A day at a truck stop in Texas shows an industry essential to the U.S. economy under tremendous pressure ORANGE, Texas—Across the 12 fuel lanes at the Flying J Travel Center off Interstate 10—where rigs carrying soft drinks, steel, Mexican produce and Mississippi-bound car parts rumble to a stop—the economics of trucking have broken down. Diesel prices have been climbing most of the year, recently hitting a record national average retail price of $6.53 a gallon, up nearly $3 from the average a year ago. President Trump floated an export ban on diesel, but on Friday that threat seemed to fade after G-7 countries agreed to release 100 million barrels of oil from emergency stocks.
The moves were an acknowledgment that soaring diesel prices are the clearest sign of inflationary pressures from the U.S. conflict with Iran, with the effects rippling into the broader global economy. Nowhere is the impact more obvious than at the Flying J, just over the border from Louisiana at the crossroads of a U.S. consumer economy that runs on diesel. On Thursday, diesel at the Flying J hovered around $6.26 a gallon.
Agron Berani pulled the pump out of his 18-wheeler loaded with steel and electrical supplies bound for Beaumont, Texas, and pointed to the screen with a groan: $944.44. A year ago in Texas, the same 151 gallons would have cost around $500. He took out his credit card, already loaded with around $8,000 of debt, and swiped.
We have to do what we have to do, said Berani, who is 56 and lives in Yonkers, N. Y. I can’t sell the truck.
What am I going to do if I sell the truck? He blames the price jump on Trump, whom he voted for in the last election, the first in which he could vote since becoming a U.S. citizen after immigrating from Kosovo. Every idling minute was income lost: One driver sprinted from his truck into the concourse. Inside, nobody was lingering.
Three rows of brown pleather armchairs facing a TV tuned to the American Heroes Channel were unusually empty on this afternoon. The 14 showers went mostly unused. If my wheels ain’t turning, I ain’t earning, said Kevin Smith, a 50-year-old driver who worries he’ll no longer be able to support his family on his trucking income.
Most independent truckers who operate job-to-job on the so-called spot market pay for their own costs, like fuel. To make up for high prices at the pump, drivers cut elsewhere. Out at the fuel bays, truckers spoke about cooking meals inside their cabs, sleeping where they unhooked their trailers to avoid overnight parking fees and waiting for rainstorms to clean their rigs rather than paying $100 for a wash.
Some were parking their trucks altogether. Small operators, which dominate registered motor carrier companies, can’t keep up: More than a dozen have filed for bankruptcy in the past month, and the Owner-Operator Independent Drivers Association warns more will follow if fuel prices don’t drop. Smith was heading to a Louisiana Walmart distribution center to unload 37,000 pounds of potatoes.
Driving from his home in nearby Lake Charles, La., to Colorado to pick up the produce and back had cost him over $2,500 in fuel, including what he spent Thursday afternoon filling up at the Flying J. After paying $1,800 a month on his truck loan and $1,300 a month in insurance, his margins were tight on the job, which paid a flat fee of $4,600. If I don’t move these potatoes, you don’t get your french fries, Smith said.
But I can’t even afford to keep this running. Fuel surcharges protect some carriers from price shocks by ensuring that shippers pay more when fuel prices rise. But the severity of the increase caught the industry by surprise.
Nobody expected prices to ever get this high, said American Trucking Associations chief economist Bob Costello. Independent drivers operating with thin cash reserves struggle to cover thousands of dollars in upfront fuel costs while waiting to be repaid. Smaller carriers also lack the bargaining leverage of major fleets to demand...
Source: Wall Street Journal US Business · Summarized by HeadlinesBriefing