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Welcome to the oil death spiral

Welcome to the oil death spiral

There is something deeply tragic about watching people who would be dead within a fortnight without oil nevertheless calling for oil – and fossil fuels more broadly – to be banned immediately.  It is possible, of course, that these people believe that food grows inside supermarkets or that the chemicals used to provide clean drinking water can be beamed to the waterworks using Star Trek technology.  The hard reality though, is that every aspect of modern living – even for those of us surviving on the margins – depends upon oil… and not just any old oil.  The workhorse behind the modern, hi-tech western economies is the roughly 30 percent fraction of an average barrel of oil called diesel.

Take a look around the room where you are reading this.  Every item your eyes land upon was, at some point in its life, transported on a truck – if you are in the UK, a large part of it will have arrived on a ship from Asia too.  Almost all of those trucks used diesel as a fuel.  Some smaller trucks and vans may have used petrol (gasoline) and an even smaller number may have been electric… but only the small ones – you cannot run a large semi using batteries (at least, not if you want to leave some space for cargo).

Take another look around the room for anything made from or with plastic, or anything which is painted or dyed.  These, too required oil in their manufacture.  Almost everything made of metal or requiring metal as a component began life in the bucket of a diesel-powered crane, which loaded it as an ore onto a diesel-powered mining truck, which delivered it to a fossil fuel-powered grinding machine which, in turn moved the crushed ore to a fossil fuel (coal or gas)-powered smelter.

…click on the above link to read the rest…

A Warning About The Coming Shortages Of Diesel Fuel, Diesel Exhaust Fluid And Diesel Engine Oil

A Warning About The Coming Shortages Of Diesel Fuel, Diesel Exhaust Fluid And Diesel Engine Oil

What I am about to share with you is a developing situation, and I hope to share more once the facts become clearer.  It appears that a very serious diesel crisis is coming in the months ahead, and that will have a dramatic impact on our economy.  As you will see below, we are being warned that there will be shortages of diesel fuel, diesel exhaust fluid and diesel engine oil.  Most diesel vehicles require all three in order to run, and so a serious shortage of any of them would be a major disaster.  Needless to say, simultaneous shortages of all three could potentially be catastrophic.  Most Americans don’t spend much time thinking about diesel, but without it our supply chains collapse and we don’t have a functioning economy.  In a recent Time Magazine article discussing the coming diesel fuel shortage, we are told that “the U.S. economy runs on diesel”…

Though most consumers shake their heads at the cost of gasoline and complain about the cost of filling up their car tanks, what they really should be worried about is the price of diesel. The U.S. economy runs on diesel. It’s what powers the container ships that bring goods from Asia and the trucks that collect goods from the ports and bring them to warehouses and then to your home. The farmers who grow the food you eat put diesel in their tractors to plow the fields, and the workers that bring construction equipment to build your home put diesel in their trucks.

Since January, supplies of diesel fuel have been steadily getting tighter.

…click on the above link to read the rest of the article…

Truckers warn skyrocketing diesel prices are making US supply-chain and trucking industry unsustainable

Truckers warn skyrocketing diesel prices are making US supply-chain and trucking industry unsustainable

Truck passes  sign at Flying J Truck Stop in Pearl, Miss., Wednesday, April 20, 2022.
Truck passes sign at Flying J Truck Stop in Pearl, Miss., in April. The trucking industry offsets diesel prices through a fuel surcharge, which is calculated through a base rate that is usually added to a shipper’s freight bill.AP Photo/Rogelio V. Solis
  • Truckers are sounding the alarm on skyrocketing diesel prices.
  • A trucking company owner went viral after warning prices could cause major supply-chain issues.
  • Truckers told Insider they’ve had to take loads at a loss and are considering leaving the industry.

A Facebook post from the owner of a Texas trucking company went viral last week after he warned that skyrocketing diesel prices could have longterm consequences for the US supply-chain.

Austin Smith, owner of Iron River Express, said it has cost him over $20,000 a week to keep his three trucks running.

“If something drastic doesn’t change in the next few weeks/months, I promise you, you’ll see empty shelves everywhere you look,” Smith wrote in a post that was shared nearly 290,000 times. “You’ll see chaos as people fight for the basic necessities of everyday life.”

Smith did not respond to a request for comment from Insider in time for publication.

