Fuel prices are rocketing skyward, airlines are in deep trouble - and yet the long forgotten poor cousin - railroad - is offering some of the best investment returns in the marketplace. The railroad industry is in a renaissance and having a boom of its own given that the limited numbers of major providers have carved up the market amongst themselves, leaving little or no room for additional competition - and thus competing only with roadways such as trucks and air cargo transport.

Railroads utilize fuel more efficiently than road or air (per unit of cargo transported), and thus are able to absorb rising costs more easily. Moreover, given the preference that many businesses are giving to railroads, and the relative lack of competition, railroads are able to increase price to pass on some of the costs more easily than other modes of transportation.

Furthermore, railroads have been investing in advanced technologies to provide tracking of goods at every stage of its transit that includes not only position but also condition of goods estimate. Investment in superior handling of journey disruptions combined with an almost single-minded pursuit of the cargo sector has made many companies very worthwhile investments, with several years of profitable growth ahead. This five year picture of the Dow Jones Railroad Index gives you a sense of the type of stock market returns the industry has provided.

For specific companies, take a look at Northern Santa Fe and CSX Corp as well as the larger Union Pacific. Most freight shipments are intermodal nowadays, utilizing parts of air, road, rail and ship - and only those companies that can cleanly share information across multiple modes will find success moving forward. Also, it is worth checking for plans in these companies once fuel prices stabilize - and other industries respond to the new, higher level of fuel prices to become more competitive.

No transport industry is immune to recessions, but they also tend to rebound the first - so this might be a good time to take positions in the railroad renaissance that has already been underway for a few years now!