To
All Department Heads & Regional Managers
From
Marcus Bell, Chief Operating Officer
Re
Q3 Network Consolidation — Closing the Reno Distribution Center
Decision
Effective September 30, we are closing the Reno distribution center and consolidating its volume into Sacramento and Salt Lake. This decision is final. It removes roughly $2.1M in annual fixed cost, lifts Sacramento to 78% utilization, and adds under a day to West-region transit. Reno's 41 roles will be offered transfers or severance under the plan below. Three actions are owed by the dates listed; read them before this Thursday's ops sync.
1 Why now
Reno has run below 55% utilization for five consecutive quarters while carrying a full fixed-cost base. The lease renews in October at a 19% step-up. Sacramento and Salt Lake both have absorbable slack, and our carrier rates on the redirected lanes came in flat. Holding three half-full Western DCs is no longer defensible against the network we can run with two.
$2.1M
Annual fixed cost removed
78%
Sacramento utilization, post-move
<1 day
Added West-region transit
41
Roles in scope — transfer or severance
2 What changes
- Reno inbound stops Aug 15. No new receipts after that date; the floor draws down through September.
- Volume splits 60/40 — Northern California and the coast move to Sacramento; the Mountain lanes move to Salt Lake.
- People first. Every Reno role gets a documented transfer offer or a severance package before any public notice; nothing is communicated externally until People Ops has met each team.
- Customers on Reno-origin lanes get 30 days' notice and a named transition contact. No service interruption is acceptable.
3 Action items
1
Finalize the transfer-vs-severance roster and meet each Reno team in person
L. Ortega, People Ops
Jul 18
2
Re-slot SKUs and confirm dock/labor capacity at Sacramento and Salt Lake
R. Idris, Network Ops
Aug 1
3
Notify affected customers with transition contacts and updated lane SLAs
S. Park, Account Mgmt
Aug 8
Marcus Bell
Chief Operating Officer · Tidewater Logistics
CC
Executive Team · Finance · Regional GMs