To
All Department Heads & Regional Managers
From
Marcus Bell, Chief Operating Officer
Re
Q3 Network Consolidation — Closing the Reno Distribution Center
Decision
Effective <strong>September 30</strong>, we are closing the Reno distribution center and consolidating its volume into Sacramento and Salt Lake. This decision is final. It removes roughly <strong>$2.1M</strong> 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
- <strong>Reno inbound stops Aug 15.</strong> No new receipts after that date; the floor draws down through September.
- <strong>Volume splits 60/40</strong> — Northern California and the coast move to Sacramento; the Mountain lanes move to Salt Lake.
- <strong>People first.</strong> 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.
- <strong>Customers</strong> 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