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One of the hidden costs of the tsunami disaster in Southeast Asia has been the damage to the Malacca Straits, one of the most important trade routes in the world.

The channel between Sumatra and the Malay Peninsula that connects the Andaman Sea with the South China Sea is traditionally one of the most active shipping lanes on the globe. In fact, according to the Malacca Straits Research and Development Centre, as much as $1 trillion in cargo and services passes through it each year.

However, the

Associated Press

has reported that water depths in sections of the Straits have shifted dramatically in the wake of the Dec. 26 tsunami. Sections that were once more than 1,000 feet deep are now as shallow as 100 feet, slowing shipping as routes are recharted and changed. Moreover, thousands of buoys that served as navigational aids disappeared, and old shipwrecks were relocated and joined by new wrecks, meaning these all must be mapped anew.

So far this has caused a lift in international ocean-shipping rates, which had fallen sharply following November's decline in the price of oil. The Straits are the key connection between Europe, India and the rest of Asia and Australia. By using this route, Japanese petroleum shippers traveling from the Persian Gulf to Yokohama save tens of billions of dollars per year compared to alternatives, according to Malacca Straits Research.

If shippers now need to go much slower than normal through the Straits, the price to shippers will be passed along to customers, and will also show up as revenue improvements for the shippers themselves. And of course there are a limited number of ships available, so heightened demand should boost prospects as well, particularly for shippers that operate on the spot market.

Many of the front-line oil, drybulk and cargo shipping companies in the world have become well known to investors in the past year, as their earnings improved along with oil prices in 2004. Damage to the Straits, not to mention a rekindling of oil prices, appear to be doing the same now, as shipping stocks approach, and rebound from, long-term price supports.

Shares of

Stolt-Nielsen

(SNSA)

, a British-based shipping conglomerate, have performed best since the damage to the Straits became evident, topping its historic 1997 high of $31 earlier this week. Sporting a $1.9 billion market cap, it is a little cheaper than its peers due to some divisions that are a little far afield. Profits have been elusive despite $2.3 billion in trailing 12-month sales, but they're inching back.

Frontline

(FRO) - Get Report

, the world's largest tanker company, has also seen shares improve of late. The stock rose as high as $64.25 in November, then backed off to its 200-day moving average. Shares found support there, and have advanced 2% for the year, which isn't much but does outpace the broad market. Frontline runs 31 Suezmax-class tankers and 35 VLCC-class tankers, totaling a carrying capacity of 15.3 million deadweight tons. The company says most of its vessels trade in the spot market, which yields higher prices at times like these as it is more responsive to event-based demand. Frontline sports a $3.3 billion market cap, $1.7 billion in trailing 12-month sales and $604 million in income.

Some smaller companies to consider are

Excel Maritime Carriers

(EXM)

, a spot-market focused drybulk carrier based in Bermuda but run out of Greece. This $225 million market cap stock was a momentum trader plaything last year but has backed off to long-term support. The stock of

Tsakos Energy Navigation

(TNP) - Get Report

, a larger Athens-based firm with 28 modern oil tankers, could likewise find support from its recent decline to around $33.25.

Please note that due to factors including low market capitalization and/or insufficient public float, we consider Excel Maritime to be a small-cap stock. You should be aware that such stocks are subject to more risk than stocks of larger companies, including greater volatility, lower liquidity and less publicly available information, and that postings such as this one can have an effect on their stock prices.

Jon D. Markman is publisher of StockTactics Advisor, an independent weekly investment research service, as well as senior strategist and portfolio manager at Pinnacle Investment Advisors. He also writes a weekly column for CNBC on MSN Money. While Markman cannot provide personalized investment advice or recommendations, he welcomes column critiques and comments at

jon.markman@thestreet.com.

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