A person walks in front of a semi-truck parked at a cargo shipping container on a rail yard in Commerce, California on Aug. 26, 2026.
Patrick T. Fallon | AFP | Getty Images
Transportation companies, the lifeblood of the U.S. economy, are flashing warning signs as diesel costs hit records.
Prices for diesel, the fuel type used to power trucks and trains, came in at an all-time high of around $6.31 per gallon on Wednesday, according to AAA. Diesel prices have surged more than 70% from a year ago, which analysts attribute to the supply shock from the U.S. war with Iran.
“We have seen some of the mostradicalandabnormalswings in fuel prices that I think we’ve ever seen,” said Brad Delco, finance chief at trucking company J.B. Hunt, at an industry conference hosted by Morgan Stanley.
Delco said to expect a drop in earnings between 5% and 10% from the second to third quarter as a result of higher costs. Shares of J.B. Hunt dropped more than 13% in Wednesday’s session, putting the stock on track for one of its worst days since going public in 1983.
J.B. Hunt, YTD
The Dow Jones Transportation Average, a broader gauge of the sector, fell more than 2% in midday trading on Wednesday. J.B. Hunt was the biggest loser of the index, which also includes rideshare providers and airlines.
‘Science fiction’
Those diesel-related price pressures should only intensify in the coming days, warned Patrick De Haan, head of petroleum analysis at price tracker GasBuddy.
The national average could eclipse $6.50 in the next two days, De Haan said. Midwest states such as Michigan, Ohio and Illinois may see per-gallon diesel prices touch $7 in the coming days, according to his estimates.
In California, AAA found that the average rate for a gallon of diesel has already surpassed $8. Prices have climbed almost 20% in the last month alone, according to the motor club association’s data.
“We’retalking about$6diesel, butouthere,it’s$8diesel,wenoticedonthewayin,which is like science fiction,” said Claude Elkins, chief commercial officer at railway transporter Norfolk Southern, on Tuesday at the Morgan Stanley conference held in Laguna Beach, Calif.
Elkins said he keeps a “very cautious eye” and has conversations about what those price levels will “mean for the economy.” The transportation services sector added $1.9 trillion to the U.S. economy in 2024, accounting for more than 6% of the country’s total enhanced gross domestic product, according to the Bureau of Transportation Statistics.
“Thatcertainlyissomethingthatwehavetokeepoureyesopento,” Elkins said. “Ultimately, over some period of time, that’s going to be a drag on the consumer out there.”
Dow Jones Transportation Average, YTD
To be sure, retail sales climbed 1.2% from July to August despite energy-related inflationary pressures. Excluding spending on autos and gas station, sales came in at their highest level in more than a year.
Still, diesel’s record-setting rise colliding with the fall harvest season means that costs will balloon for producers of crops like corn and wheat, according to Jacob Aiken-Phillips, head of consumer and retail research at Melius Research.
Economists have warned that higher inputs can result in sticker shock for Americans when grocery shopping or dining out. But Aiken-Phillips said those fuel-related inflationary pressures should be absorbed first through farmers, transporters and retailers before being passed down to consumers in the form of price hikes.
George Gianarikas, an analyst at Canaccord Genuity, told clients on Wednesday that rising fuel prices could help drive demand in the transportation sector for autonomous trucking and electric freight offerings.
— CNBC’s Laya Neelakandan contributed to this report.
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