Executives discuss the pros, cons of Southern Nevada as distribution hub


The ability of FedEx drivers to get to surrounding cities relatively quickly is one of the main advantages of the FedEx Ground distribution center in Henderson, says Ken Barnes, FedEx senior manager.

Its proximity to Southern California ports and interstates as well as the low costs of labor and transportation have made the Las Vegas Valley an increasingly popular location for distribution centers, including an Amazon fulfillment center under construction in North Las Vegas.

Henderson has proven particularly inviting to medium-to-large-sized companies, said several executives at a panel hosted by the Henderson Chamber of Commerce at Dragon Ridge Country Club last week.

Speaking about their company's reasoning were Ken Barnes, FedEx senior manager; Michael Manzione, Rakuten Super Logistics president/CEO; Mark Vrabel, Core-Mark division vice president; and Rob Tillman, Levi Strauss & Co.distribution director, U.S. West and Latin America

The Henderson facility is one of three Levi distribution centers in the country. It services regional and national stores and outlets, Tillman said, and is the only hub in the U.S. that ships Levi’s 501 style jeans.

Levi Strauss built the center in the 1970s because of the state’s lower taxes, but other reasons have kept the company here several decades later.

“We’re well positioned here because California continues to make itself non-business-friendly,” Tillman said. “From a transportation standpoint, we’re close to the Inland Empire (California) and the ports in Long Beach and Los Angeles. Four hours of transportation is not much.”

Wholesale and retail clients are served out of the Henderson plant, which houses 400 of the company’s 1,100 distribution employees in the U.S. Those employees benefit from the area’s amenities and its lower cost of living, Tillman said.

Vrabel said that the valley is like no other when it comes to Core-Mark's business, which employs 300 locally to distribute convenience-store products .

“This is the only area that we service where there’s such a concentration of convenience stores within a 40-mile radius,” Vrabel said. “I’m not sure if it’s the tourist industry or the transient nature (of Southern Nevada), but we service over 1,100 stores in that area.”

Arizona pales in comparison, with only about 600 convenience stores spread between Tucson and Flagstaff, with far less volume, Vrabel said.

“The volume that a store does here is 30 percent more than a store in Arizona does,” Vrabel said.

The ability of FedEx drivers to get to surrounding cities relatively quickly is one of the main advantages of working in Henderson, Barnes said.

“We’re able to distribute out of Southern Nevada and hit all the places in Southern California as if we were there,” Barnes said. “We can hit Phoenix the next day, we can hit California the next day … Salt Lake City in two days from right here, and that’s why we’re seeing the growth.”

Vrabel also noted the ease of interstate travel from Henderson, in comparison to other parts of the valley.

“We turn and shuttle down in the Arizona market in the same night,” Vrabel said. “To comply with department of transportation regulations, we wouldn't be able to make that run from North Las Vegas with the traffic and the added miles.”

That drive is set to improve even more once Interstate 11 links Las Vegas to Phoenix.

However, Levi’s Tillman noted some negative factors.

“The type of worker we’re trying to attract is not really in Henderson,” he said. “We also have some troubles with companies who will drop freight off but they’re not leaving. We have a hard time getting some things out of the area sometimes. It’s not like Los Angeles, where there’s a thousand different providers. it’s a smaller pool here.”

Manizone, chief executive officer of Rakuten Super Logistics, an e-commerce company, agreed with Tillman, stating he’s had similar staffing issues.

“People are probably our biggest problem,” Manzione said. “Whether it’s engineers, sales, or warehouse workers, it’s been a difficult task.”

Finding drivers has been FedEx’s largest problem in the area, Barnes said.

“Drivers are always an issue, but drivers have been an issue for the company for the last 10 years or so — although we generally have a good rate of retention,” Barnes said.

Barnes said that FedEx has not seen the staffing problems the other panelists have seen, noting its top-level jobs are not as technical as the other companies represented in the group.

Manzione also said that the internet speeds in the area have had a negative effect on his company, which relies of online interactions.

“The biggest obstacle to us is great access to internet,” he said. “Fiber or higher bandwidth has been a major problem in the Henderson area. It’s something that needs to be improved upon, tremendously for us, because for us it’s all about communication.”