Trucking industry hit by string of bankruptcy filings as diesel costs surge
Globemaster, CLJ Transporting and Jett Transport & Materials among Chapter 11 filers
Automotive expert Lauren Fix discusses how rising fuel costs can impact transportation, businesses and consumers.
A string of trucking and freight companies filed for bankruptcy in September as rising fuel, insurance and other operating costs squeeze an industry that plays a critical role in moving goods across the U.S.
At least eight transportation-related companies sought Chapter 11 protection during the month, according to bankruptcy documents reviewed by FOX Business, with one trucking company owner pointing directly to diesel and insurance costs as factors behind his filing.
Truckload LLC owner Marcus Overcast told FOX Business that diesel and insurance costs contributed to his company's bankruptcy in Florida, with insurance representing the biggest pressure.
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A string of trucking and freight companies filed for Chapter 11 bankruptcy protection in September. (Smith Collection/Gado/Getty Images, File)
Those costs can extend well beyond the trucking industry.
Automotive expert Lauren Fix told FOX Business that the pressure from higher diesel prices extends far beyond trucking companies because nearly everything consumers buy must be transported at some point in the supply chain.
"When gas prices go up or diesel prices go up, everything that goes from point A to point B is affected," Fix said.
From agricultural equipment and goods moving from ports to warehouses to food and package deliveries, higher transportation costs can ripple through the economy and ultimately reach consumers.
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The financial strain comes as diesel prices have surged, adding another expense for trucking companies already contending with costly insurance and other operating pressures.
President Donald Trump moved this week to provide relief, temporarily allowing red-dyed diesel normally reserved for off-road use to be used on highways.
Automotive expert Lauren Fix told FOX Business that rising diesel prices and fuel surcharges can have far-reaching effects across the economy. (M. Scott Brauer/Bloomberg via Getty Images, File)
Fix said the move could make a "huge difference," estimating it could save drivers between 50 cents and $1 per gallon.
The White House also said Trump reached an agreement with Europe to release 100 million barrels of refined diesel and crude oil from strategic reserves over the next four months.
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The September bankruptcy filings span trucking and freight companies across several states, with some reporting liabilities well above their assets, all as the industry has faced rising costs.
Overcast’s Truckload LLC filed Sept. 9 in U.S. Bankruptcy Court for the Middle District of Florida. The company estimated assets between $100,001 and $500,000 and liabilities of less than $50,000.
The filings do not identify a common cause behind the bankruptcies, but they come as the trucking industry faces higher fuel costs. (Justin Sullivan/Getty Images)
In addition, Globemaster Incorporated filed Sept. 15 in Illinois under Subchapter V, reporting approximately $1.1 million in assets and $3.26 million in liabilities. CLJ Transporting Inc., which filed the same day in Florida, reported approximately $483,205 in assets and $823,161 in liabilities on a July balance sheet.
Pacer Transport Inc., filed Sept. 4 in Louisiana, estimating less than $50,000 in assets and between $1 million and $10 million in liabilities. Texas-based Jett Transport & Materials, LLC filed Sept. 14, estimating assets between $100,001 and $500,000 and liabilities between $500,001 and $1 million.
Mill Creek Logistics–Illinois Inc. filed Sept. 14 in Kansas, listing approximately $885,500 in assets, including $808,000 in trucks and equipment, against roughly $1.83 million in liabilities. Arizona-based RP Hay Hauling, LLC filed Sept. 10, reporting approximately $1.32 million in assets and $1.53 million in liabilities.
And Xoco Transport LLC filed Sept. 16 in Texas, estimating both assets and liabilities between $1 million and $10 million.
Trucks parked at a truck stop in Missouri. (iStock)
"Everything has to get somewhere somehow and so everything gets more expensive," Fix said.
Diesel was selling for about $6.26 a gallon Thursday at a Flying J truck stop in Orange, Texas, according to The Wall Street Journal.
FOX Business reached out to Globemaster Inc., CLJ Transporting, Pacer Transport, Jett Transport & Materials, Mill Creek Logistics–Illinois, RP Hay Hauling and Xoco Transport for comment.
FOX Business' Stepheny Price contributed to this report.