Insider spoke with five truckers who warned that the industry could be at a breaking point. The drivers say they’ve had to get creative in recent months as they work to turn a profit while spending thousands at the pump.

Richard Resek, a trucker based out of ports in New York and New Jersey, told Insider he’s turning off his truck and rolling down his window instead of using air conditioning during long summer nights. He also plots out gas stations with the cheapest fuel prices.

…click on the above link to read the rest of the article…

SHTF! You HAVE TO HEAR What This TRUCKING INSIDER said to ME! PREP NOW!

SHTF! You HAVE TO HEAR What This TRUCKING INSIDER said to ME! PREP NOW!

Why every American should care that diesel prices are surging across the country

Why every American should care that diesel prices are surging across the country

Gasoline prices are increasing almost daily, pinching the wallets and pocketbooks of nearly all Americans with cars. However, as bad as that news is, diesel prices are surging even more across the country. Today’s truckstop retail diesel prices hit a new record of $5.32/gallon. Since February 1st, national truckstop diesel prices have increased by $1.57/gallon. For an owner-operator whose truck gets 6.5 miles per gallon, this equates to a cost increase of $0.24 per mile.

A graph showing the price of diesel per gallon.

Diesel’s importance to our economy

To many Americans (including politicians), diesel prices are so removed from their version of reality that they often dismiss the importance of diesel to the U.S. and global economies. However, diesel is the fuel that drives the economy and leaves major industries vulnerable to cost shocks.

Without diesel fuel, the U.S. economy would collapse in a matter of days. Our supply chains would completely shrivel, almost overnight.

Trucks use it to haul our goods across the country. Of all Class 8 trucks (the big ones), 97% use diesel. No, Elon Musk is not going to save us here. When Tesla announced the Semi in 2017, Musk projected that over 100,000 would be produced by 2022. Today there are less than 20, mostly prototypes.

Trains also depend on diesel to transport products across the country. Almost every train in the country depends on diesel for energy.

An orange BNSF train hauls coal
A BNSF train hauls coal. (Photo: Flickr/Aaron Hockley)

Even a large portion of our electricity is indirectly powered by diesel. Over one-fifth (22%) of our electricity in the United States comes from coal. Diesel-powered trains transport coal to power plants across the nation.

Diesel is also critical to our imports and exports, because 80% of the ships that transport products via the ocean are powered by diesel.

…click on the above link to read the rest of the article…

No Trucking Way

No Trucking Way

The financial economy and real economy used to live with each other happily: now they are in a long-distance relationship reliant on logistics to keep in touch. What happens when those logistics break down? (Very bad thingsas I was discussing here the other day.)

We have covered the ocean-carrier side of this crisis (‘In Deep Ship’), and the new fee equivalent to $1m a day, and rising $1m each following day, for a 10,000 TEU vessel whose cargo is stuck in LA/LB port. However, we stressed in that report that the supply chain issue is more systematic. So, allow me to share quotes from an article exposing there is ‘No Trucking Way’ we are about to return to normal:

So when the coastal ports started getting clogged up last spring due to the impacts of COVID on business everywhere, drivers started refusing to show up. Congestion got so bad that instead of being able to do three loads a day, they could only do one. They took a 2/3 pay cut and most of these drivers were working 12 hours a day or more…

…click on the above link to read the rest of the article…

Truckers Wanted

It seems that the state of Florida is doing more to address the supply chain crisis than the entire Biden Administration. The American Trucking Association reported that their industry now has a record shortage of 80,000 drivers. Truck drivers are essential to maintaining a steady supply chain, and despite the climate change narrative, fewer trucks on the road mean that businesses cannot be supplied with the essentials they need. Distributors in Florida are now offering salaries of up to $110,000 a year with sign-on bonuses as high as $15,000. Even referral bonuses have been going for between $3,000 to $5,000. The plan to attract workers comes shortly after the state announced that their ports are open for business.

Nearly half of America’s small businesses are feeling the effects of the supply chain crisis. Ships have been forced to turn around from ports, rerouting back to Asia, as there have not been enough workers to transport products. The trucking industry has been warning that Biden’s policies would lead to disaster. “I’m pretty discouraged. I don’t know how anybody can think an anti-capitalist agenda can be good for transportation,” David Owen, president of the National Association of Small Trucking Companies (NASTC) told Transportation Nation Network (TNN) in January. The entire trucking industry has been hesitant since Biden stepped into office, and with good reason.

