Visit Our Sponsors
In the age of social media, it's become a commonplace that people look for dates, and even mates, online. But how often does a company find its perfect match in logistics services providers while surfing the internet?
And yet, that pretty much sums up how the U.S. distributor of a Spanish brand of off-road motorcycles came to find the 3PL it needed to help it through the intricacies of importing, warehousing and moving the bikes around the country from dealer to dealer.
In August 2010, manufacturer GasGas Motos announced that all distribution of its line of motorcycles would be handled exclusively within the United States by GasGas Offroad US. The Spanish company had already penetrated the American market, but its previous distribution relationship had not been satisfactory. A growing dealer network was in place, but sales, based on a make-to-order basis, were few. It wanted a game changer. What it needed was a distributor with extensive contacts in the off-road and racing industry, who could ramp up sales.
It found that in a company that came to be known as GasGas Offroad US. Executives there had the needed experience in the industry, but there was quite a bit about importing they needed help with, says Clay Stuckey, vice president of sales and co-founder of the distribution company. (Incidentally, the name GasGas is a Spanish colloquialism meaning to "give it the gas" or to "speed it up.")
The solution was to bring in Airgroup, a division of Radiant Logistics. But therein lies the tale of how the partners met. As Stuckey relates it, as he searched the 'net for potential logistics services providers he learned that Radiant Logistics, in an effort to promote its brand and services, would be sponsoring a major off-road racing tournament. Stuckey felt he had stumbled onto a company that not only had the logistics expertise his company needed but which might employ some people who actually knew something about motorcycles.
He reached out to Radiant, and that's how Jack Morrison, General Manager, Major Accounts-Midwest, for Radiant's Airgroup division, entered the picture.
So Airgroup has essentially been with GasGas Offroad US from the get-go, handling all of its supply chain needs from overseas importing to distribution onto a dealer's floor. Additionally, Airgroup helped GasGas streamline its import logistics strategy by switching from the standard ship container to a 40-foot high cube so parts could be moved along with the motorcycles.
Airgroup also helped GasGas implement a so-called "virtual warehouse" system through which dealers receive flooring discounts for larger purchases but must allow dealer-to-dealer transfers of product. Airgroup moves the bikes and the American distributor foots some of the freight cost, but the virtual warehousing concept - not normally done in the motorcycle industry - has paid off for GasGas by allowing it to compete with much larger manufacturers.
The former distributor sold about 50 motorcycles, but GasGas Offroad US has moved more than 10 times that number in less than a year. Both Stuckey and Morrison feel the efficiencies built into the distribution network, as well as the virtual warehouse model, have boosted sales and promise much greater growth.
Previously, the motorcycles were imported into the Kansas city area, where the distributor stored them until he could ship them to the vicinity of a dealer, says Morrison. "The difficulty he was having was in the low volume - he couldn't really develop any sort of system to keep his costs down. He was shipping them out in a door-to-terminal system, where the dealers then had to drive 120 miles sometimes to pick up the motorcycles."
Morrison says he realized early on that Stuckey had good contacts in the industry, so there was great potential in sales growth. What Stuckey wanted to avoid was having to build or hire an import department to do the needed coordination, especially while in start-up phase.
It was obvious that opening a physical warehouse on both coasts would be prohibitively costly. The virtual warehouse plan, which Stuckey devised for the most part, has solved that issue. With it, quite a few models can be spread across the country to 60-plus dealers, Morrison says.
Airgroup, the American distributor and the factory in Spain work together on coordinating containers, which are brought into the GasGas Offroad US facility at Peachtree City, Ga., where they are then forwarded on to individual dealers. From Georgia, two-day delivery is possible anywhere from the East Coast to the Rocky Mountains, Stuckey says; three days for beyond that.
A Minnesota-based supplier distributes parts for the bikes, and the 40-foot high cube has an important role to play in that. Traditionally, parts had been airfreighted into the United States, Morrison says, but moving to high cubes ended the need for that. "When you load the motorcycles, they don't cube out," Morrison says. "The top two and half to three feet is empty, so replacement parts are loaded there, and in essence they move for free." From Peachtree City, the parts move LTL to Minnesota.
Doing what it can to ensure the parts supplier is successful is in the interest of GasGas Offroad US, says Morrison. The distributor is confident that sales will take off now that operations are entering year two. If the number of units imported were to skyrocket, the parts supplier may not be able to keep up sufficiently to feed the network. "It's sort of the chicken and the egg: which comes first? Well, they both have to be maintained."
The same is true for partnerships. You're each in it to gain, so you work to help the other make money. Year two of Airgroup-GasGas Offroad US should be promising.
GasGas Offroad US
Enjoy curated articles directly to your inbox.