How Reno Created a Distribution Mecca

Posted by Brooke Sullivan on Thursday, November 30th, 2017 at 6:33pm

After going through the toughest recession in its history, Northern Nevada has hit some major economic development victories.

Last year, 156.4 million pounds of cargo came through Reno’s airport the three to four weeks prior to Christmas. This whopping number was an all-time record for the facility. And the airport isn’t the only player in the region to see shipping traffic “take off”.

The improving economy has combined successfully with the increased adoption of e-commerce, which has help fuel an increase in the number of new warehouses and distribution center. Add a growing manufacturing base producing items from cheese to pet food to electric batteries, and Northern Nevada continues its transformation as a distribution mecca. Storage and transportation of goods from the area reach the entire western United States.

If you’ve bought an oversized item from Amazon in the past few years, there’s a good chance that it came from the Amazon Reno facility. The large distribution center specializes in large and bulk goods, once described as a mini-city. What about a book from Barnes and Noble? The Reno warehouse is the company’s only major distribution center in the western U.S. and one of only two in the country in addition to the retailer’s New Jersey facility.

Logistics firm growth in Northern Nevada went from 486 in 2009 to 531 in 2015, a 9% increase according to the Center for Applied Logistics Management at Truckee Meadows Community College. Those facilities stretch from the Reno-Sparks and Carson City region all the way to Humboldt and Elko.

Logistics staffing also saw a significant increase, according to the Nevada Department of Employment, Training and Rehabilitation. The sector, which includes warehousing, trucking, air service and courier operations such as FedEx and UPS, grew by nearly 46% from 10,238 employees in 2009 to 14,908 employees in 2015. Wages paid also saw an increase of nearly 50% from $438 million to $654 million.

What has led to the region’s rise as a player in the logistics space? Location, location, location.

“You can reach 11 western states within one day with ground transportation,” said Mike Kazmierski, president and CEO of the Economic Development Authority of Western Nevada. “This makes us unique and attractive, especially as consumers’ expectations for shorter delivery times continue to accelerate.”

Before Apple and Tesla staked their claims in the greater Reno-Sparks area, warehouse and distribution centers were quietly making their mark. Now, Northern Nevada is reaping those rewards. One logistics sub-category that has especially seen growth is retail. Traditional brick-and-mortar blue blood JC Penney helped lead the charge by opening a distribution center in Reno in 1979. The facility now measures 1.64 million square feet and was the company’s fifth center overall and first in the West.

As the last century came to a close, Northern Nevada welcomed Amazon’s distribution center in 1999, just 30 miles east of Reno and Fernley. It wasn’t long before they moved their distribution to a larger facility in Reno and its arrival has also been followed by other e-commerce operations.

“When I got here six years ago, (the region was) always considered a good place for logistics but it was more the big-box kind like what you see in Bakersfield and the Central Valley of California,” Kazmierski said. “Five years ago, people were willing to wait five days for delivery but more and more people want same-day delivery now.”

A look at the region’s logistics and distribution landscape shows several familiar names as well as some rising upstarts. In addition to Amazon and JC Penney, companies such as Walmart, Zulily, Urban Outfitters, Petco, Barnes & Noble, 1-800-FLOWERS, and Thrive Market also have warehousing operations in the area.

Although companies such as Tesla and Panasonic typically get most of the attention due to the Gigafactory, food — which is the third-largest specialized sector in Washoe County in 2014 — is actually a major player in Northern Nevada’s manufacturing sector. Food manufacturers in the region include established big names such as Starbucks as well as growing companies like Mary’s Gone Crackers.

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