The challenges, opportunities in logistics

There's no question the logistics industry plays an important role in the Greater Reno-Tahoe economy. Logistics is a science and skill unto itself and is defined as the management of the flow of goods, information and other resources, including energy and people, between the point of origin and the point of consumption. It requires intelligence, technology, education, experience and infrastructure. It has become a major direct employer of working Nevadans, as well as supporting critical industries in our region, including warehousing, distribution, transportation and manufacturing. Logistics is also an indirect employer of support industries including construction, design, and other ancillary industries. In short, logistics as an industry has contributed much to our region.

Greater Reno-Tahoe got a remarkable start as a leading logistics center when Edwin Bender and the Reno Chamber of Commerce lobbied the State Legislature for the passage of a freeport law in 1949. The law enabled goods manufactured in the eastern United States to be stored, staged, and distributed tax-free from Nevada to California consumers. The area quickly rose to prominence as a leading distribution point for products manufactured in the Midwest and East Coast for distribution to a growing consumer base in the West.

Our region is served by two major interstate highways feeding populations in all directions. Generally speaking, all points west of Denver can be reached by truck service within two days from Reno/Sparks. We are positioned on the central rail corridor, serviced by the Union Pacific and the Burlington Northern Santa Fe. We are also served by more than 70 trucking companies, supported by hub operations for both Federal Express and UPS, and have significant land designated as Foreign Trade Zone, meaning commercial merchandise receives the same Customs treatment it would if it were outside the commerce of the United States. Merchandise may be held in the zone without being subject to customs duties and other ad valorem taxes. Reno is an international port with local customs to support the import of foreign goods. Reno-Tahoe International Airport currently offers more than 20 cargo flights per day. The region is also supported by trucking companies that efficiently feed cargo to and from the major airports of San Francisco and Los Angeles.

Over the past 10 to 15 years, the logistics industry has advanced to offer sophisticated services. However, as logistics capabilities have continued to improve locally, they have also done so globally. This means competition for Greater Reno-Tahoe as a recognized leader in the industry. As the world flattens, the risks for our region will increase ... but so will the opportunities.

The risks? The shift of U.S. manufacturing to offshore locations begins to position markets like southern California as a close rival to Greater Reno-Tahoe as a distribution location. While there are many independent factors that are considered by companies with widely varying needs, the cost of distributing product from our area may not always be the lowest cost option. Our low cost tax structure, productive labor, and relatively inexpensive land has kept us as a primary choice.

The growing sophistication and technological advancement of logistics have resulted in some companies centralizing logistics decision-making in their headquarters operations, which are not often located here. Decision-makers do not always recognize the value and sophistication of local services in Reno/Sparks. We need to build a clear and compelling economic case outlining our advantages relative to other markets.

The opportunities: Even though shifting manufacturing of basic industrial and consumer products to offshore origins makes us less attractive from a pure distribution standpoint, we can look at manufacturing associated with higher technology and emerging energy as an opportunity. Our inherent advantages provide a great foundation. A tax-friendly business climate, available labor, educational resources, industrial infrastructure, and geographical benefits combine to make Greater Reno-Tahoe an excellent option. We must continue to shift our thinking and vision to include not only traditional warehousing and distribution, but also mixed manufacturing and distribution operations that can be supported by our strong foundation and infrastructure.

The Reno-Tahoe International Airport is actively working to develop its already significant capabilities to further support our region. Plans are in the works to attract more international carriers into this market in support of both cargo and passenger flows. Additionally, the expansion of cargo facilities is on the drawing board. In this world of shrinking air service and cargo service, Reno-Tahoe has had continued success in each.

The UP and BNSF railroads are working with local businesses and providers to improve rail service with the addition of new stack train services. The University of Nevada and the Desert Research Institute are actively engaged in impressive research and development projects on a national and global scale.

Truckee Meadows Community College and Nevadaworks are actively engaged with industry and the region as a whole, to support workforce education and development.

The local chapter of Supply Chain Management Professionals has re-established itself with a bang. This group is taking the lead on supply-hain topics of interest that includes the recent "Northern Nevada Logistics Forum" among others.

The Economic Development Authority of Western Nevada is reaching out to other community organizations to build stronger relationships to support existing businesses and industry, as well as to create and leverage new opportunities in the fields of advanced manufacturing, logistics, and emerging energy. I believe these targets represent an incredibly positive direction for our region.

How can you help? Get involved and support a focused, energized and cohesive approach to supporting the industries that have made our region strong. A tremendous amount of experience and knowledge exists in this community. However, though our individual efforts are well intended, they are often fragmented and incomplete. This is unfortunately all too visible to companies looking at our market as a prospective new home. Only together can we be an all-star team assuring the future economic success of our region. If we work on a fragmented basis, only a few will win in the short term, but most will lose. Ultimately, the community will lose.

Interested in getting involved? Consider joining the professional chapter of CSCMP. If you are interested in our economic development efforts, contact EDAWN at 829-3700, or visit for more on what's being done to support, recruit and expand logistics, advanced manufacturing, and clean energy companies- all priority target industries.

Russ Romine is president and CEO of Griffin Global Logistics, an international supply chain and logistics management company with headquarters in Reno, Nevada. He is also the 2010-11 chairman of the board of directors of EDAWN.