The Democrat-controlled House voted to raise the motor carriers’ liability insurance minimum requirement from $750,000 to $2 million, eliminating competition for larger trucking companies. Biden’s climate change agenda resulted in the Keystone Pipeline XL cancelation. His plans to reduce carbon emissions producers and fracking also resulted in higher prices at the pump. Ending the supply bottlenecks requires the US to put more trucks on the road, and truckers should be treated with dignity rather than criminals who are destroying the climate.

The Coming Trucking Apocalypse – What’s Causing It?

The Coming Trucking Apocalypse – What’s Causing It?

“While you’re sleeping, they’re hauling.  Have you thanked a trucker?” – Anonymous.

Even though the Coronavirus has wreaked havoc in the lives of people worldwide, truckers have been struggling to keep the country moving.  Global lockdowns, massive shifts in consumer spending and supply chain issues, raw material disruptions, cyberattacks, canals getting blocked and backing up freight, and you name it, already put our just-in-time manufacturing and delivery systems in complete disarray.  When these problems also hit the trucking industry hard, as we see now, recoveries are fragile, and further shortages become the current reality and possibly the future norm.  Every year the US economy depends on ten billion tons of every commodity imaginable to be delivered to the tune of almost 700 billion dollars worth of goods. If the trucks stop running, filling stations that sell nearly 300,000 gallons per month and require multiple deliveries per day could run out of fuel in hours or days.  Manufacturers, unable to deliver their products from plastic bottles to toys to tomatoes, would have to halt production and sit idly by.  You would see shortages of just about everything in your stores within two days.  That would spark panic buying and further complicate the problems.  Within a week, the entire economy would grind to a halt if all trucks stopped running.

Are we barreling down the road towards a trucking collapse?  A complete truck collapse isn’t necessary for it to get so bad that every consumer feels the impact in all aspects of their lives.  Several significant problems are facing this critical piece of the supply chain.  If it fails, the whole system will collapse…

…click on the above link to read the rest of the article…

What if there were no truck drivers?

What if there were no truck drivers?

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BP Prepares To Ration Gas At UK Service Stations Amid Supply Woes

BP Prepares To Ration Gas At UK Service Stations Amid Supply Woes

Compounding the ongoing UK energy crisis is BP plc, a multinational oil and gas company, which said it plans to restrict deliveries of gasoline and diesel across its network of service stations in the country amid a truck driver shortage, according to ITV.

ITV, citing a BP spokesperson, said a shortage of truck drivers is inhibiting the oil company’s ability to transport fuel from refineries to its network of service stations.

According to ITV, the disruption is expected to cause BP to announce fuel “restrictions” at service stations “very soon.” 

The spokesperson said a “handful” of service stations have already closed due to the lack of unleaded gasoline and diesel.

Last Thursday, BP’s Head of UK Retail, Hanna Hofer, spoke with the Cabinet Office about the diminishing supplies and said BP had two-thirds of fuel stock levels required for normal operations. She expects fuel stocks to stabilize and began rebuilding in October, but there could be a few weeks of disruptions at the pump.

The spokesperson added:

“These have been caused by delays in the supply chain, which has been impacted by industry-wide driver shortages across the UK and we are working hard to address this issue.”

A lack of truck drivers is due to several factors, including Brexit and the virus pandemic. Since Brexit, there are estimates that several thousand truck drivers from the EU are thought to have been lost.

This is more bad news for Brits, who are already experiencing hyperinflating natural gas and electricity prices, along with other disruptions caused by the energy crisis.

Truckers Prepare For MASSIVE Strike To Protest Biden

It’s called “Stop the Tires,” and it’s not the first time American truckers have chosen to stand up against Joe Biden.

As news spreads about the fishy manner in which the pop media prematurely called Joe Biden “President Elect”, thousands of independent truckers, their loved-ones, and their friends, are ready to take action.

From November 26th through the 29th, they will park their trucks, and deliveries will stop – a dramatic way to show their precarious position in a field that had been mauled by Biden and Obama prior to Donald Trump offering some relief, and which sees dark times ahead, based on Biden’s announced plans.

The official Facebook page for the protest is exploding, growing to over 51,000 members in just over 36 hours, and TikTok is seeing thousands viewing the expanding number of testimonials from indie truckers explaining why they are standing up against Biden, his previous legislative malfeasance, and his plans.

