Finding time to think, ITS sets its course

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.