Posted Originally on: Oct 9, 2026 by Martin Armstrong |

At least 16 trucking, delivery, and transportation companies entered bankruptcy proceedings between late August and September 21. These filings extend across general freight, construction materials, agricultural hauling, and even an Amazon delivery contractor. Some are seeking Chapter 11 protection to reorganize; others have entered Chapter 7 liquidation. We should not pretend every filing means a company has closed, but we should certainly ask why businesses moving the goods this economy depends upon are struggling to remain solvent.

Globemaster reported between $500,000 and $1 million in assets against liabilities ranging from $1 million to $10 million. Pacer Transport listed less than $50,000 in assets against $1 million to $10 million in liabilities. FreightWaves also points to rising diesel prices and elevated operating costs. A trucker cannot pay for fuel with a politician’s speech about how well the economy is doing.

I keep coming back to the distinction between spending and prosperity. A household spending more money to obtain the same necessities has not become wealthier. Neither has a business whose revenue rises while its expenses rise faster. You can move more dollars through an economy while leaving the people doing the work with less. That is why aggregate figures can look respectable while the operator sitting at his kitchen table discovers there is nothing left after paying everybody else.

If customers resist higher freight charges, the carrier absorbs the pressure until there is no margin left. Borrowing may buy time, but another loan does not repair an operation that cannot consistently earn enough to meet its obligations. Eventually, the creditor wants cash.

Energy costs are part of this squeeze. Fuel must be paid for immediately, while payment for hauling a load may come later. A carrier can collect a fuel surcharge and still face a cash shortage before that money arrives. Add truck payments, insurance, maintenance, and wages, and there is very little room for error. If freight revenue cannot keep pace with those bills, running the truck may produce activity without producing a profit. That is how a business can remain busy right up to the day it goes bankrupt.

When smaller operators disappear, surviving businesses may acquire their equipment and customers. That can help restore balance in an overcrowded market, but the adjustment comes through lost businesses, damaged credit, and interrupted livelihoods. The man who spent years building a fleet does not experience this as an encouraging economic correction. He experiences it as the destruction of everything he worked for.

These bankruptcies alone do not prove the entire country is in recession. They do show why I would pay attention to the businesses carrying the goods rather than accept every reassuring national average at face value. An economy needs people willing to take risks and enough profit to justify taking them. Keep squeezing that profit and eventually the trucks, the jobs, and the tax revenue go with it. Washington can roll over its debts and congratulate itself on another spending package. The private businessman has to make payroll on Friday.

Categories:USA Current Events

Posted Originally on: Oct 9, 2026 by Martin Armstrong |

Ryanair chief Michael O’Leary says jet fuel is now about 50% more expensive than before the Iran war and expects those elevated costs to persist for another 12 to 18 months. Reuters reports that he has previously warned ticket prices could rise by as much as 20% next summer. These are forecasts, but the pressure on airline margins is already here. “We are all facing an enormous cost challenge next year,” O’Leary said.

People assume that once the fighting stops, everything returns to normal. A ceasefire does not repair a refinery or restore damaged infrastructure overnight. Nor does a retreat in crude oil automatically produce an equivalent decline in the price of usable aviation fuel. Airlines need the finished product, delivered where their aircraft operate. You cannot fly a plane on a press release announcing that the oil market has stabilized.

Fuel hedging can buy an airline time, but it cannot permanently insulate the business from higher costs. As those contracts expire, management must decide how much it can pass to passengers and which routes remain worth operating. Raise fares too far and customers reconsider the trip. Absorb the increase and profitability suffers. Cheap tickets depend upon the economics of providing them, however much politicians would like to pretend otherwise.

Lufthansa is facing the same squeeze. CEO Carsten Spohr expects this year’s additional fuel costs to exceed the €1.5 billion previously projected, despite extensive hedging. The airline maintained its operating profit forecast, but rising costs are weighing on its turnaround plans. You can have passengers willing to fly and still struggle to improve profitability when the cost of carrying them keeps climbing. Hedging buys time; it does not manufacture fuel or permanently remove the expense. Those who believe an airline can simply absorb every increase should try running one.

EasyJet is already responding by cutting flights. The Financial Times reports that the airline will remove another 600,000 to 700,000 seats from its winter schedule, following an earlier reduction of about 700,000, to limit spending on expensive fuel. Routes that made sense at one fuel price become less attractive at another, and management pulls back. Fewer seats mean fewer opportunities to travel, with potential consequences for the hotels, restaurants, and businesses waiting for those visitors. Governments authorize military operations, and a holiday business hundreds of miles away discovers that its customers have fewer flights available to reach it. The consequences reach well beyond the airline. That is how an energy shock works its way through an economy, taking income from one business after another.

I have little patience for governments that discuss war as though its economic consequences can be contained within the country being attacked. Energy moves across borders, and so does the damage when its supply is disrupted. The public pays through fuel bills, freight charges, food prices, and now the cost of visiting family or taking a holiday. Officials can authorize another operation with a signature. The businesses trying to remain profitable must work out how to pay for the consequences.

Categories:Energy