Oil prices are soaring amid geopolitical tensions and tight supply, extending their rally into a seventh consecutive week. Brent crude climbed 2.37% to end Friday at $93.27 per barrel, while U.S. West Texas Intermediate crude settled 2.26% higher at $92.31 per barrel. Rising crude oil prices lead to higher diesel prices, which increases costs for trucking companies.
Fuel is a shipping and freight company’s most significant expense after labor costs. Therefore, surging fuel costs are currently hampering their profits. Furthermore, the labor shortage and rising inflation are making matters worse. According to a recent Bank of America Global Research report, the crunch seen in the trucking industry is showing no signs of abating. Also, BofA found that shippers’ short-term positive outlooks have fallen, while negative outlooks have climbed, reflecting a deteriorating consensus outlook for the industry.
