The supply chain

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.