Mass Layoffs, Trucking Bankruptcies Mount Amid Diesel Price Shock - Newsweek
American trucking firms have been filing for bankruptcy and laying off hundreds of workers as logistics businesses struggle amid soaring fuel costs.
The price of diesel stood at $6.39 as of Thursday, per AAA, up more than 70 percent from $3.71 at the same time last year and down only slightly from the $6.53 all-time high reached last week.
According to the latest "Freight Distress Report" from the supply chain-focused publication FreightWaves, the spike has coincided with signs of distress from within the logistics industry. Last month, at least eight large trucking outfits filed for Chapter 11 bankruptcy, including major players like Xoco Transport and Globemaster.
And the wider freight economy is also seeing a spike in layoffs, with reductions across well-known transportation and logistics firms, including 230 jobs at 4XH Logistics in Texas and 106 positions at Capstone Delivery in California.
Newsweek has attempted to contact the companies via email for comment.
Layoffs and bankruptcies are occurring nationwide, with several cases emerging in California and Texas in recent weeks.
Some of the eight large trucking outfits' Chapter 11 claims reviewed by Newsweek revealed high debt-to-asset ratios alongside lingering financial difficulties, rather than pointing directly to diesel prices as a factor. Chapter 11 claims aim to restructure debt and allow a company to keep operating during the process.
The Texas-based carrier Xoco Transport reported a $609,000 net loss for the first seven months of 2026, along with $2.2 million in assets and $3.3 million in liabilities.
The broader freight sector has also seen a wave of layoffs amid the fuel surge, with FreightWaves reporting close to 2,000 layoffs across delivery firms, manufacturers, and packaging companies over the past few weeks.
This includes employees at the Texas-based 4XH Logistics LLC, a delivery partner for Amazon, which in early September said it would be letting go of 230 workers in San Antonio. In an interview with the San Antonio Business Journal, the company’s CEO said that the move was due to the loss of its contract with Amazon.
Capstone Delivery's 106-person layoff in California is scheduled to take effect November 21.
Neither the companies seeking bankruptcy protection nor those implementing headcount reductions directly blamed rising diesel for their decisions. But economist Willy C. Shih has noted that rising fuel costs will be hard for any business to bear, especially those in the logistics sector. Shih, a professor of management practice at Harvard Business School, said it could now cost around $3,000 for a truck to haul goods cross-country, based on $6.50-per-gallon diesel and around seven miles per gallon.
"If you think that isn’t going to get passed on to consumers, think again, because nobody else along the chain can afford to eat that increase in costs," he told Newsweek. "These high diesel costs also come at harvest time, and farm machinery all rely on diesel. Farmers were already struggling, and this just piles more troubles upon that crucial sector to the American economy.
As he notes, beyond transport, there are signs that near-record diesel will feed into the costs of goods themselves.
In September, John Boyd, a grains and cattle farmer based in Virginia, told Newsweek it now cost close to $1,000 to fill up his combine harvester, and that the economics of this when making only $5 per bushel of corn (56 pounds) meant he and fellow croppers "just can't survive."
Amid these warnings—and the expected electoral implications of soaring fuel costs for the Republican Party at the midterms—the Donald Trump administration has weighed up measures it hopes can bring down prices or contain any further rally.
Speaking in the Oval Office on Wednesday, Trump said he was "thinking about" a ban on U.S. diesel exports, and said this could help to lower costs for American drivers and businesses. He noted that this "might raise the price of other things," adding that oil prices "are going to start to come down."
The proposal has been criticized, however, including by his own officials. Last week, Energy Secretary Chris Wright said that the "blunt tool of banning diesel exports definitely doesn't work," while Interior Secretary Doug Burgum has warned that this "could actually hurt Americans" if there was "retribution" from other countries.
Newsweek’s reporters and editors used Martyn, our AI assistant, to produce this story. Learn more about Martyn here.
Contact Newsweek editors on this story: Matthew Cannon and Gray R. Thomas
