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Will new long-haul trucking regulations impact economic development?

by Tony Kurdziel, Business Development Manager

The staffing shortage for long-haul truckers has been well documented since the mid-2000s. Combine this with a sputtering national economy, unpredictable fuel costs and a constantly evolving regulatory environment, and it has added up to trying times for the trucking industry. An important new regulatory deadline from the Federal Motor Carrier Safety Administration is fast approaching and will most certainly force additional change in this industry.

Effective July 1, 2013, the maximum amount of time that a commercial motor vehicle driver can work in one week will go from 82 hours to 70 hours. It will also prohibit truck drivers from driving more than eight hours without taking a  break of at least thirty minutes. These two major changes, along with other provisions of this law, are intended to reduce driver fatigue and make the roads safer.

What economic development ramifications (if any), will develop from these changes? When added to the current strains on the trucking industry, will companies be forced to shift their supply chains? For example, will manufacturers look to concentrate vendors and suppliers even closer to production points? Will distribution centers move closer to their end markets? And finally, will this cause more consolidation in the trucking industry, placing more traffic on capacity-constrained rail lines? If so, how will the rail industry be able to absorb the different shippers that approach them?

The next few years should be quite interesting for the commercial transportation business, especially if the global economy recovers in a meaningful way.

The Best Holiday Gift May Be a Local Experience

Tony Kurdziel, Business Development Manager, Buffalo Niagara Enterprise

Given the festive season and my colleague Matthew Hubacher’s recent blog on New York’s wine and spirits industry (http://blog.buffaloniagara.org/2012/12/18/new-york-states-agricultural-economy/), I thought it was a good time to directly feature some local, last-minute gift or day trip ideas.

For the beer aficionado in your family we are lucky to have many local and regional options. Ready?

Located right in the Black Rock neighborhood of Buffalo is Flying Bison Brewing Company (http://www.flyingbisonbrewing.com/) which is a division of Matt Brewing (www.saranac.com), the venerable Utica, NY,  company that manufactures the Utica Club and Saranac brands. The Black Rock neighborhood also boasts “nanobrewery” Community Beer Works (http://www.communitybeerworks.com/). Down in Chautauqua and Cattaraugus counties, respectively, there is Southern Tier Brewing Company (https://www.stbcbeer.com/) and Ellicottville Brewing Company (http://www.ellicottvillebrewing.com/. Finally, our neighbors in Monroe County have the iconic Genesee Brewing Company http://www.geneseebeer.com/, which is owned by Buffalo-based North American Breweries (http://www.nabreweries.com/), the U.S. distributor for all Labatt brands (http://www.labattblueus.com/) Last but far from least is Ithaca Beer Company (http://ithacabeer.com/) just a quick three hours down I-86 in Ithaca. Go figure?

It is worth noting that almost all of these companies offer brewery tours, tastings and/or dine-in options. I highly recommend you take a look at their websites for these activities, and to peruse their different product offerings. Of course, we also have many local pubs that brew their own beer, but do not distribute to stores.

Impressed by the local brewers? The list of local wine makers is even longer. Because the list is so long, I will merely provide links to the four major wine regions, all within one hour drive (or less) of Buffalo Niagara:

Another great way to enjoy all the food and drink New York has to offer is just to visit the New York Wine and Culinary Center in nearby Canandaigua, NY: http://nywcc.com/

As always, be sure to enjoy these local products responsibly! Happy holidays!

New Program at Peace Bridge Could Be Big Moment for Buffalo Niagara

by Tony Kurdziel, Business Development Manager

The Peace Bridge is one of North America’s busiest portals.

Western New Yorkers tend to treat any news related to the Peace Bridge with a healthy dose of skepticism. After all, plans to improve the border crossing have been in some form of study or delay since the late 1990s. However, the news that broke on October 9, 2012, could truly represent a positive turning point for the future of the Peace Bridge crossing.

On that date it was revealed that a pilot program for pre-screening freight will begin in January 2013. Trucks entering the United States from Canada will be inspected by U.S. Customs on the Canadian side of the border, and those that pass inspection can then traverse into Buffalo. The hope is that this will alleviate the backlog of trucks that currently idle on the Peace Bridge until they can be inspected on the cramped Buffalo side of the bridge. If this occurs, it should theoretically encourage more tourists and commercial trucks to use the crossing, thus generating more cross-border commerce. Concurrently, the Peace Bridge Authority is trying to increase the use of the Nexus program, further reducing the amount of vehicles waiting traditional inspection.

This pilot program is only chartered for 18 months. During that time, it must be proven that the program increases traffic flow between Fort Erie and Buffalo. If not, it is cancelled and truck inspections revert back to the current procedures. If it is proven to be effective, then the Canadian and U.S. Governments will have to strike a more permanent agreement on the staffing of foreign customs agents on their respective borders.

Obviously, there are many intriguing questions that will be answered during the evaluation period. Will truck movements be more efficient? If so, will trucks that cross in say, Windsor, Ontario, shift some routes to Fort Erie? Will the average tourist notice the improved traffic flow? If so, will they make more shopping or site seeing trips via the Peace Bridge? Given the last fifteen years of conjecture about the Peace Bridge, hopefully a lot of facts will be found and progress achieved during this 18 month program.

Source for most details of program: http://www.wivb.com/dpp/news/local/peace-bridge-pilot-program-to-come

What if New York State lifts the moratorium on hydraulic fracturing?

