Mike Havrilla on BNI - Burlington Northern Santa Fe Corp

Transports have provided a safe haven for investors with the iShares Dow Transports ( IYT ) registering a small gain over the past year in spite of a meltdown in financials and sharp losses in the overall market averages, before the recent market meltdown. The gains in the Dow Transport ETF were largely the result of a strong performance by the top four U.S.-based railroads by market cap, which account for over 30% of the stock holdings in IYT.

As evidence of increased commercial interest and product development ofglobally-focused transport ETFs among major providers, the following ideas have recently been either launched or filed: Claymore/Delta Global Shipping (SEA - launched in Aug), PowerShares Global Progressive Transportation (PTRP - launched in Sep), and SPDR Transportation (filed with SEC).

I think the increased interest by investors in transports warrants commercial development of focused ETFs in the following segments on a global basis:

1.) Railroad: A bullish segment due to pricing power as a result of limited ability to add capacity and increased demand for fuel efficient transport of energy and agricultural commodities.

2.) Short Maritime: There is now a long ETF for investors and traders as of the 8/25/08 launch of Claymore/Delta Global Shipping ( SEA ). However, with the Baltic Dry Index down 42.8% over the past year on concerns of a global slowdown and the high volatility of shipping stocks; a short ETF may be a good idea at this time.

3.) Short Airline : Although the industry is getting a lift from falling oil prices and presents an excellent trading vehicle due to high volatility, Southwest Airlines ( LUV ) is the leading company and only long-term investment vehicle I would consider as a hedge to an overall short position.

4.) Short Trucking: The top five companies by market cap in the trucking, air freight, and ground delivery segment account for over 50% of the entire global index of 49 companies with market caps over $250M US Dollars which have posted a loss of over 20% in the past year on a market cap-weighted basis (click to enlarge chart, above). As a long position and hedge to a short on the overall segment, I would consider Ryder System ( R ) as a long-term investment in this group based on its truck rental/leasing and supply chain management business model.

5.) Short Autos: Investors are familiar with the struggling U.S. auto makers, Ford (F) and General Motors (GM), but even industry leader Toyota (TM) is down over 45% in the past year. Also, breaking news last night suggests GM and Chrysler are holding talks for a possible merger.