A person walks in front of a semi-truck parked in a freight shipping container at a railroad yard in Commerce, California, on August 26, 2026.
Patrick T. Fallon | AFP | Getty Images
Transportation companies, the lifeblood of the U.S. economy, are flashing red flags as diesel prices hit record levels.
The price of diesel, the fuel used to power trucks and trains, hit an all-time high Wednesday at about $6.31 a gallon, according to AAA. Diesel prices have soared more than 70% since a year ago, with analysts blaming a supply shock from the war between the United States and Iran.
“We’ve seen some of the most extreme and unusual fuel price fluctuations we’ve ever seen,” said Brad Delko, the trucking company’s finance director. JB Huntat an industry conference sponsored by Morgan Stanley.
Delco said it expects profits to decline 5% to 10% from the second quarter to the third quarter as a result of higher costs. JB Hunt’s stock price fell more than 13% in Wednesday trading, one of the worst days for the stock since it went public in 1983.
JB Hunt since the beginning of the year
of Dow Jones Traffic AverageA broader index of the sector was down more than 2% in midday trading Wednesday. JB Hunt was the biggest loser in the index, which also includes rideshare providers and airlines.
‘SCIENCE FICTION’
Patrick de Haan, head of oil analysis at price tracker GasBuddy, warned that these diesel price pressures are likely to intensify in the coming days.
De Haan said the national average could rise above $6.50 over the next two days. He estimates that diesel prices could reach $7 a gallon within days in Midwestern states such as Michigan, Ohio and Illinois.
In California, the average price for a gallon of diesel is already more than $8, AAA found. Prices have risen nearly 20% in the last month alone, according to data from the Automobile Club Association.
“We’re talking about $6 diesel, and here it’s $8 diesel. I realized along the way, this is like science fiction,” said Claude Elkins, the rail carrier’s chief commercial officer. south norfolkat the Morgan Stanley conference in Laguna Beach, Calif., on Tuesday.
Mr. Elkins said he was keeping a “very cautious eye” and discussing what these price levels “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 strengthened gross domestic product, according to the Bureau of Transportation Statistics.
“That’s certainly something we have to keep an eye on,” Elkins said. “Ultimately, after a period of time, that’s going to be a drag on consumers.”
Dow Jones Transportation Average, year-to-date
Indeed, despite energy-related inflationary pressures, retail sales rose 1.2% from July to August. Excluding spending on cars and gas stations, sales were at their highest level in more than a year.
Still, the record rise in diesel prices, coinciding with the fall harvest season, means higher costs for producers of crops like corn and wheat, said Jacob Aiken Phillips, director of consumer and retail research at Melius Research.
Economists have warned that the increased inputs could cause sticker shock for Americans when shopping for groceries or eating out. But Aiken-Phillips said these fuel-related inflationary pressures should first be absorbed through farmers, transporters and retailers before being passed on to consumers in the form of higher prices.
Canaccord Genuity analyst George Gianaricas told clients on Wednesday that rising fuel prices could drive demand in the transportation sector for self-driving trucking and electric freight services.
—CNBC’s Laya Neelakandan contributed to this report.
