Diesel prices in the United States have climbed to a record high, raising concern across the transport and logistics industry. CNBC reports that the market disruption is already affecting both companies’ earnings outlook and investor sentiment.
The average price of a gallon of diesel has risen to $6.31. On a year-on-year basis, that is an increase of more than 70%, driven by a broad supply shock. Analysts warn that the jump in fuel costs could cut logistics companies’ revenues by 5-10% as early as the current quarter.
Markets reacted swiftly to those concerns. Shares of major freight carriers fell sharply, while the Dow Jones Transportation Average dropped by more than 2%.
Brad Delco, chief financial officer of logistics company J.B. Hunt, told CNBC that the market is experiencing the sharpest and most abnormal fuel price swings the industry has ever seen.
Transport remains a critical part of the US economy, meaning higher costs are expected to feed through to consumers. Record fuel prices during the autumn harvest season could also raise costs for agricultural producers, adding further inflationary pressure to retail prices.
