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Use the new Buffalo Billion to establish a Center for Transportation Technology

Author: R. Reade

If Buffalo really wishes to break in to the big leagues of technology, it must to more than just fund new medical technologies — it must invest in game changing technologies and become a world leader. With the advent of another round of Buffalo Billions, it is time to create a Center for Transportation Technology, and at its core, invest in developing something no one else is really focusing on. In my mind, that is high speed cargo trains.

We all understand high speed passenger trains, but the major problem is that construction will run into the billions, and you can’t charge enough to cover the costs of building and maintainance. These trains will always require subsidies. However, there is big money to be made in shipping freight, as FedEx, DHL and other services can attest. If we instead build high speed cargo trains first, passenger service can follow.

Are high speed cargo trains even possible? Actually, they already exist. China built a 10,000 kilometer train line from Zhengzhou to Hamburg, Germany. Trains complete the 15 day journey, and China is looking to invest billions to revive the Silk Road trading routes of the past. In France, the TGV La Poste runs up to 168 mph, but just delivers mail (although service was suspended in 2015), and Le Shuttle runs in the Eurotunnel carrying cars at 160 mph. Sweden has freight trains that go as high as 100 mph carrying mail and light freight. 

The Cargo Rail Express iis being planned to run from Lyon to Paris and on to London and will have a cargo capacity of 120 ton of parcels, equivalent to seven Boeing 737 aircraft. Future plans are to link Spain, Italy and Berlin.

What can be best transported? Obviously, the heavier the cargo, the more costly it will be, due to extra electricity and other factors. Safety is another issue. But so far, a range of light high-value time-sensitive goods are the cheapest and easiest to move:

  • mail and packages
  • pallets of high-tech manufacturing parts
  • critical spare parts for machinery
  • food of all sorts, including greens, vegetables, fruit, meat, poultry and fish (in suitable

    auto-refrigeration units)

  • eggs, packaged dairy and farm-fresh produce (well insulated)
  • fresh cut flowers
  • general air cargo in standard unit load devices (ULD)

Since many airports do not allow night time deliveries, high speed cargo trains can make deliveries when roads are less crowded at night. There are numerous environmental benefits, as trains of all sorts have a significantly lower carbon footprint than any other mode of transportation.

Needless to say, there remain many technical challenges. The California High Speed Rail Blog lists several of them, including the rail-wheel noise when passing through populated areas, safety issues, the time it takes to load and unload trains at either end, reducing the wear and tear on the wheels, and so on. Freight trains are always heavier and that produces its own problems with starting, stopping and the infrastructure supporting it.

As far as I know, there is no real center that is developing and promoting high speed freight train technology anywhere. The industry leaders, Siemens in Germany and Alstom in France, of course have their own research divisions, and China is out front in this, but we need to find and invest in our own technologies that will go further.

This is where the next Buffalo Billion can make an investment. Let’s go beyond trains and establish a Center for Transportation Technology. There is a critical global need for better technology, whether it is for cars, trucks, busses, mass transit, seagoing vessels, roads, trains or airplanes, and we need to make them all safer, more energy efficient, faster, and cheaper. A concerted effort is needed to focus our energies on a few of these and then spin them off as profit making companies.

Buffalo is in a good position to host such a center as we already have easy access to roads, waterways and airports in which to test the technology. The cost to establish such a center would be seed money of about 20 million dollars to keep it funded for about three years. After that, it should be expected to be self funding.

How can it self fund? Very simply, the Center will take an equity stake in every company, about 5% or 6%. As the spin out companies grow, they will eventually get bought, acquired or go IPO, and the Center reaps the benefits from that. It will only take a few company exits to provide the needed revenue per year.

And that would be the way to finance this. You want people who will push profitable avenues of research and not just continually rely upon the state for annual funding. The caveat is that you will need people who really know what they are doing — investors and business people who know the global markets and how to get companies. Assuredly, those people are not currently in Buffalo, and if the usual politically well connected are selected, it will be an utter failure. The only people who can be in charge of this are those with a demonstrated track record of successfully launching, operating or investing in transportation technologies.

Additionally, the state should establish a small fund of about $10 to 20 Million. This fund would be the seed money for the emerging companies for their company building costs. The fund would also take an equity stake in the companies, becoming an “evergreen” fund whereby a portion profits of any member companies would accrue to the fund to support new spin outs. Then the Center would be tasked with finding investors from around the US and the world to complete funding for the companies.

The benefits to Buffalo would be far reaching. Such a Center would attract the best and brightest of researchers and entrepreneurs from around the world knowing that they get the support that they need. The companies being spun out will likely remain in Buffalo, and with enough companies, investors will establish a presence. In other words, we would be creating our own unique innovation ecosystem that will serve as a global magnet for the best researchers, entrepreneurs and investors in transportation technology.

Imagine high speed cargo trains running between New York, Toronto and Chicago. Buffalo would be at the center. We could grow enormous amounts of organic produce in our grain elevators and ship them over night to restaurants in those cities. The large jumbo jet planes that cannot land in heavily populated areas can land at that Niagara Falls airport, unload the cargo and be in Chicago by the end of the day, or Toronto within few hours.

It would also make passenger service feasible. The greatest cost of building any railway system is the land acquisition. With land already acquired for the high speed freight trains, that cost is eliminated for passenger trains. Maintenance and operating costs can be shared. Such a project will attract investors, because money can be made on shipping. If structured properly, the freight service can subsidize passenger service to make it affordable without heavy tax payer subsidies.

Our goal for the Center would be create real game changing technologies, with an emphasis on high speed cargo trains. Just that one technology alone will require a continuous stream of companies for several decades to meet its ever increasing demands. From there, we can find ways to make high speed cargo trains a reality, and eventually passenger trains.

I would propose that this Center be located near the Central Terminal, as it provides easy access to all the forms of transportation, there is an abundance of cheap land for the Center and for the spin out companies, and it will help revitalize the community. Within five years, this Buffalo will be world renowned and will able to host seminars and conventions on the latest in transportation technologies.

Lead image: Sputnik News

Written by BRo Guest Authors

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