Could a brief 10% rise in fuel prices push thousands of trucks out of the industry?
According to a FreightWaves article concerning trucking company failures, "Why Truck Failures Could Increase in 2019", there are three leading drivers to why carriers go out of business, which are:
1. Spot Rates going significantly lower (rates near bottom levels)
2. Contract Rates going significantly lower (market is currently here)
3. Fuel Costs rising significantly based on percentages, specifically the year over year percent change of diesel prices.
According to CNN Business:
New York/Hong Kong (CNN Business): "Oil prices spike after Saudi attack disrupts global supply"
Oil prices have spiked after a devastating attack on the heart of Saudi Arabian oil production over the weekend shocked markets and could disrupt the global supply of crude for some time.
Prices initially surged as much as 18% but retreated after US President Donald Trump said on Sunday night that he had authorized the use of oil from the country's emergency oil supply. Trump said oil from the Strategic Petroleum Reserve, or SPR, would be used "to keep the markets well-supplied." The US reserve is the largest backup pool of oil.