As posted on the page (which can be read here if one does not want to join the Facebook group), the official Stop the Tires announcement of intent says, in part:

We will not participate in the leftist, Biden/Harris Green New Deal. We do not support the banning of fracking. The United States of America operates as a capitalistic economy and OIL is the fuel she survives on.

They plan on initiating action today, Veterans Day, and really flexing their might starting on November 26, holding solid through the 29th.

We will STOP ALL TIRES for 24 hours on Veterans Day 11/11/20. If this is not effective and our leaders do not respect that blue-collar truck drivers are having to face domestic terrorism, primarily in democrat run cities all over the United States, and that we do not support the banning of fracking in any way, then we will have our second STOP OF TIRES for FOUR full days 11/26/20-11/29/20.

…click on the above link to read the rest of the article…

Major Freight Carrier Bankrupted, Leaving 3,000 Truckers Jobless, Many Stranded On Highways

Major Freight Carrier Bankrupted, Leaving 3,000 Truckers Jobless, Many Stranded On Highways

As the manufacturing recession gains momentum, the largest U.S. truckload carrier filed for bankruptcy Monday morning, leaving 3,000 truck drivers and 500 administrative positions without a job two weeks before Christmas. 

Indianapolis-based Celadon filed for voluntary Chapter 11 bankruptcy in the early hours on Monday morning.

Around 1:43 am est., headlines via Reuters confirmed the bankruptcy and how all domestic and international operations have been halted.

  • CELADON GROUP, INC. AND AFFILIATES COMMENCE VOLUNTARY CHAPTER 11 CASES
  • CELADON GROUP INC – CELADON ALSO ANNOUNCED THAT IT WILL SHUT DOWN ALL OF ITS BUSINESS OPERATIONS EFFECTIVE AS OF TODAY, MONDAY, DECEMBER 9, 2019
  • CELADON GROUP INC – THIS SHUT DOWN DOES NOT INCLUDE TAYLOR EXPRESS BUSINESS HEADQUARTERED IN HOPE MILLS, NORTH CAROLINA
  • CELADON GROUP – CELADON INTENDS TO USE ITS CHAPTER 11 PROCEEDINGS TO WIND DOWN ITS GLOBAL OPERATIONS
  • CELADON GROUP INC – HAVE FILED VOLUNTARY PETITIONS FOR RELIEF UNDER CHAPTER 11 OF BANKRUPTCY CODE IN U.S. BANKRUPTCY COURT FOR DISTRICT OF DELAWARE
  • CELADON GROUP INC – TO SUPPORT WIND DOWN OF OPERATIONS, CELADON’S LENDERS HAVE AGREED TO PROVIDE INCREMENTAL DEBTOR-IN-POSSESSION FINANCING

Celadon CEO Paul Svindland told WTHR Indianapolis that the entire company would shut down business operations except for the “Taylor Express” subsidiary in Hope Mills, North Carolina, on Monday. 

Svindland said the company will guarantee delivery of their last loads and will instruct drivers where to leave trucks. 

“We have diligently explored all possible options to restructure Celadon and keep business operations ongoing, however, a number of legacy and market headwinds made this impossible to achieve,” Svindland said in a press release.

“Celadon has faced significant costs associated with a multi-year investigation into the actions of former management, including the restatement of financial statements…

…click on the above link to read the rest of the article…

THE TRUCKING “BLOODBATH” CONTINUES AS 4,500 TRUCKERS LOSE THEIR JOBS

THE TRUCKING “BLOODBATH” CONTINUES AS 4,500 TRUCKERS LOSE THEIR JOBS

The federal government’s jobs report has confirmed that truckers are losing their jobs by the thousands. According to preliminary payroll numbers reported by the Bureau of Labor Statistics last week, around 4,500 trucking jobs were eliminated in the month of August alone.

The worst part is that we can expect that number to get worse in the coming months. According to Business Insider, this is the first time the agency reported a slash in trucking payrolls since March, when 1,200 truckers lost their jobs. That’s also the biggest drop since April of 2018 when approximately 5,500 trucking jobs were lost.

