Trucking bankruptcy due to diesel costs

Welcome back to Houston Live and Local. Well, let's talk a little bit about trucking bankruptcies. You've seen the high diesel prices all over, and bankruptcies are piling up as diesel stays near record highs. And this is kind of astonishing. Sixteen, at least 16, trucking, delivery, and transportation companies filed for bankruptcy between late August and September 21st, according to a tally by the trade publication FreightWaves. Joining me now to discuss what this means for your wallet. I mean, this really is affecting so many people from the drivers to everything they're delivering is president of Lepau Oil Associates. Andy, thank you so much for joining us. We appreciate your time on such an important topic here. What is it that people need to know how this affects them directly, even if you're not a truck driver? Well, thanks very much for having me, Coco. What you need to know is diesel is like a stealth tax because diesel is the fuel that the trucks and the railroads are all using. to deliver all those goods and services that we're buying, as their fuel costs go up, they've got to pass that on to the consumer in the form of either freight surcharges or higher costs. And you really see that at the grocery store where the farmer, of course, is using diesel fuel in their tractors and harvesting equipment. Then they're putting all that truck going to some elevator that is turned into, you know, some food item that we're buying at the grocery store. And each step of the way is using more diesel fuel. OK, and tell me a little bit about the actual truck drivers. I feel so bad for them. I mean, they are paying thousands just to get the diesel. Well, they're really in a difficult situation because the average semi-trailer, the 40-footer that you see on the highway, when they go up to fill up with diesel, they're buying about 250 gallons. And at $6.50 a gallon, that's over $1,600. And if you're in California, it's even worse when they're paying $8.50 a gallon. They have to come up with $2,000 every time they're filling up their truck. That is really terrible. Is this going to continue like this? You expect it to get worse or better? Well, the biggest issue is that the world right now doesn't have enough refining capacity to produce all the diesel that we're consuming. And that's due to, of course, the conflict between the U.S. and Iran and Iran attacking refineries in the Persian Gulf. We've got the Houthis who are attacking refineries in the Red Sea. And of course, Ukraine has been attacking Russian refineries that has also taken diesel off the market. So we're really facing this supply crunch of diesel fuel. And that's why you've seen the administration try to take a number of steps to ease the prices, starting with allowing red dye diesel, which is exempt from the 24 cent per gallon federal excise tax. to doing a deal with Russia to get more diesel on the market to today announcing that they're going to release a little over 300,000 barrels of home heating oil out of the Northeast Home Heating Oil Reserve. Okay, so let me ask you, is there anything that a consumer can do to better their situation, maybe buy locally or not so much at the big stores? I mean, just anything. Well, unfortunately, I don't think there's very much a consumer can do to reduce their cost of diesel because we're all beholden to go into the grocery store or the mall or whatever is delivered by FedEx or Amazon or UPS. We're kind of stuck with all those higher delivery charges. That's terrible. I was hoping that you were going to give us some kind of answer on what exactly we can do. But is there anything else you want our viewers to know? I know you've been so insightful throughout this entire time as things have gotten worse. I would say gotten better, but they haven't gotten much better. Well, one day I'd like to come on, Coco, and give you some good news. But I think in all honesty, really what it takes is an end to the conflict in the Middle East, as well as an end to the conflict between Ukraine and Russia, so that the oil market will look ahead and say oil supplies and diesel supplies are going to get better. but right now the situation is that we don't really see much progress on the negotiation front all right well we are hoping for the best i mean this can't go on forever right andy right well it can't go on forever so i'm hopeful that over the course of the next couple of months we'll start to see something happen all right i'm hopeful as well thank you so much andy lapow with uh lapow oil associates thank you so much andy Thank you.