Despite the ailing nationwide outlook for
the trillion-dollar logistics industry, Jeff Lynch,
president of ITS Logistics in Sparks, says the
warehousing and transportation industries in
northern Nevada are expected to remain
strong.
"Reno still has a very bright future," Lynch
says "We are strategically located for companies
that need West Coast distribution. Reno is
still an ideal location."
While many major international companies
struggle due to widescale declines in
shipping volume for example, DHL
Worldwide this autumn announced it was suspending
domestic shipping services in the
United States smaller companies still can
thrive in 2009.
Lynch says ITS Logistics, which employs
160 and recently moved into a 125,000-squarefoot
warehouse facility at Tahoe Reno
Industrial Center,will add 40 to 65 positions in
2009. The nine-year-old company currently is
hiring 15 additional workers, including four or
five management positions, to meet the
demands of a growing volume of business.
"A lot of people in the industry are struggling,
but we are a small dynamic regional
company experiencing great growth," Lynch
says."We have such a massive pie to go after
that it's pretty easy to chew off some new business."
Lynch says the company's growth 35
percent in 2008 and a predicted 35 percent in
2009 is being driven by strategic relationships
with large clients.
"There are
some challenges
within the Reno
market, but the
industry as a
whole is healthy,"
Lynch says.
"Companies need
a regional distribution
presence."
Another
northern Nevada logistics provider expecting
to grow this year is Leach Logistics in Sparks.
President Greg Leach started his company
in 1984 with little more than a phone and an
office.
Today the company occupies 600,000
square feet on East Glendale Avenue and
employs more than 50 full-time workers.
By adding two new business units dryheat
and steam sterilization of imported foodgrade
products Leach Logistics predicts
growth of 17 percent in 2009 and 24 percent
for 2010. The company grew by 4 percent in
2008, Leach says.
"It is going to be a good year for us," he
says."We do lot of food-grade items and have
positioned ourselves with several Fortune 400
companies, so we are pretty fortunate."
Leach Logistics has already added four
employees for its new dry-heat sterilization
business and expects to add six more in
February once the steam sterilization equipment
is up and running.
Leach says his
company is uniquely
positioned to garner
market share
because it not only
packages and ships
bulk foods but also
mills and processes
them.
"When we bring products in it gives us
opportunities to package, mill or process it,"
Leach says."Because of the cost of transportation,
having it packaged and shipped direct
opens up lot of opportunities for our packaging
division."
Leach notes that although business
remains strong, average wait times for customers
to pay their bills has increased threefold.
"A year ago receivables averaged 11 days;
today it is 41," he says."But we see it coming
and plan for it."
Lynch of ITS Logistics say a big challenge
facing the industry lies within the transportation
segment. The economic downturn has
adversely affected profit margins and sharply
increased pricing pressure, Lynch says, and as
a result there are now more trucks and drivers
in the market than freight.
Additionally, he says, northern Nevada
faces increasing competition from California
for business with companies that import
goods.
"Outside of the major metro areas,
California is competing a lot harder with us
it is not letting go of those companies as easy,"
he says."But companies that distribute
throughout the West Coast, and are diverse
about how they bring products in, those companies
still make sense to be here.We will
always be attractive to a certain segment of the
industry because of our location."
Mike McCabe, senior vice president of the
industrial properties group for Colliers
International, says northern Nevada might
attract some new third-party logistics
providers in 2009.
"Third-party tends to be a bright, shiny
star,"McCabe says."Reno's fundamentals from
a logistics standpoint are still very positive.
The downturn in fuel costs brought transportation
rates to the forefront, and as companies
look to move inventories closer to market
Reno stands a good chance at attracting new
warehousing and logistics companies.
"Logistics executives don't want to rock the
boat with major network changes, but when a
third-party provider can bring a million-dollar
savings to your operating budget within a
region, it just makes sense,"McCabe adds.
