China's Winning Warehouses

New container terminals are under construction or planned for Houston; Mobile, Ala.; Jacksonville, Fla.; Charleston, S.C.; Wilmington, N.C.; and Norfolk, Va. Voters in Panama have approved a long-delayed expansion of the Panama Canal, scheduled for completion in 2014. Just south and north of the U.S. borders, new ports are under construction or being planned for Lazaro Cardenas, Mexico, and Prince Rupert, British Columbia.

How do you profit from all that activity? By looking at the next stage of the bottleneck. All that container traffic has to get from these ports to stores and warehouses around the U.S. That means railroads and trucks. Especially railroads.

The neatest thing about railroads, in my opinion, is that they aren't making any more of them. With the economy softening, I'm not sure I'd snap up any of the big railroads now, but Burlington Northern Santa Fe(BNI Quote) and Canadian Pacific Railway(CP Quote) would be my choices on any weakness.

Warren Buffett's Berkshire Hathaway(BRKA Quote) had bought about 11% of Burlington Northern as of last week. Buffett has been purchasing shares of two other unidentified railroad stocks, too.

Don't think that trucks and roads are too mundane to invest in, though. There's big profit to be made these days in roads and improving the trucks that haul stuff on them. The Chinese and other developing countries are determined to build out their infrastructure in this area. And the U.S. knows that it's always just a traffic jam away from a commerce-crippling bottleneck.

At the time of publication, Jim Jubak did not own or control shares of any of the equities mentioned in this column. He did not own short positions in any stock mentioned in this column.