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ITS Logistics catches breath, readies major growth spurt

John Seelmeyer

After one year after another in which revenues routinely doubled, the management team of ITS Logistics deliberately throttled back the pace during 2006 to a mere 35 percent growth.

But the Sparks-based trucking and logistics firm is ready to put the pedal to the metal in a big way during 2007, growing both through acquisitions as well as through the development of new markets.

“For the past couple of years, we’ve been investing heavily,” says Jeff Lynch, who joined with Darryl Bader and Dan Allen to found ITS seven years ago. “We’ve been building the infrastructure for some serious growth.”

The company’s employment stands at about 150 now, more than double the number two years ago.

Some of the investments the company has made to support a growth spurt have been relatively mundane. It spent $70,000, for instance, on load bars that allow double-decker stacking of some trailer loads.

When trailers are filled higher, fewer trips are required a simple formula that provided seven-figure savings for one big ITS client.

The company also has poured about $500,000 into technology upgrades that include the ability to track pallets with radio-frequency identification systems that some big retailers such as Wal-Mart are installing.

And in the company’s warehouse, the upgraded technology now allows customers to have real-time data about their inventory. Scanners mounted on forklifts provide information when merchandise is received, put away and picked to fill an order.

The 180,000-square-foot warehouse that the company occupied two years ago more than doubled the 80,000 square feet of space where it was launched.

As successful as the company has been from its northern Nevada base, Lynch, Bader and Allen think the ITS Logistics business model may make even more sense in West Coast ports such as Long Beach or Seattle as well as inother big cities.

From the start, the owners of ITS Logistics viewed the firm as more than a trucking company “We’re not going to be a carrier that just picks up a load and goes,” says Lynch and instead have positioned the company as a full-service logistics outfit.

That includes a third-party logistics unit that’s working from the ITS distribution center at Sparks, handling warehousing and shipping for clients around the country.

It includes transportation management services, in which ITS handles everything from negotiations with carriers to auditing clients’ freight bills for payment.

For a growing number of big customers, meanwhile, ITS provides dedicated services running a fleet of 60 shining new trucks across the West.

The company’s pitch to manufacturers and distributors: It’s less hassle, and often less expensive, to use a single dedicated carrier than shop around every day for a carrier to handle loads.

And the company points to its on-time record 99.83 percent for both pickups and deliveries as it’s built one of the largest fleets based in northern Nevada.

The business model a fully integrated logistics provider is likely to do well in port cities and other metro areas that combine a big flow of ocean-going shipments, both inbound and outbound, with the freight needs of manufacturers.

The logistics business in northern Nevada, by comparison, is heavily oriented toward distribution companies with far fewer shipments generated by manufacturers, Lynch says.

As ITS looks to gain a foothold in bigger markets, the company’s first choice is acquisition of an existing freight company that can bring a book of business. ITS then can leverage that business into a full line of logistics services.

The fruits of the company’s big growth push should be fully evident by the end of 2008, Lynch says.



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