On November 15 – 17, 2011, I will be representing the BNE at the Dug East Conference (www.dugeast.com) in Pittsburgh, PA. Mainly, I will be there to learn about development opportunities that western New York could see when/if the state lifts the moratorium on hydraulic fracturing. Of course, I will also be trying to network with the other 2,700 attendees, in the hope it will lead to new business opportunities for our region.

Intuitively, natural gas drillers and distributors are going to strategically locate their operations where the gas is most heavily concentrated. In New York, that appears to be in the central southern tier counties of Steuben, Chemung and Tioga Counties. Therefore, we are more focused on the “spin off” industries that are less beholden to the geography and geology of a region. Primary among these is the transportation business, specifically bulk carriers like pipelines and railroads. Just last week, our region received the good news that Norfolk Southern Railroad is hiring to support local operations (http://www.bizjournals.com/buffalo/news/2011/11/03/norfolk-southern-hiring-in-buffalo.html).

Obviously, we have no way of knowing whether these jobs are due to the Marcellus Shale activity in northern Pennsylvania. However, I have heard anecdotal accounts that railroads serving northern Pennsylvania are approaching or at full capacity. By cultivating relationships with the pipeline and railroad operators, BNE can become a resource for these companies whenever the day comes that they are vying for shale-related business in the Southern Tier. At the very least, we might be able to facilitate new commerce and refer these companies to existing local service providers (think engineering firms, legal professionals, accountants, real estate service providers). In a perfect scenario, we will be able to “stay in front” of our competitors if a large-shale related construction project is proposed for New York. One never knows where a contact made at a conference like Dug East might lead to, especially as the natural gas industry is eagerly assessing opportunities in our state.

Tony Kurdziel,Business Development Manager

“Near Shoring”, a Growing Trend?

Earlier this year, as fuel costs surged and the global economy slowly gained momentum, use of the term “near shoring”  increased. The term is frequently found  in trade publications dedicated to manufacturing and transportation of finished goods. For the uninitiated, “near shoring” refers to the movement of manufacturing facilities back to the United States, or at least to nearby markets like Mexico. The primary drivers of this movement are quite transparent:  a weaker U.S. dollar coupled with higher ocean shipping costs and rising wages in Asian manufacturing markets (especially China) have made domestic manufacturing more competitive. Add in unpredictable supply chain disruptors like natural disaster (Japanese earthquake/tsunami crisis) and rapid societal change (government protests in Middle East) and one can understand why “near shoring” was a hot topic in early 2011.

If “near shoring” becomes a trend in the coming decades (and the jury is obviously still out) it is easy to be optimistic about Buffalo Niagara’s prospects for success. Our local intellectual capital and legacy of manufacturing ingenuity are well documented  and should only continue to grow.   Not to mention, the Buffalo Niagara MSA is seventh lowest in the U.S. in average private sector manufacturing wages ($55,647), plus we have a multi-modal industrial transportation system with capacity to stare. Add to this the potential to access the original low-cost, green energy source (hydropower via New York Power Authority) and it is difficult to imagine how a manufacturer couldn’t take a look here.

Perhaps coincidentally,  BNE is currently working with two companies that are considering locating near-shoring operations in Buffalo Niagara. Only time will tell whether more of these “near shore” facilities are considered for  the region, but one thing is for sure: for the first time in a long time, companies are not automatically assuming that cheaper, distant markets are the best place to manufacture goods that are ultimately consumed in North America.

Tony Kurdziel, Business Development Manager

Marcellus Shale Conference Discusses Potential Economic Advantages

On March 31, 2011, BNE attended a conference hosted by Cornell University in Watkins Glen, NY. The conference was focused on planning for major regional changes that might occur in communities across the state if state government permits the horizontal drilling of Marcellus Shale gas. While this is a very sensitive political topic, the conference (just like BNE’s approach to any economic development opportunity) was entirely apolitical. Rather, it pondered the questions of what is the Marcellus Shale, why is it important to domestic energy production, and if New York permits drilling, how will communities change in terms of employment, aesthetic landscape and ecological diversity?
One thing is certain: the Marcellus Shale has tremendous potential to create new wealth and economic opportunity in upstate New York, especially the Southern Tier. Beyond the land leases and royalty payments to land owners and direct employment from energy and drilling companies, there are a multitude of support industries that can benefit and grow. These include, but are not limited to: trucking companies, railroads, mechanics, machinists, pipe companies, riggers and logging companies.

I have personally seen the indirect economic impact from such efforts. In 2007, while working for the BNSF Railroad, I helped establish a pipe “transload” operation in northern Minnesota where new transmission lines were being built to carry natural gas into the upper Midwest (see photo). The direct employment from this project alone (which is but one component of the natural gas industry) reached several hundred, and numerous small towns in Minnesota reaped the secondary economic benefit. Hotels, restaurants and other service providers were consistently full as work crews progressed the pipeline across the state.
With all of this in mind, the next few months could prove to be pivotal for the future of New York State. The economic benefits of the Marcellus Shale are substantial. As with any energy source and means of production, the main question we all must ponder is whether the environmental trade-offs are worth the economic benefit. I think all of us, as New Yorkers, can sympathize with how complex and important the natural gas permitting decision will be for Governor Cuomo and the Department of Environmental Conservation.   
- Tony Kurdziel
Business Development Manager
Buffalo Niagara Enterprise