The trucking industry faces rising costs, intense competition, and consumers wary of spending more money.
“Trucking companies operate in a challenging financial environment, where even minor shifts in market conditions can result in major impacts on cash flow and solvency. Rising insurance premiums, fluctuating fuel prices, maintenance costs, and driver shortages all create significant pressure on profit margins,” bankruptcy attorneys Ford & Semach shared on their website.
The law firm pointed out two key areas, which have driven more trucking and freight companies to make Chapter 11 bankruptcy filings.
- One of the primary financial challenges that trucking companies face is the cost of insurance. Liability coverage for commercial trucking has increased sharply in recent years, with nuclear verdicts and high settlement demands pushing premiums higher each renewal period.
- Fuel price volatility is another risk factor that makes budgeting and planning difficult. When fuel prices rise suddenly, companies with fixed contract rates may find their operating costs exceeding revenue, creating a cycle of debt that is hard to break without strategic restructuring.
“Filing for Chapter 11 bankruptcy offers trucking companies an opportunity to reorganize their debts while continuing operations. Unlike Chapter 7 liquidation, Chapter 11 allows companies to negotiate with creditors, restructure secured and unsecured debts, reject burdensome leases and develop a feasible repayment plan under court supervision,” according to the attorneys.
A dozen trucking companies filed for bankruptcy in April, with some opting for Chapter 11 and others choosing a Chapter 7 bankruptcy liquidation.
April has been a challenging month for trucking and freight companies.
The largest company in the latest batch of filings is Bound Logistics LLC, a New Jersey-based carrier operating 57 trucks with 57 drivers, according to federal safety data. The company filed for Chapter 11 protection in the District of New Jersey on 23, court records found on PacerMonitor show.
“Also among the largest fleets in the group is Stron Logistics Inc., an Illinois-based carrier with 9 trucks and roughly 10 drivers. The company filed for Chapter 7 liquidation in the Northern District of Illinois on April 15,” FreightWaves reported.
The industry publication also shared 10 other Chapter 11 and Chapter 7 bankruptcy filings:
- Allbound Carrier Inc. (Bolingbrook, Illinois) filed for Chapter 11 protection.
- Allstar Trailer Sales LLC (Stone Mountain, Georgia), a small carrier/dealer with two trucks and two drivers, filed for Chapter 7.
- D.A.R. Carrier Inc. (Oak Lawn, Illinois) filed for Chapter 11 as a small business debtor.
- Freight Sherpas Inc. (Chicago) filed for Chapter 11 under Subchapter V.
- Honey Bee Freight Group LLC (Norcross, Georgia) filed for Chapter 7 protection.
- K&L Trucking LLC (Temple Hills, Maryland) filed for Chapter 7 liquidation.
- MLG Freight LLC (Niles, Illinois) filed for Chapter 7.
- Rivera On-Point Logistics LLC (Chicago) filed for Chapter 7.
- Timex Freight Inc. (Waukegan, Illinois) filed for Chapter 7.
- ZD Sand LLC (Voca, Texas), a trucking-related operation, filed for Chapter 11 in the Southern District of Texas.
Source: Freightwaves
“Twelve bankruptcies in three weeks isn’t an outlier; it’s a collapse. With diesel prices surging due to the Iran conflict, the math for mid-sized carriers simply fails. This creates a brutal domino effect: as supply chain costs spike, the price of every single good on those trucks follows,” TheStreet retail advisor and RTMNexus CEO Dominick Miserandino shared.
Trucking demand has dropped
Long-haul truckload demand plummeted by 25% in the first half of 2025, with trucking becoming more of a short-haul delivery method for the final leg of freight movement, according to the Long Outbound Tender Volume Index, FreightWaves reported.
That has continued into the new year, according to data from the American Trucking Association (ATA).
The ATA’s advanced seasonally adjusted For-Hire Truck Tonnage Index declined 2% in March after increasing 4% in February.
“Tonnage in March suggests that truck freight volumes remain lackluster, and it is clear the truck freight recession continued through the first quarter,” said ATA Chief Economist Bob Costello.
The trade association sees that as a reflection of the broader financial state of the nation.
“Trucking serves as a barometer of the U.S. economy, representing 72.6% of tonnage carried by all modes of domestic freight transportation, including manufactured and retail goods. Trucks hauled 11.46 billion tons of freight in 2022. Motor carriers collected $940.8 billion, or 80.7% of total revenue earned by all transport modes,” according to the ATA.
ATA calculates the tonnage index based on surveys from its membership and has been doing so since the 1970s.
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Higher gas prices create a trucking problem
While gasoline prices have shown signs of easing, diesel fuel costs remain elevated, creating ongoing financial strain for Washington’s trucking industry and the broader supply chain, according to Washington Trucking Association (WTA) CEO Sheri Call.
Diesel, she noted in a press release, is the primary fuel that powers the nation’s freight system, and its persistent volatility disproportionately impacts trucking companies.
Fuel is the industry’s second-largest expense after labor, and recent price spikes place significant pressure on carriers of all sizes.
“Diesel prices are not following the same downward trend as gasoline, and that disconnect matters,” Call said. “Trucking runs on diesel, and when those costs stay high, it impacts everything — from the cost of goods to the stability of small businesses across our state.”
For drivers and trucking companies, higher fuel prices can be the difference between making and losing money.
“Fuel is your single largest variable expense, often eating 30% to 40% of gross revenue. When diesel climbs even $0.50 per gallon, it doesn’t just sting — it can flip a profitable month into a losing one,” Bobtail shared in a report, How Diesel Prices Impact Trucking Profits, posted on its website.
Fuel surcharges may not be the answer.
In my days working at my family’s scaffolding business, we used fuel surcharges passed to our customers when diesel topped $4 per gallon.
That worked for us because we had a longtime customer base that understood the high cost of delivering steel scaffolding by the truckload.
Steven Mazur, owner of the men’s clothing brand Ash & Erie, told The Wall Street Journal that fuel surcharges impact his business.
“These fuel surcharges really feel like tariffs 2.0,” said Mazur, referring to the fees parcel carriers charge to offset transportation costs. “It feels like one of those things that, again, you can’t plan for but is very important and makes a big impact on the business and the bottom line.”
On-highway diesel fuel prices climbed to $5.401 as of March 30, up 39% from the beginning of March and 50% higher than a year earlier, according to the U.S. Energy Information Administration.
That’s likely to force more shippers to add fuel surcharges and a number of big players already have, according to The Wall Street Journal.
- FedEx and United Parcel Service are adjusting their fuel surcharges weekly based on diesel prices.
- As of March 30 for domestic ground shipments, FedEx is charging an additional 26.5% of the shipping cost and UPS is charging 27%.
- Amazon.com began applying a 3.5% surcharge to fulfillment fees beginning April 17 to help offset increased fuel and logistics costs.
