LAS VEGAS REVIEW-JOURNAL – March 6, 2015
Two small Nevada cities have made the list of top 25 U.S locations for new distribution warehouse operations in a report to be presented Thursday in Las Vegas.
The cities are Mesquite in Clark County and Fernley in Northern Nevada.
The report, compiled by the Boyd Company, Inc. “major geographically variable factors” key to the corporate site selection process. Those elements include labor, real estate, construction, taxes, utilities and shipping.
Most of the 25 cities are within a three- to four-hour truck drive of both rail and major deep-water container ports and all are on major interstate highways.
The report notes that while Mesquite, a city of about 16,000 in rural Clark County, is not port-oriented, it has other attributes.
“As the Las Vegas real estate market continues its recovery, alternate sites in the close-in region like Mesquite will be viewed as attractive, cost-effective alternatives given more affordable land costs, lower operating cost structures and access to key intermodal terminals within a couple hour’s drive,” the report notes. “Lower trucking costs owing to empty backhaul rates associated with Southern Nevada — a consuming not a producing region — also show well for Mesquite.”
Nor is Fernley, a Lyon County city of almost 20,000, close to major ports. Its nearest major port is Oakland, though it, too, has other advantages.
“As the Reno market begins to heat up, fueled in part by the mammoth Tesla project, alternate industrial sites in the close-in region like Fernley will be viewed as attractive, cost-effective alternatives,” the report says. “Nevada’s tax climate, including absence of an inventory tax, and close-in access to the rich Northern California market further distinguish Fernley as a top distribution warehousing location.”
The report notes the significance of warehouse operations, saying that more than 25 million containers and trailers are being moved annually using intermodal transportation, the fastest growing mode of shipment. Food, electronics, paper products, clothes, appliances, textiles and auto parts are increasingly turning to intermodal rail networks, the report also says.
Sustainability and green goals are cited in the report as proximity to an intermodal rail terminal helps cut a shipper’s carbon footprint by incorporating more green-friendly rail and less truck into the supply chain. Compared to over-the-road shipping, rail moves one ton of freight an average of 405 miles on a single gallon of gasoline. The report calls this equivalent of an SUV getting 250 mpg.
International container shipments are likewise projected to rise dramatically at all ports in coming years, fueled by a recovering global economy, new U.S. foreign trade agreements and growing U.S. exports, especially to China and Southeast Asia’s growing middle class, the report says.
Cities such as Mesquite and Fernley are considered “well-positioned” to capitalize on these trends. Besides the two Nevada cities, others on the list of 25 include Kingman, Ariz.; Victorville, Calif.; Idaho Falls, Idaho; Kent, Wash.; and Springfield, Ore.
John Boyd, a principal in the firm, is scheduled to present the report in Las Vegas to logistics planners from California and the West.
Founded in 1975, The Boyd Co. provides independent location counsel to leading U.S. and overseas corporations. Clients include JP Morgan Chase, Pratt & Whitney, Time Inc., PepsiCo and other Fortune 500 companies.