As of last Monday, the cost of diesel was $1.94 higher than it was a year ago “which is significant,” Todd Spencer, President of the Owner-Operator Independent Drivers Association told Yahoo Finance.
“For our guys, the majority of truckers will burn between 18,000-20,000 gallons of fuel a year. So looking at those costs, you’re talking about $90,000-$105,000 a year just on fuel,” he added.
Most “goods are hauled around the country by truck and rail using diesel fuel to power their engines and diesel prices are going up more than gasoline prices,” strategist Andy Lipow wrote in a recent email to investors.
“Fed Ex (FDX) UPS (UPS) and Amazon (AMZN) delivery services are all being impacted by the soaring diesel prices, and they eventually are going to have to raise their rates,” he added, Yahoo Finance reports.
Independent trucker Michael Whitaker says he remembers the gas crisis of the 1970s and the recession of 2009. He’s afraid that some owner operators won’t survive with costs so high.
“I think we’re going to have a lot of bankruptcies of individual drivers, trucking companies,” Whitaker told Yahoo.
“If you don’t manage your money, you ain’t going to be in business long,” he said. “When things get rough you’ve got to have enough money saved up to hold you up through the rough times.”