Truckers Caught in the Crossfire of Washington's Diesel Debate

Diesel hit an all-time high of $6.53 a gallon last Tuesday. That is 77 percent higher than a year ago, and nearly a dollar more than a month earlier.

The White House is now weighing one of the most drastic options available: a ban on diesel exports. Speaking to Fox News at the Presidents Cup near Chicago on Sunday, President Trump said he was looking at it "very seriously." "We may do it," he said.

Mixed signals

That was a change from last week. On Wednesday, Energy Secretary Chris Wright said nobody was considering a flat ban on shipments, and floated voluntary export curbs instead. The shift has left the freight sector unsure what comes next.

Critics warn that a ban could backfire. American refineries produce around 5.3 million barrels of distillate fuel a day, against domestic demand of 3.6 million. Forcing refiners to cut output could push up gasoline and jet fuel prices, and leave parts of the Northeast, which relies on imported diesel, paying more. More than 30 business groups, including the U.S. Chamber of Commerce and the American Fuel & Petrochemical Manufacturers, urged the President in a letter last week to reject the idea. Oil industry voices want Congress to suspend the federal diesel excise tax instead.

Pressure at the pump

For the people behind the wheel, the debate is not academic. The Owner-Operator Independent Drivers Association says fuel is one of the biggest costs for its members, and small carriers cannot simply raise rates when prices spike.

That squeeze has fueled online talk of a nationwide trucker strike on October 1. The association says the chatter appears limited to social media, and there is no sign of an organized walkout.

Relief will depend less on Washington than on the Strait of Hormuz, where disrupted global supply continues to set the price.

America's Ports Refuse to Slow Down

Peak season has run far longer than expected, and shippers are paying close to record rates to move goods.

The shipping peak season was supposed to be winding down by now. It isn't.

The National Retail Federation now expects September to be the busiest month of the year for U.S. container imports, at 2.31 million twenty-foot equivalent units. That would be 9.6 percent higher than a year ago. The federation has raised its full-year forecast to 25.7 million units.

"We thought the peak season would be mostly behind us by now, but that's not the case," said Jonathan Gold, the federation's vice president for supply chain and customs policy.

A costly crossing

Strong demand has come at a price. Spot rates from Asia to the U.S. East Coast reached $11,259 per forty-foot container on September 17, just over 11 percent below the 2022 record. East Coast space has been especially tight, with Panama Canal draft restrictions limiting service options.

Reliability has not kept pace either. Global schedule reliability fell to 29 percent in August, a three-month low, after typhoons left vessels stranded off Chinese ports. Carriers are also cancelling sailings around China's Golden Week holiday, which adds to the backlog.

Eyes on the Gulf

Fuel is another pressure. Marine fuel prices remain high, and the wider energy market is still shaped by the disruption in the Strait of Hormuz.

Last week brought a possible way out. At the United Nations General Assembly, Iran's Foreign Minister, Abbas Araghchi, offered to reopen the strait within seven days if Washington lifts its naval blockade and sanctions. Secretary of State Marco Rubio cautioned against calling it a breakthrough, and analysts remain doubtful a deal will come together.

For now, importers are racing to get holiday stock ashore before Thanksgiving. Most expect volumes to ease in October. Whether costs ease with them is another question.