Luis Escalante, 47, spent a year sorting past-due bills at his kitchen table, trying to keep A&B Transportation — his eight-truck Southern California firm — afloat. Costly repairs and competition already squeezed margins. Then the war in Iran sent diesel prices soaring past $5, $6, and $7 a gallon, roughly 70% higher than a year earlier. The added fuel costs, thousands per month, made his high-interest loans unsustainable. He filed for bankruptcy in September, one of at least 40 trucking companies nationwide to do so that month, a 38% increase from 2023, according to BKwire.
"When diesel goes from under $4 a gallon to over $6 in a year and freight rates don't follow, the difference comes straight out of the owner's pocket," said David Cruz, a bankruptcy lawyer in Florida. He's seen a surge in trucking clients since the war began.
President Trump signed an executive order allowing purchase of red-dyed diesel — normally restricted to off-road use — and deferring fuel taxes. But Desiree Wood, president of Real Women in Trucking, called the relief insufficient: rising fuel prices are "essentially a final nail in the coffin" for small operators in an industry that boomed during the Covid pandemic but is now oversaturated.
Escalante's dream began in Tijuana, Mexico, watching trucks cross the border. After years driving cross-country, he launched A&B Transportation around 2016 to stay near his family in Riverside County. The company grew steadily until the fuel crisis erased its margins.
Source: New York Times Business · Summarized by HeadlinesBriefing