It may turn out that the best decision the
founders of ITS Logistics made was to take
a step away from the business.
Now in its third year, the Sparks-based
logistics company has been growing like
mad it projects $8 million in revenues
next year compared with $5 million this
year and the company's founders had
their hands full with the daily operations of
the trucking and warehouse operation.
But the three founders - Jeff Lynch,
Dan Allen and Darryl Bader decided
not long after the company's first anniversary
that they needed some time to think
through the strategic direction of ITS
Logistics.
And the only way to do that was to hire
good managers to oversee day-to-day operations
no small investment for a company
still in its infancy.
The upshot?
The founders have had the time to create
plans that range from the expected
geographic expansion, maybe an acquisition
or two to some that are far outside the
box of conventional thinking.
Maybe, for instance, ITS Logistics could
get deeper financial and management consultant
services. That's not as far-fetched as
it sounds. The company, after all, already
does a good business providing transportation
consulting services and freight-bill
auditing to shippers.
Whatever directions ITS Logisitics'
leaders take, they'll be keeping an eagle-eye
on the bottom line. No growth for growth's
sake here.
The company was profitable its first day
in business, Bader said a few days ago, and
the company's continued profitability results
in large measure from its ability to walk way
from money-losing propositions.
"We've turned down a lot more work
than we've ever brought on board," Bader
said. "We do the analysis upfront."
Say a customer wants ITS Logistics to
handle all of its trucking. Before the company
takes on the job, it will grind every
number, no matter how small. How many
flat tires might trucks encounter in a year?
If the customer wants his own logo on the
trucks, what's the cost? And most important,
what will the trucks haul on the return
trip?
The company's trucks it runs a fleet
of 15, along with 40 trailers don't sit still
often.
Truckers make an overnight run to the
Bay area, for instance, and return just in
time for another driver to slide behind the
wheel to handle local jobs such as transporting
trailers from a railroad freight yard.
"They're constantly running," said
Lynch. The company's trucks average about
18,000 miles a month.
The same sort of tight cost control is
evident in the warehousing operation.
There, ITS Logistics handles warehousing
and shipping for customers ranging
from a motivational expert who relies on
the company's service to ship books and
tapes to a power-tool wholesaler whose pallets
fill a large corner of the company's
90,000-square-foot warehouse. (It also
occupies 20,000 square feet of another
warehouse in the area.)
That's not a simple business.
The goal, of course, is to keep the warehouse
full. But some of the customers
typically, ITS Logistics has 30 or so in the
warehouse need small spaces while others
will sprawl across many square feet.
Some material can be racked; others must
be stacked on the floor. Some customers
will use the warehouse for 30 days; others
will sign multi-year contracts.
Both on the warehousing and trucking
side, logistics management is a low-margin,
price-sensitive business. ITS Logistics
thrives as the company builds a web of relationships
with its customers.
ITS might start, maybe, handling warehousing
and distribution for the customer,
and widening the relationship to include
trucking or analysis of freight bills.
So where does ITS go next?
"We definitely see some aggressive
growth," said Bader.
While the company prides itself on its
regional expertise and prides itself on its
commitment to look first to Nevada companies
as business partners ITS executives
say they're looking carefully at expansions
or acquisition that could broaden the
company's geographic reach.
That's no small matter, because the
regional expertise of ITS founders is deeprooted.
Bader and Lynch met as kids, climbing
trees together after catechism classes in
Reno. After attending the University of
Nevada-Reno, each went to work in the
logistics industry, but they kept in touch
and developed dreams of their own company.
After an eight-hour breakfast meeting
one Saturday in the late 1990s, they decided
to make the leap. Recognizing that they
were weak in finance, they approached
Allen a friend from UNR days.
Today, Allen oversees the growing financial
services side of the business while Bader
runs the warehouse and Lynch oversees
trucking operations.