Indicators from the trucking industry have been sour in 2019. In the first half of the year, around 640 trucking companies went bankrupt, according to industry data from Broughton Capital LLC. That’s more than triple the number of bankruptcies from the same period last year — about 175. –Business Insider

One trucking company’s profits plunged recently adding more fuel to the recession fires.  USA Truck reported $2.5 million in net income in the second quarter of 2018. In Q2 2019, it reported $1,000 in profit, according to a separate report from Business Insider. The trucking industry is indeed going through a “bloodbath.”


Not a number you see very much in quarterly earnings: USA Truck’s 2q profit fell to … $1,000.

https://www.arkansasonline.com/news/2019/jul/26/freight-carrier-s-net-falls-to-1-000-20/#.XT2j3bcyRE8.twitter …Arkansas-based freight carrier’s profit plummets to $1,000 from $2.5 millionUSA Truck Inc. on Thursday reported a second-quarter profit of $1,000, a fraction of the trucking company’s reported profit from a year ago. arkansasonline.com


Of course, the news gets even bleaker the further you look. New truck orders sank to a nine-year low in July, according to ACT Research. But that number rebounded slightly in August, with a 6% month-over-month bump.

 …click on the above link to read the rest of the article…

They Are Calling This A “Bloodbath” For The $800 Billion Trucking Industry As U.S. Economic Activity Dramatically Declines

They Are Calling This A “Bloodbath” For The $800 Billion Trucking Industry As U.S. Economic Activity Dramatically Declines

The U.S. trucking industry has not experienced a downturn of this magnitude since the last financial crisis, and this is one of the clearest signs yet that the U.S. economy is steamrolling into a severe economic downturn.  When economic activity is increasing, the trucking industry sees rising demand for their services and freight rates tend to go up.  That is precisely what we witnessed in 2018, and truckers were hoping for more of the same in 2019.  But when economic activity is on the decline, the trucking industry sees decreasing demand for their services and freight rates tend to go down.  Unfortunately, the numbers that the U.S. trucking industry is reporting right now are absolutely abysmal.  Freight rates have now fallen for six months in a row on a year-over-year basis, and according to Business Insider during the month of May loads on the spot market fell “by a chilling 62.6%” compared to last year…

This year has been rocky for the $800 billion trucking industry.

After a raucous 2018, 2019 has seen retailers and manufacturers moving less, according to the Cass Freight Index. Freight rates have dipped year-over-year for six months straight. Loads on the spot market, in which retailers and manufacturers buy trucking capacity as they need it rather than through a contract, have fallen by a chilling 62.6% in May year-over-year.

The spot market is where we see the marginal changes in demand most clearly, and what this is telling us is that we are already in a transportation recession.

Of course that is almost certainly putting it too nicely.  According to one owner-operator, what we are witnessing right now is nothing short of a “bloodbath”

If demand does not start rebounding really soon, we are going to see many more trucking companies go bankrupt.

What Collapsing Orders for Heavy Trucks – Down 71% from a Year Ago – Say about the U-Turn in Trucking

What Collapsing Orders for Heavy Trucks – Down 71% from a Year Ago – Say about the U-Turn in Trucking

“When times are tough, the thinking switches to the short-term. Many fleets are just fighting for survival.”

Orders for Class-8 trucks – the heavy trucks that haul a large part of the goods-based economy across the US – plunged by 71% in May compared to May last year, to — as FTR Transportation Intelligence called it this afternoon — a “chilly 10,400” orders. It was “the lowest volume for Class 8 orders since July 2016 and the weakest month of May since 2009,” FTR said in the statement (data via FTR):

This comes after orders had already plunged year-over-year by 52% in April, 67% in March, 58% in February and January, and 43% in December. It was the seventh month in a row of year-over-year declines (data via FTR):

The cyclical nature of the industry is legendary. Trucking companies get exuberant when capacity tightens and freight rates soar – which they did in late 2017, that in 2018 turned into an outright capacity shortage and a driver shortage.

This boom was fueled in part by a decision in Corporate America to build up inventories in the US to front-run potential import tariffs. This put additional pressure on trucking capacity, and on freight rates. And it motivated trucking companies to order new equipment to meet demand. Given the capacity pressure at the time, they tried to get the orders in ahead of the others, and this created a phenomenal boom in orders — and at truck manufacturers, historic order backlogs.

Then the other part of the cycle begins. As these new trucks enter service, capacity rises, taking pressure of the system. This was expected.

 …click on the above link to read the rest of the article…

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