For most of us, rising fuel prices have us wanting to pull our hair out -- or at minimum shake a disdainful fist at that passing Chevron station for having the audacity to price their regular unleaded gas more than $4 per gallon. No matter where you look, fuel prices are on the rise, and the transportation sector is feeling the effects.
Airline company AMR
After hearing all that, it might appear that the transportation sector is the worst possible place you could put your money with oil prices rising -- but you'd be wrong. The one key component to the transport sector that appears to be the absolute best play on rising fuel costs is railroad companies.
Railroad companies use far less fuel than a standard diesel truck, and technological advances have allowed them to become significantly more fuel efficient than they were even a decade ago. They have also invested heavily into their own infrastructure to make those cost savings extend even further. Total carloads increased 7.3% in 2010, and through the first two months of 2011, they're showing a more than 5.1% increase. These levels are nowhere near where they were in 2008, but that only means there's still plenty of opportunity for growth.
Keep on railin'
For investors looking for a higher-risk growth play, they may want to take a closer look at Genesee & Wyoming
Finally, don't neglect the outlying companies that make railroad transportation possible. American Railcar Industries
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Fool contributor Sean Williams does not own shares of any companies mentioned in this article. He would like to remind you not to forget about our friends in Japan who could use a helping hand. You can follow him on CAPS under the screen name TMFUltraLong. Genesee & Wyoming is a Motley Fool Hidden Gems selection. FedEx is a Motley Fool Stock Advisor choice. The Fool owns shares of FedEx and United Parcel Service. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy that looks both ways before crossing the track.
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