europe, according to director of operations and sustainability Eric Selner. “To make final mile deliveries, we needed to find specialty carriers, navigate shipping regulations, understand the VAT process, and more,” said Selner.
As a U.S. company, Radio Flyer looked for a logistics partner that had both local market expertise in Europe and strength in the home market. A friend referred Selner to C.H. Robinson. He liked the fact that C.H. Robinson had a global presence, since that would make it easier for Radio Flyer to expand to other regions of the world.
“Another big reason for choosing to work with C.H. Robinson was its familiarity with the complexities of doing business in Europe,” said Selner. “We were talking to several 3PLs [third-party logisitics companies] at the time, and C.H. Robinson was able to best answer the questions we had. We felt confident that choosing [them] would allow us to achieve our goals.” C.H. Robinson also introduced Radio Flyer to a partner that would help handle the tax side of the business equation to meet European regulations.
Radio Flyer and C.H. Robinson developed a complete solution that moves products from the port of entry in Europe all the way to consumer doorsteps. Together, they identified the requirements, overcame challenges, and coordinated a launch plan for shipping the Tesla Model S for Kids in Europe.
Executing a Comprehensive Solution
Radio Flyer produced the Tesla Model S for Kids through Chinese partners and shipped the product by ocean, primarily using full container load (FCL), to the port of Rotterdam, Netherlands. There, C.H. Robinson handled customs clearance and moved the product by barge to the warehouse in Tilburg.
In the warehouse, C.H. Robinson supervised storage, pick and pack services, and order fulfillment. The company helped identify providers in Europe who could manufacture the customized license plates, flyers, and other materials to be included with each ride-on vehicle. It also managed over-the-road transportation to ship the product to customers.
As is the case in the U.S., coordinating final mile delivery in Europe remains one of the transportation industry’s greatest challenges. This is especially challenging for products like the Tesla Model S for Kids, which is too large ship by a regular parcel delivery company. C.H. Robinson made special arrangements with European carriers and country-level specialists to arrange for delivery to consumer doorsteps.
In October 2016, Radio Flyer’s European supply chain was in operation, with a few cars shipping per week. By Christmas 2017, the program had expanded significantly: More than 100 cars were being shipped per day.
“Alone, there were too many hurdles to overcome in accessing the European market,” said Selner. “With C.H. Robinson’s support, we now have a firm fulfillment channel established in Europe that will allow us to pursue other opportunities.”
Selner praised Robin Kruijt, C.H. Robinson’s business development manager in Amsterdam, for helping make this project a success. “[Kruijt] spoke frequently with our team in the United States and Hong Kong. When we faced challenges, he found a solution. The project would not have been successful without his dedication and creativity,” said Selner.
Kruijt believes the growing relationship between the two companies is the real key to success. “Radio Flyer and C.H. Robinson shared the same hands-on strategy,” he said. “Together, we are improving their supply chain and helping them grow their global presence.”
Due to the successful launch of the Tesla Model S for Kids in Europe, Radio Flyer has expanded its relationship with C.H. Robinson. The two companies continue to work together, supporting the transportation of other products and securing additional third-party warehouses throughout Europe for timely fulfillment.
“Radio Flyer is a beloved company in the United States. Generations of families have created warm memories while using our products. We hope to create the same legacy in Europe, and C.H. Robinson will help us make that happen.”