Every New Year I always want to be where I'm not at the moment. Hence we begin our series on sectors with transportation, since I'm sitting here at my computer rather than on a beach in Aruba. I'm not all down in the mouth, though - this industry is in for some exciting changes, and I - for one - want to know how to stay on top of future movements in this sector.

This sector can also be very depressing. Some of you may be in denial about some issues, and some of you may not want to share the information with your children. I understand the depression, but please don't keep the kids in the dark. Your child might be the one that develops the changes needed to make this sector safer for us all.

Transportation in regards to a market sector means any vehicle or means of transporting anything from one location to another. The means include automobiles, trucks, buses, motorcycles, trains, aircraft, and waterborne vehicles used for transporting goods and people.

The U.S. transportation sector is dominated by highway travel, mostly what is called "light-duty" passenger travel. As incomes and population levels increased, this mode of transportation jumped right along with them. Between 1974 and 1995, personal vehicle volume grew by 2.8 percent per year. 46% of these sales are in Sports Utility Vehicles (SUV), up 17% since 1980.

Next in line for volume is freight transportation. This mode constitutes roadways and trains, but can also incorporate air or ship travel that includes - but is not limited to - transporting goods. Many shipping companies now use a variety of means to get your goods from one place to another. If any of you have ever tracked a package, you know that these means don't always appear to be efficient.

Other than wondering why a package ordered in Illinois needs to travel through five states to arrive to its destination in Illinois, I've pondered just how far we can take the fuel emission control debates in this country. The U.S. transportation sector is responsible for the largest amount of energy consumption and greenhouse emissions. Our light-duty passenger travel alone is responsible for 74% of highway energy consumption and carbon emissions in this country.

But, almost half of you aren't interested in fuel economy. At least, that's what consumer surveys show. Low gas prices, the availability and convenience of larger vehicles, and a lack of education are part of what led to this disinterest. However, if you want to stay ahead of the pack in this sector, it would be wise to pay attention to this information. Why? Because standards have been set by some countries to meet certain quality standards for emission controls by the year 2010, and that means a number of things will change in this sector. You know what change means?new channels for investment.

Although 2010 seems light years away, the length of time is a mere pittance compared to the seeming complications and obvious money it will take to overhaul this industry to meet standards. Let's dig a little deeper than the outer shell of our transportation modes to see the investment opportunities that lie in wait for us over the next decade.

For instance: more than one company in the business of shipping has turned to intermodal transportation. This means some companies have actually come up with ways to cut time and costs in delivery, and in their own costs and limits in meeting some of the emission control standards. Look for transportation companies that combine and diversify various modes of transportation, and who appear to know what they're doing.

You can also look under the hood for companies developing new ways for our transportation to function more efficiently. Some companies would include those who develop fuel injection, valves, and other engine parts.

Improvements in various body parts are considered mundane markets for those seeking more rapid advancements in this sector. The interest for these visionaries lies in markets for hybrid electric drivetrains, cellulose ethanol, and lower weight structural materials.

Hybrid electric drivetrains combine an internal combustion engine or other fuel power source with an electric drivetrain, motor and battery (or other power source). At least one automobile manufacturer has already introduced this form of transportation in Japan. The recent discovery with these vehicles is that they perform best in stop-and-go traffic. Look for companies willing to try these vehicles for public transportation in inner-city environments.

Cora thought about Nebraska's corn as we waded through explanations on cellulose ethanol. We found about one billion gallons of ethanol is produced from corn annually and used in U.S. transportation markets as a blend stock for gasoline. The offset to the advancement of this form of energy production would be the world price of oil over the next decade.

Land requirements would also limit production of cellulose ethanol. However, there are other uses for biomass (which is part of the ethanol process), which we'll cover later. The trick to conversion is to convince our government and our own gas-guzzling selves that biomass is one way to go - literally. The only convincing we'd really need is for our oil sources to become totally unavailable. We'll cover that possibility in another sector.

Lower weight structural materials in this industry have a restrictive past due to cost considerations, technology barriers, and strength and reliability mandates from the U.S. automobile industry. Look at some firms in Europe. Europeans seem more concerned with rising death rates due to auto emissions, and they seem to be more progressive in their inventiveness. Some manufacturers are using crops to make new materials for automobile interiors. In the U.S., the Auto Aluminum Alliance has set a goal of 40% weight reduction for auto bodies - but this lighter weight has a possibility of a "snap-back" effect. Lighter cars with better gas consumption might mean more use of the cars, with no decrease in auto emissions standards.

These new technologies are spilling over into other transportation modes. Each form of transportation in this sector will go through progressive changes as we focus on faster, more efficient ways of moving things from point A to point B, while slimming back on waste emissions.

I'd be happy with a faster, more efficient way to get from here to a beach in Aruba.

Cora and I hope you'll have a wonderful celebration of this holiday season.

Until next week,
Linda Goin