Luis Escalante spent a year sorting past-due bills at his kitchen table as he tried to keep his small Southern California trucking company afloat. Costly truck repairs and growing competition had already put pressure on the business. A steep rise in Diesel prices then left him unable to continue paying the high-interest loans that had helped keep it running.
Diesel prices in California climbed past $5 a gallon and then $6 and $7 after the War in Iran began, according to the account. Escalante, 47, said the additional fuel costs amounted to thousands of dollars a month. He ultimately filed for bankruptcy, describing it as a last resort: “I had to be honest with myself. There was no way to keep going.”
Truckers and farmers have been especially exposed to higher diesel costs because of their reliance on fuel for vehicles and machinery. Truckers are paying around 70 percent more per gallon than they were a year earlier, the report said. BKwire, a bankruptcy data analytics firm, recorded at least 40 trucking-company bankruptcy filings nationwide in September, including Escalante’s—up 38 percent from the same month a year before.
Logistics experts and bankruptcy lawyers say record-high diesel prices have contributed to business failures, particularly among small operators. Florida bankruptcy lawyer David Cruz said that when fuel costs rise from below $4 to above $6 per gallon but freight rates do not keep pace, the added expense comes out of the owner’s pocket. Cruz also said more trucking companies had contacted his office since the war began.
Sources: The New York Times Business.