NNDA: Logistics an economic driver for Northern Nevada
August 15, 2018
CARSON CITY, Nev. — The logistics industry is an interconnected network of trucks, trains, barges and planes that delivers 54 tons of goods for each person in the U.S., on average annually.
It is part of supply chain management, and includes warehousing and distribution, air cargo, assembly manufacturing, food processing operations, and freight transportation (ground and rail). Logistics ensures that goods, services and related information are effectively and efficiently moved from production to the consumer. Today, all industries rely on logistics.
Spurred by the growth of online shopping and demand for last-mile logistics, the ongoing need for warehousing and storage remains strong. The increasing demand for warehouse space that is in close proximity to residential neighborhoods and business communities is driving the industry, as the growth and impact of e-commerce is reaching well beyond brick and mortar stores.
E-commerce retailers typically require, on average, up to three times more space than traditional warehouse users. These businesses have a larger and broader mix of products, along with the need to have them immediately accessible for customer order fulfillment and delivery.
Warehouse and distribution rents have been rising over the past 7 years, as vacancy rates have dipped. The average asking rental rate for warehousing and storage facilities currently is averaging $6.27 per square foot, with projected rent growth of 10.5 percent annually.
Warehousing is closely tied with freight transportation, both trucking and rail. Nevada's rail network, spanning nearly 1,200 miles, and the state's more than 150 freight carriers offer cost-effective logistics for businesses. The proximity to West Coast markets reduces shipping and storage costs.
Recommended Stories For You
Combined with easy access to interstate arterial highways, this allows trucking and logistics to reach nearly 60 million customers within a one-day truck transit. More than 50 freight carriers and 65 trucking companies serve Northern Nevada offering transcontinental, fast-freight and van-line shipping to major markets and U.S. deep-water seaports serving the Pacific Rim.
There is general agreement that trains are the most efficient and environmentally-friendly way of transporting freight long distances over land, moving a ton of cargo about 473 miles on a single gallon of fuel.
However, says Paul Enos, CEO of Nevada Trucking Association: "Ultimately, most everything we have has to come on a truck."
Nationwide, 70 percent of goods arrive by truck. In Nevada, 92 percent of goods are transported that way.
"Trucks drive the economy," adds Enos. "We are the glue that keeps everything together."
The trucking industry is essential to both the logistics industry and the U.S. economy. Freight carried by other transportation modes often relies on trucking to provide access to air cargo, railroads and seaport terminals. The flexibility of the trucking industry facilitates service to nearly every freight transport market. Without trucks, the American economy would come to a standstill.
Each year, trucking companies transport billions of tons of raw materials, works in process, and finished goods. FreightWaves, an online forum focused on the freight market, reports, "The U.S. trucking freight market is 30 percent bigger than U.S. oil, coal, and natural gas production combined."
For 2015, U.S. DOT Federal Motor Carrier Safety Administration (FMCSA) reported 7.4 million people were employed nationwide in jobs that related to trucking activity, representing 6 percent of the U.S. working population. Currently, freight tonnage is at record levels, resulting in part from the growth of e-commerce, and projected to increase about 1.4 percent annually between now and 2045. The trucking industry is already experiencing a shortage of qualified truck drivers, leading to rising wages and better benefits.
There is also a shortage of truck stops, as the number of trucking trips increases while new federal and state requirements limit driving times and mandate more frequent breaks. These conditions have created the need for more truck stops, especially those located on or near a busy highway, to provide trucks and cars with refueling, rest and parking areas, restaurants and ready-made food, and other services.
Reno-Sparks and the Sierra Region (Carson City, Douglas County, Lyon County and Storey County) are both bisected by key rail and interstate highways, and served by one of the nation's most reliable air cargo centers, the Reno-Tahoe International Airport. This has led to Reno being a nationally recognized logistics hub that serves Northern Nevada and the western U.S. In addition, Reno has the largest concentration of distribution-related property per capita in America.
Logistics is important to the economy of the Silver State, and the industry is included as a key focus area in Nevada's statewide economic development and diversification plan. Having a strategically interconnected freight transportation network contributes to state economic growth as it expands interstate commerce.
For Northern Nevada, logistics has become an economic engine connecting miners, ranchers and manufacturers to U.S. and global markets. O
Lynn O'Mara is Director of Communications for the Northern Nevada Development Authority (NNDA), the state-designated regional development authority for the Sierra Region of Nevada (Carson City, Douglas County, Lyon County, and Storey County). For more information, visit NNDA.org or contact the NNDA tribal liaison, Valerie Meléndez, RSIC tribal citizen, at firstname.lastname@example.org and 775-624-3962.