Location, skilled workforce, recovery of consumer spending spur growth of area's logistics sector

Everyone in the logistics industry cites Reno's geographical advantages it's within a one-day truck trip of major West Coast markets but a newcomer cites another advantage as well.

When XPO Logistics of Greenwich, Conn., purchased Turbo Logistics from Ozburn-Hessey Logistics, LLC in October, it said it plans to ramp up the former Turbo operations in the Reno area very quickly.

And a key element to that expansion, the company said, is the availability of a well-trained workforce among graduates of the University of Nevada, Reno.

XPO Logistics known as a "non-asset based" company in the industry doesn't own any trucks. Instead, it works as a broker between truckers and the companies that hire XPO to manage their logistics.

The company notes that non-asset based services have been growing two to three times faster than the rest of the economy as truckers use brokerages to increase utilization and shippers turn to brokers for outsourced expertise.

The warehouses that form the physical heart of northern Nevada's logistics industry will continue to see new entrants, as distribution remains one of the busiest segments for the industrial-recruitment team at the Economic Development Authority of Western Nevada.

Those potential newcomers include traditional distributors that serve as middlemen between manufacturers and retailers as well as distributors that handle orders directly from consumers, says Mike Kazmierski, the president and chief executive officer of EDAWN.

Technology continues to be a major theme throughout the warehousing industry.

New software and equipment continues to improve the efficiency of distribution operations, says Rosalyn Wilson, who took a deep look at the industry's condition in a report commissioned by the national Council of Supply Chain Management Professionals and Penske Logistics.

The region's logistics industry is expected to get a boost early in 2013 with the addition of cargo service between China and Reno-Tahoe International Airport.

Those flights will add further strength to a growing air-cargo sector in the region.

Cargo shipments through the airport during the third quarter were up 5.6 percent from year-earlier figures, and October continued the trend with a 13.5 percent increase in cargo shipments through the airport.

On the ground, meanwhile, staffing issues are likely to be a key concern in 2013 for the trucking industry that links the warehouses of Reno to manufacturers and consumers around the nation.

"Labor is a huge focus for us," says Paul Enos, chief executive officer of the Nevada Trucking Association. "Trucks don't move without a driver."

Multiple challenges face trucking companies in their search for drivers.

The workforce is aging the average age of drivers is somewhere in the mid-50s, most studies agree and a wave of Baby Boomer retirements is beginning to break over the industry.

At the same time, tough new federal safety standards that have been effect a couple of years are taking some drivers off the road.

And in northern Nevada, recruitment of new drivers is all the more difficult because of competition from the mining industry.

"It's hard to keep finding these people," says Enos. "It's not unskilled labor."

While trucking companies have become more adept at implementing surcharges that buffer the effects of higher fuel costs, Reno-area carriers who haul into California continue to battle the costs up to $20,000 per truck of meeting the Golden State's air pollution regulations.

Northern Nevada truckers' ability to pass along higher costs is limited.

"The trucking industry is so competitive, and the margins are so low, that you always worry about someone coming in to undercut you," says Enos.

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What to watch in 2013

The distribution and trucking industry in northern Nevada is likely to rebound somewhat more quickly than the rest of the economy, but shortages of truck drivers could hamper the logistics sector.