The trucking companies responsible for keeping goods moving on America’s highways are facing a growing financial squeeze, notes an article in Yahoo!Finance. Financial writer and editor Rich Duprey says in the October 1 feature that record diesel prices, rising insurance premiums, and higher maintenance expenses are colliding with freight rates that haven't kept pace. He notes that smaller operators often work with a smaller financial cushion, making them particularly vulnerable. Larger logistics companies such as UPS, FedEx, J.B. Hunt and GXO are able to invoke fuel-surcharge clauses in existing contracts, and have the advantage of scale and, often, better liquidity.
Sixteen trucking companies filed for bankruptcy between late August and September 21, as diesel prices surged 72% in 12 months to a record $6.53 per gallon.
Duprey says a 40-truck fleet now needs $20,000 in extra weekly fuel costs, while facing customers who refuse to pay higher freight rates.
“In short, America's supply chain isn't collapsing, but it may be approaching a breaking point, especially for smaller transportation operators who are showing unmistakable financial distress,” Duprey warned.
